The law firm of Caddell Reynolds recently helped secure a $21.7 Million judgment from State Farm Insurance regarding payment and recovery practices not allowed under Arkansas state law.
The insurance company agreed to settle claims with approximately 8,700 class members in an action related to insurance coverage for medical payments.
Court documents indicate State Farm would pay for medical bills related to car accidents and then—if the policyholder later settles with an at-fault driver—take back the money paid. While certain exceptions exist, Arkansas law does not allow for such practices, known as subrogation.
Bill Horton of Caddell Reynolds states: “We were able to demonstrate that State Farm was guilty of basically taking $22 million from their insured, and they fought us over it.” State Farm would send clients letters saying—according to policy—the company is allowed to claim the money.
According to Horton, State Farm customers did not realize that the company was not entitled to that money under the law. Horton said State Farm had recovered money from customers for decades when it should not have.
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