State Farm Mutual Automobile Insurance Co. has reimbursed $5.2 million to Montana policyholders after completing reviews of 18,000 claims. This effort was part of a settlement reached with the Montana Commissioner of Securities and Insurance (CSI), which addressed unfair claims practices discovered during a two-year review.
The settlement, finalized in February 2024, followed an investigation by the state regulator that revealed instances where State Farm failed to conduct reasonable investigations or provide adequate explanations for claims denials. As a result, the company was fined $4 million, with the possibility of a $2 million reduction based on compliance.
Since then, State Farm has taken steps to update its policies and train staff, earning a $1 million deduction by August. A follow-up review in 2025 will determine if the remaining $1 million suspension is granted, depending on whether the company’s error rate falls below 8%.
“We remain committed to paying what we owe,” a State Farm spokesperson shared via email, emphasizing their cooperation with the Montana Commissioner of Securities and Insurance and their focus on addressing the issues identified in the report.
The claims review covered accidents that occurred between November 2018 and April 2022. In addition to the $5.2 million payout, State Farm has already disbursed $1.18 million on 2,436 previously reviewed claims.
Troy Downing, Montana’s Commissioner of Securities and Insurance, praised State Farm for its efforts to resolve the issues outlined in the February 2024 consent agreement. “The money is being returned to Montana consumers,” Downing said, commending the insurer’s collaboration with his office.
State Farm holds the largest market share in Montana’s private passenger auto insurance market, with 22.63%, followed by Progressive Insurance Group at 19.96%. The company also boasts an A++ (Superior) Best’s Financial Strength Rating.
Montana policyholders who believe their claims fall under the scope of this settlement are encouraged to contact the Montana Commissioner of Securities and Insurance or their local State Farm agent for more information.
