A Travis County, Texas district court has granted preliminary approval of a settlement with Farmers Insurance Group that will return $84.4 million to policyholders stemming from a 2002 homeowners insurance rate case.
The case stems from a 2002 lawsuit by the state against Farmers.
The settlement will enhance benefits to Farmers policyholders who fall within the settlement class. As part of the settlement in 2002, Farmers provided a 6.8 percent homeowners rate reduction that has already been received by its policyholders. An additional $74.38 million in refunds has been increased by $10 million to account for the passage of time.
Under the terms of the agreement, eligible Farmers policyholders will receive a total of $84.38 million in refunds.
“I’m pleased with the court’s decision,” Texas Insurance Commissioner David Mattax said in a statement. “It’s time to return this money to policyholders, who have been waiting for more than a decade. These refunds, combined with the rate reductions Farmers agreed to in 2002, are excellent news for consumers.”
Mattax noted that the court’s original approval of the settlement in 2003 described the agreement as “an extraordinarily high percentage of recovery on the claims that were asserted.” The amended version adds an additional $10 million for consumers to account for the delays while the settlement was challenged in court.
Notices about the settlement will be mailed within 60 days to people who may be eligible for a refund.
Mattax also thanked the Texas Attorney General’s Office for its work representing the state in the long, complex case.