OKLAHOMA CITY – Attorney General Mike Hunter and Insurance Commissioner Glen Mulready today announced a $25 million settlement with Farmers Insurance for the company’s handling of earthquake claims.
An investigation revealed that Farmers denied or failed to properly pay approximately one thousand earthquake claims submitted by Oklahomans who purchased coverage to protect their property. As a result, the company will reopen the claims process and re-evaluate the claims using an independent administrator. Claims approved by the independent administrator will be paid pursuant to an individual insured’s policy.
“This is a great win for Oklahomans who paid premiums for a Farmers earthquake insurance policy,” Attorney General Mike Hunter said. “I am happy to announce that after negotiations, Farmers agreed to this settlement. Through an exhaustive process, we will ensure each Oklahoman who sustained legitimate damage from an earthquake and submitted a claim to Farmers will have an opportunity for their claim to be independently reviewed and the damage to their property repaired.”
According to the agreement, Farmers will make additional payments as needed if property damages exceed the agreed upon amount to pay eligible earthquake claims.
“This latest settlement serves as another example that the attorney general and I are committed to protecting all Oklahoma consumers,” said Oklahoma Insurance Commissioner Glen Mulready. “We appreciate the partnership of the attorney general in resolving this matter.”
Terms of Agreement and Payout
An earthquake claims review process will be formed to re-examine every eligible earthquake claim.
Farmers will send each eligible Oklahoman a written notice that their claim has been re-opened for review and describe the earthquake claims review process.
If an eligible individual has more than one eligible earthquake claim, all eligible earthquake claims will be re-examined.
The state and Farmers will mutually agree upon an independent, third-party claim administrator with substantial experience in the handling, or reviewing, of property damage claims in Oklahoma. Farmers shall have no prior or existing relationship with the claim administrator.
Documents will be available later.