State Farm has to repay millions

State Farm has to repay millions

TALLAHASSEE, FL - State Farm Florida will have to give $120 million back in refunds to current and former policyholders. The company failed to comply with a law enacted in 2005 that requires insurance companies to tell customers about discounts for making their homes more resistant to wind damage when policies are issued and renewed.

State Insurance Commissioner Kevin McCarty on Tuesday ordered the company to issue credits or refunds averaging $1,225 and pay a $1 million penalty.

The order affects about 98,000 current and former customers who had homeowners, renters, condominium unit owners, and apartment or condominium association policies in 2005 or 2006 with the subsidiary of Bloomington, Illinois-based State Farm Insurance Co.

The State Farm Insurance Company actually discovered the problem themselves and reported it to regulators. They also agreed to the refunds and credits.