Fort Lauderdale, FL: (May-24-07) Florida policyholders filed a class action lawsuit against State Farm Insurance Co. alleging that the insurer unfairly depreciated claims for screen enclosures damaged in Hurricanes Katrina and Wilma. State Farm officials claimed that the misunderstanding resulted from a printing error in policies issued in five Florida counties.
In a settlement reached, State Farm agreed to pay almost $6.8 million to settle the class action lawsuit. State Farm paid actual cash value instead of the full replacement value to about 12,000 customers whose screen enclosures were damaged by the 2005 storms. That meant full replacement cost to policyholders who got the misprinted policy. As part of the agreement, the company has also issued new policies in the five affected Florida counties that clearly state future claims will only cover the cash value of screened enclosures. [