A class action lawsuit was filed against State Farm General Insurance Company, alleging that the company failed to pay unearned premiums when an insured personal article was deemed a total loss and its replacement value was less than the amount the item was insured. The lawsuit indicates that the country’s largest home and auto insurer routinely engaged in this conduct with its clients.
The national class action law firm Levin Law, P.A., provides representation for insurance customers who were not reimbursed for unearned premiums in compliance with their personal article policies. Individuals whose personal items were deemed a total loss and who were not paid unearned premiums are strongly encouraged to contact Levin Law founder and managing partner Brian Levin at (305) 402-9050 or via email at contact@levinlawpa.com for a free case evaluation.
Class Action Lawsuit Filed Against State Farm
A class action lawsuit was filed in the Southern District of Florida against State Farm General Insurance Company, State Farm Fire & Casualty Company, and State Farm Florida Insurance Company, alleging that the insurers failed to refund customers' unearned premiums pursuant to their personal article policy (PAP).
According to the complaint, the insurers’ PAP stated that a person was entitled to the replacement value of a personal article that was deemed a total loss. If the replacement value was less than the amount that the article was insured for, the policy entitled the customer to a refund of the unearned premium.
The unearned premium is the difference between the premium paid throughout the “life of the policy” and the premium that would have been paid based on the replacement value. Premiums for personal articles are generally based on the appraised value of the item.
Allegations Against State Farm
It is alleged that State Farm’s failure to pay unearned premiums when a personal article is deemed a total loss with a lesser replacement value is a breach of contract. Additionally, the class action lawsuit states that the company was unjustly enriched when it retained the unearned premiums.
Pearce v. State Farm General Insurance Company et al.
The present case, Pearce v. State Farm General Insurance Company et al., was filed on October 13, 2022. The plaintiff, Keith Pearce, purchased a Personal Article Policy through State Farm to insure a diamond pendant. An appraisal, required by the insurer, placed the value of the pendant at $34,496.00.
Mr. Pearce filed a claim for total loss under the PAP after the pendant was stolen. Pursuant to the PAP, Pearce was paid the “replacement value” of the pendant. State Farm placed the replacement value of the pendant at $12,741.66. According to the “Loss Clause” of the PAP, State Farm was to refund the unearned premium of the item. The unearned premium was never paid to Mr. Pearce or any of the class members, as stated in the lawsuit.
It is alleged that State Farm, despite being required to return the unearned premium collected over the life of the policy, routinely failed to do so. It became a “uniform practice and policy” not to refund unearned premiums in total loss claims under PAPs.
Insurance Companies and Unlawful Conduct
It is believed that the practice of not paying unearned premiums in total loss claims for personal articles not only occurred with State Farm but also with other insurance providers across the country. Insurance customers who were not refunded unearned premiums despite it being outlined in their Personal Article Policies are strongly encouraged to consult with an attorney.
If you were insured with State Farm and filed a total loss claim for a personal article but were not reimbursed for unearned premiums, you might be eligible to join a class action lawsuit. Other insurance companies that are engaged in the practice may also be subject to legal action.
An attorney can help determine the best course of action depending on the circumstances of your claim. It is essential to act quickly as you may only have a limited amount of time to file a claim for damages or to join a class action. Discussing your case with an attorney can help ensure that you receive the best possible resolution to your claim. If you were not paid unearned premiums, you are encouraged to contact Levin Law for a no-cost consultation.
Contact Levin Law for a Free Case Evaluation
Aggrieved customers can contact Levin Law, P.A. to schedule a free case evaluation. Managing partner and Levin Law founder Brian Levin can be reached directly at (305) 402-9050 or via email at contact@levinlawpa.com. All consultations are provided without obligation to retain Levin Law services.
Most cases are handled on a contingency fee basis, meaning that clients are not obligated to pay Levin Law attorney’s fees unless money is recovered on their behalf.
About Levin Law
Levin Law is a premier national cryptocurrency, securities, commodities, futures, and class action law firm. Brian Levin, Levin Law’s founding attorney, has helped recover in excess of $150,000,000 through arbitration and litigation for individual and institutional investors throughout the country and the rest of the world. Levin Law represents retirees, individual investors, high-net-worth investors, ultra-high-net-worth investors, institutions, family offices, trusts, publicly held companies, and others.
