State Farm faces possible class action over claims denial

State Farm faces possible class action over claims denial | Insurance Business America

Insurance News

State Farm faces possible class action over claims denial

If it pushes through, lawsuit to feature policyholders with water damage claims

Insurance News

By
Terry Gangcuangco

State Farm is said to be facing a possible class action over its denied water damage claims, according to a report by CBS 8.

The news station interviewed Attorney Erik Jenkins, who is in the early stages of taking State Farm to court via a class action. If it pushes through, the lawsuit will center on water damage claims that were turned down due to a relatively new policy wording that a public adjuster has suggested is riddled with ambiguity.

David Melzer, president and chief executive of Property Claims Consultant, told CBS 8: “In 2019, [State Farm] came out with an updated policy that’s very ambiguous.”

“Most other insurance policies actually specifically state a leak ongoing for 14 days or more is excluded, but State Farm’s policy has now just become ‘any ongoing leak’, whatever that is,” Melzer told the news station.

Jenkins added: “It’s a very vague phrase that’s in their policy, and they’re using that to just deny claims outright.”

When contacted by CBS 8, State Farm issued this response: “Due to our customer privacy policy, we can’t speak to the specifics of a claim.

“While we empathize with our customers when they experience a loss, it’s important to note that every claim is unique and not all losses are covered by insurance. Our commitment to paying what we owe has not changed.”

Meanwhile State Farm policyholders with unsuccessful water damage claims who are interested in joining the class action can reach out through [email protected].

What do you think about this story? Share your thoughts in the comments below.