20 Organizations Call on Attorneys General to Investigate Property Insurer Claims Handling Practices
WASHINGTON, D.C. — Public Citizen and 19 organizations today called on state attorneys general to investigate property insurers’ claims handling practices and other areas of potential misconduct. In a letter addressed to the attorneys general of all fifty states, the coalition encouraged their offices to reject attempts to strip consumers of their rights to hold insurers accountable in court and to protect policyholders from widespread misconduct when insurance department oversight proves insufficient.
Insurers have faced a wave of investigations by governments around the country this year:
- Oklahoma Attorney General Gentner Drummond filed sweeping lawsuits against Allstate Corporation and State Farm, alleging the companies orchestrated a racketeering scheme to systematically underpay policyholders for extreme weather damage.
- California regulators are actively investigating patterns of claim denials, underpayment, and bad-faith conduct, and seeking a fine against State Farm.
- Los Angeles County subsequently filed suit seeking full restitution for policyholders and civil fines.
- The Illinois Attorney General has sued State Farm for refusing to provide regulators with data it is legally required to hand over.
- The Florida House speaker launched an investigation into property insurance companies allegedly hiding billions of dollars in profits in affiliate companies, while claiming financial losses so they could argue for rate increases.
The letter comes days after senior-level insurance insiders issued a report exposing the industry’s widespread plans to extract short term profits and abandon communities before disasters strike.
“New evidence continues to surface that the insurance industry’s historic profits come on the back of exploiting the American public,” said Rick Morris, senior insurance campaigner at Public Citizen. “People in every state are being crushed by the industry’s greed. If attorneys general don’t vigorously protect consumers, property insurance could become little more than an open racket on their constituents.”
Read the full letter here.
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