Insurance Price Optimization Litigation

In 2015, M&S and co-counsel filed a class action complaint in California challenging Farmers Insurance Company’s practice of charging its most loyal policyholders more than was justified by the risk they present, based on their lack of price sensitivity. Named plaintiffs are three long-term Farmers policyholders. In August 2020, after multiple court proceedings, a proceeding before the California Insurance Department, and extensive negotiations, Judge Maren Nelson of the Los Angeles Superior Court finally approved a $15 million settlement which will compensate long-term Farmers policyholders who were overcharged.

To learn more about the lawsuit and the settlement, visit the settlement website.

M&S is also litigating two price optimization cases against Allstate, one in California and one in Illinois. The California case is currently proceeding in front of Chief Administrative Law Judge Kristin L. Rosi of the California Department of Insurance. The Illinois case is proceeding in the Circuit Court for the Third Judicial Circuit of Madison County, Illinois. In 2016, the Circuit Court denied Allstate’s motion to dismiss, and in 2019, the Illinois Appellate Court agreed with the Circuit Court’s determination that the filed rate doctrine does not apply to auto insurance in Illinois. A copy of the Illinois Appellate Court’s opinion can be found here.