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State Farm Life Insurance Policy Overcharge Class Action Overview:
- Who: State Farm is being sued by a life insurance policy owner in New York
- Why: The plaintiff says State Farm concealed improper charges in its monthly life insurance costs deductions
- Where: New York federal court
State Farm charged life insurance policy owners more than it should have in its monthly fees and concealed the fact from consumers, a new class action lawsuit alleges.
Plaintiff Kim Botte filed the class action lawsuit against State Farm Life Insurance Company on May 16 in a New York federal court, alleging violations of contract and New York business laws.
Botte says, over the course of several years, State Farm has deducted an excessive amount of money from the money in her life insurance trust, in breach of her policy’s terms.
Botte says, on a monthly basis, State Farm makes a deduction from the account’s value.
The policy text explains that the monthly deduction consists of three components: the cost of insurance, the monthly charges for any riders, and the monthly expense charge, which is listed as $5.
The policy does not state that State Farm can include loads for expenses in the cost of insurance charge, and State Farm did not disclose to policyholders that it was including such expenses in the cost of insurance charge, Botte says.
“Defendant is contractually bound to deduct only those charges that are explicitly identified and authorized by the terms of its life insurance policies,” she states.
“Despite the unambiguous language of the policy, which is a fully integrated agreement, Defendant deducts charges from the Account Values of Plaintiff and the proposed class in excess of amounts specifically permitted by their policies.”
Plaintiff Seeks Damages for NY Customers
Botte says State Farm has improperly drained monies accumulated in their policy accounts.
“Every unauthorized dollar taken from policy owners is one less dollar on which policy owners earn interest and one less dollar that policy owners can use for their own benefit.”
She is looking to represent a Class of people who own or owned a State Farm universal life policy issued on Form 94030 in New York.
She’s seeking certification of the class action, damages, fees, costs, and a jury trial.
In 2021, State Farm was ordered to pay $4.5 million in prejudgment interest to policyholders who allege the insurer overcharged them on life insurance policies after the Eighth Circuit ruled in favor of the consumers for the second time.
What do you think of the allegations against State Farm in this case? Let us know in the comments!
The plaintiff is represented by Joshua D. Arisohn of Bursor & Fisher, P.A.
The State Farm Overcharge Life Insurance Class Action Lawsuit is Kim Botte v. State Farm Life Insurance Company, Case No. 2:22-cv-02842 in the U.S. District Court for the Eastern District of New York.
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6 thoughts onState Farm Overcharged Life Insurance Policy Owners, Class Action Alleges
Are there any other states contesting those fees? If Illinois makes a case would that include all customers since State Farm is based in Illinois? If you signed a Life insurance policy in Illinois, but since moved to another state…which state would you link yourself to a class action?
I believe I was overcharged by State Farm
State Farm also over charged me.
Add me
please add me
State Farm has been using my money for almost 50 years and charging various fees. Yet, today my insurance policy has very little value to it, plus they want me to pay more. Price gouging.