Farmers Insurance Hit With Class Action Over Skimpy Payouts

Law360, Dallas (February 5, 2013, 8:44 PM EST) -- A Texas man on Tuesday launched a $5 million putative class action against Farmers Insurance Group Inc. in federal court, alleging the insurer failed to properly reimburse policyholders who have private health insurance for medical expenses based on a flawed reading of state tort reform laws.

Theodore Morawski alleges Farmers and several of its Texas subsidiaries intentionally short car insurance policyholders by reimbursing them for medical expenses at rates lower than their policies provide, in a breach of contract and violation of state insurance laws. He...
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