Farmers Insurance

State Farm could owe $0 to $1 billion

(FORBES) - Pick a dollar amount be zero and 1 billion. Depending on who you ask, that’s what State Farm Insurance owes its Texas customers for overcharging on homeowner policies dating to 2003.

The Office of Public Insurance Counsel, the state’s consumer advocate for insurance, says in documents filed this month that Texas’ largest property insurer owes policyholders $785 million plus interest, or nearly $1 billion. State Farm has 1.2 million customers in Texas.

The Texas Department of Insurance calculates the overcharges at about $250 million, plus nearly $100 million more in interest.

State Farm says it owes customers nothing, that it didn’t overcharge its customers, and that its rates have always been fair and competitive. The dispute dates to 2003 when Texas ordered State Farm and other companies to reduced premiums the state considered excessive.

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