MSM Ee-vil Corporation Watch: ABC Declares State Farm 'Not a Good Neighbor'

NewsBusters ^ | Mark Finkelstein

[governsleastgovernsbest]

File this one under "MSM condemns ee-vil corporations." As you'll note from the screencap, ABC's Good Morning America today branded State Farm Insurance "not a good neighbor." What is State Farm's sin? Its decision not to write new homeowners and commercial policies in the state of Mississippi.

Did you note that? State Farm has decided not to write any new policies. This in no way affects the insurer's liability for existing policies. State Farm has made a simple business decision: given the legal environment there, Mississippi is not a good place for an insurer like it do to business.

As per this Forbes article:

"Mike Fernandez, vice president of public affairs for State Farm, said Mississippi's 'current legal and political environment is simply untenable. We're just not in a position to accept any additional risk in this homeowners' market.'"

That didn't stop Diane Sawyer from introducing a segment on the news by speaking of "outrage" over insurance companies and declaring that "some" call State Farm's decision "heartless and others call it plain greedy."

Chris Cuomo narrated the segment. Although a brief clip was played of State Farm spokesman Fernandez, most of the segment was taken up by the sympathetic story of one couple that had to wait a year-and-a-half to get its check, and clips of the Mississipi AG accusing State Farm of greed and a consumer advocate claiming State Farm is saying "if you make us pay what we owe we're going to take it out on your citizens."

Closing the segment, Cuomo stated "you know the saying 'like a good neighbor State Farm is there'?, well those Gulf Coast residents say when they need help the most, that good neighbor is moving out." From his body language and tone there was little doubt Cuomo was seconding the emotion. And again, ABC's screencap left no doubt. It didn't ask whether State Farm was being a good neighbor." It boldly proclaimed that it was not.Cuomo misleads when he says the company is leaving when people need help the most. Remember: State Farm's decision has nothing to do with existing policies or claims. It remains fully liable on all of those. It simply does not want to do any new business in Mississippi. If the legal climate in the state gives insurers a fair shake, then surely State Farm's depature creates a huge business opportunity for other companies, who will rush in to fill State Farm's vacuum. If they don't, it's fair to conclude that there is no level legal playing field for insurers. Rather than blaming the free enterprise system, ABC should examine the broken legal system in Mississippi, notoriously dominated by trial lawyer interests.

Back in the studio Diane declared a "call to arms" in which all of the regular GMA cast members will be "taking on the issue of the insurance industry, taking your case to them and getting answers."

ABC: not just in the news business anymore -- going to war against corporate America!

Contact Mark at mark@gunhill.net

[governsleastgovernsbest]

MSM ee-vil corporation watch ping to Today show list.

[billybudd]

Question: why does Mississippi need State Farm?

[street_lawyer]

Hood said it was State Farm and not Mississippi that had created the problem by refusing to pay claims and dragging out the process.

"If they paid what they owed in the first place, there never would have been a lawsuit filed," Hood said.

[AlexW]

If I am not mistaken, State Farm has for many years been considered a low life bottom feeder for insurance.

When I was last in rural west Tennessee, I knew not to even bother with a quote.
If I am mistaken, feel free to correct me.

[Squawk 8888]

So now they pick on what in my personal experience is the best insurer out there. About a dozen years ago a State Farm client ran over my parked bicycle, no mean feat as it propped against a brick wall at the time. Even though the insured was not co-operative (he tried to drive off but was stopped by a witness), I got my cheque to pay for the new bike less than 48 hours later.

They were my first choice when I bought my scooter, but unfortunately where I live they don't insure motorbikes :-((

[BipolarBob]

Question: why does Mississippi need State Farm?

Exactly!! These thinly disguised commies will MAKE the good citizens take out STATE- sponsored policies for their own good. If they don't take advantage of that the state will have to confiscate the property for the common good.

[AlexW]

I may also have them confused with AllState, or maybe they are both bad.

[3AngelaD]

Ten years ago State Farm totally screwed one of my friends, whose car was rear ended by another car traveling 50 miles an hour while my friend was stopped at a red light. She suffered from an enclosed head injury that took years to heal, as well as other broken bones. She still has problems. The driver of the other car was an uninsured immigrant. Despite the fact that she and her husband had had personal car coverage and coverage of his entire fleet of business vehicles from State Farm for more than 20 years, State Farm fought having to pay her medical bills, which were horrendous because of her injuries. She and her husband finally had to sue to get the company to pay for her medical care. They won, thank heavens, but what's the point in paying for insurance if the company makes you fight to collect on a straightforward claim?

[Squawk 8888]

I guess the company does things differently in the USA. Here in Canada they were terrific when I had a liability claim against one of their insured; I was paid off within two days of the incident.

[Scotswife]

State Farm treated us extremely well when I had an accident some years ago.
All hospital bills paid with no question - no problems.
They even considered the circumstances of the accident and "forgave" it by not raising our rates.

They sent an agent to our house to let us know about coverage we didn't know we had....something they could have just let slide.

[Mark was here]

Read the fine print, they only cover damage due to "mild sunshine".

[bamahead]

From what I understand, the basis on which State Farm is refusing to pay many claims, is that adjusters are declaring structures with *obvious* wind damage as flood losses - and not paying as a result.

It would be one thing if they were all really flood cases and the insured did not have flood coverage, but it sounds like there may be some funny business going on in an effort to mitigate some of their own (State Farm's) loss.

Granted, you always have to be wary of hyperactive lawyers. FWIW.

[Angelas]

I do not have experience with either company but the reason for denying claims was due to the flood exclusion on the policy. Homeowners had the option to buy flood insurance that is reasonably priced but they chose not to.

Mississippi is well known in the insurance industry for exorbitant court awards and I do not blame the company for pulling out of the state.

[conservativehusker]

That has not been my experience...(I work for a competitor)..they are a good company...Anytime you have the largest market share you are going to have lots of examples of problems..but as a whole I would have my insurance with them if I didn't have it already with the BEST company out there!!!..LOL

[conservativehusker]

Our friend SHEPARD SMITH ...gave the obligitory tsk tsk tsk..when reporting this last night during Brit Humes show....I really can't stand that Metrosexual...!

[AlexW]

Thanks to all for the information...Maybe it was AllState.
IIRC, it was a division of Sears.

[DCPatriot]

Good one, GLGB!

[Sloth]

Then it sounds like the MSM is right for once.

[governsleastgovernsbest]

Thanks, DC. I note that many folks on the thread are confusing two issues: State Farms claims handling, which may or may not be subject to criticism, and State Farm's right not to do business in Mississippi, which should be indisputable.

Are there other companies that MS wants to prevent from leaving or force from coming in? Hey MS: build a good business climate and companies will beat a path to your door!