State Farm Mutual Automobile Insurance Company has agreed to pay a $2 million fine over unfair claims practices, according to Montana Commissioner of Securities and Insurance (CSI) Troy Downing.

In a release, it was noted that the US insurance giant will also be subject to an additional suspended fine – worth $2 million as well – that will be discharged upon State Farm satisfactorily implementing corrective actions.

The “historic settlement” comes as a result of a two-year examination of State Farm’s claims handling practices. The CSI had found that some drivers who were in accidents with State Farm’s insureds from November 1, 2018, to April 15, 2022, had been underpaid.

“We send a clear message that Montana will not tolerate unsupported fault being placed on victims of auto accidents,” said Commissioner Downing, who expressed his appreciation for the insurer’s cooperation. “I expect insurance companies to complete a full, fair, and transparent examination of the facts and law and to pay what is owed as required by law.”

State Farm was ordered to re-evaluate all affected claims between November 1, 2018, through the end date of the examination. According to State Farm, it has already reviewed over 2,436 Montana claims and made an additional $1,182,927.43 in payments.

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