Allegations of corporate influence and racketeering
$250 million settlement
The State Farm settlement, a racketeering class action concluded with a $250 million agreement, involved allegations of potential corporate influence on the Illinois Supreme Court.[47] According to the lawsuit's amended complaint, State Farm was accused of leveraging its influence and financial contributions to nonprofits such as the U.S. Chamber and the Illinois Civil Justice League. The claim stated that this alleged influence played a role in the appointment of a specific justice to the Illinois Supreme Court in 2004.[48] Subsequently, the justice joined four other state justices in overturning a billion-dollar judgment against State Farm. State Farm has consistently denied any wrongdoing and maintains that the claims are without merit.[49]
$250 million settlement
The State Farm settlement, a racketeering class action concluded with a $250 million agreement, involved allegations of potential corporate influence on the Illinois Supreme Court.[47] According to the lawsuit's amended complaint, State Farm was accused of leveraging its influence and financial contributions to nonprofits such as the U.S. Chamber and the Illinois Civil Justice League. The claim stated that this alleged influence played a role in the appointment of a specific justice to the Illinois Supreme Court in 2004.[48] Subsequently, the justice joined four other state justices in overturning a billion-dollar judgment against State Farm. State Farm has consistently denied any wrongdoing and maintains that the claims are without merit.[49]
Hurricane Katrina aftermath
Rigsby v. State Farm and 100 million settlement
In 2006, two former State Farm claims adjusters, sisters Cori and Kerri Rigsby, acted as whistleblowers and filed a qui tam suit against State Farm under the False Claims Act. The Rigsby sisters claimed that State Farm shifted state claims to federal flood insurance that should have been covered by private wind insurance, making the federal government and not State Farm liable for the insurance. In 2013, the Rigsbys won the fraud case focused on one Mississippi home; in 2016, the U.S. Supreme Court upheld the verdict. As part of the $100 million settlement, State Farm dismissed its counterclaims against the whistleblowers, alleging breaches of employment agreements and other laws. The federal government will receive the $100 million in restitution, not individual policyholders.[50]
Wrongful denial of claims
A 2007 investigation by CNN reported that major car insurance companies, including State Farm and Allstate Insurance, were increasingly fighting claims of those alleging injury. Some injured parties argued these were unfair practices.
Rigsby v. State Farm and 100 million settlement
In 2006, two former State Farm claims adjusters, sisters Cori and Kerri Rigsby, acted as whistleblowers and filed a qui tam suit against State Farm under the False Claims Act. The Rigsby sisters claimed that State Farm shifted state claims to federal flood insurance that should have been covered by private wind insurance, making the federal government and not State Farm liable for the insurance. In 2013, the Rigsbys won the fraud case focused on one Mississippi home; in 2016, the U.S. Supreme Court upheld the verdict. As part of the $100 million settlement, State Farm dismissed its counterclaims against the whistleblowers, alleging breaches of employment agreements and other laws. The federal government will receive the $100 million in restitution, not individual policyholders.[50]
Wrongful denial of claims
A 2007 investigation by CNN reported that major car insurance companies, including State Farm and Allstate Insurance, were increasingly fighting claims of those alleging injury. Some injured parties argued these were unfair practices. State Farm and Allstate have denied these allegations.[51] This followed on the heels of criminal investigations by the states of Louisiana and Mississippi, alleging that State Farm had wrongly denied claims stemming from Hurricane Katrina.[52][53] Plaintiff's attorney Richard F "Dickie" Scruggs later pleaded guilty in March 2008[54] for his role in trying to pay Judge Henry Lackey of Mississippi a US$50,000 bribe for a favorable ruling in a related case involving a US$26.5 million settlement after Hurricane Katrina.[55]
Florida potential withdrawal
In early 2009, the State Farm Florida subsidiary, the state's largest insurer, offered to withdraw from writing property insurance business in Florida after state regulators refused to approve a 47% property rate increase. State Farm said that, in Florida, it had paid out US$1.21 in claims for every dollar in premiums since 2000. Several other home insurers had also pulled out of Florida; many homeowners used the Citizens Property Insurance Corporation run by the state government.[56] State Farm has since decided to remain in Florida, although with a reduced amount of property policies.[57]
In 2010, State Farm and Renaissance jointly formed DaVinci Reinsurance Ltd. which insured more than 3.5 million homes in 2010.[58]
Other lawsuits
Campbell v. State Farm
In 1981, Curtis Campbell caused an accident in which a man was killed and another was left permanently disabled. Both witnesses at the scene confirmed Campbell was at fault. State Farm contested liability and declined settlement offers from the victim's estates.[59] State Farm assured Campbell that "their assets were safe, that they had no liability for the accident, that [State Farm] would represent their interests, and that they did not need to procure separate counsel."[60] Despite State Farm contesting liability, the jury rendered a verdict that Campbell was 100 percent liable for the accident. State Farm refused to pay the excess amount or post a supersedeas bond to allow Campbell to appeal the verdict. Campbell obtained his own counsel to do this.[61]
In 1984, while the appeal was ongoing, Campbell reached a settlement with the victim's estate, where Campbell would pursue an insurance bad faith action against State Farm. The attorneys for the victim's estate would represent Campbell in the bad-faith suit.
Campbell v. State Farm
In 1981, Curtis Campbell caused an accident in which a man was killed and another was left permanently disabled. Both witnesses at the scene confirmed Campbell was at fault. State Farm contested liability and declined settlement offers from the victim's estates.[59] State Farm assured Campbell that "their assets were safe, that they had no liability for the accident, that [State Farm] would represent their interests, and that they did not need to procure separate counsel."[60] Despite State Farm contesting liability, the jury rendered a verdict that Campbell was 100 percent liable for the accident. State Farm refused to pay the excess amount or post a supersedeas bond to allow Campbell to appeal the verdict. Campbell obtained his own counsel to do this.[61]
In 1984, while the appeal was ongoing, Campbell reached a settlement with the victim's estate, where Campbell would pursue an insurance bad faith action against State Farm. The attorneys for the victim's estate would represent Campbell in the bad-faith suit.
In 1989, Campbell's appeal was denied by the Utah Supreme Court.[59]
Radcliff v. State Farm
Following the [https://www.weather.gov/lot/2006apr14#:~:text=During%20the%20late%20afternoon%20and,and%20Jasper%20(IN)%20counties. Good Friday 2006 hailstorm] in Indiana that resulted in over $1 billion in property damages, State Farm faced approximately 50,000 claims for damage, out of which it rejected more than 7,000 claims. Joseph Radcliff, a roofer who established a company to repair homes damaged by the storm, was hired by around 300 State Farm policyholders.[64] During his work, Radcliff observed that some of his clients, whose claims had been denied by State Farm, resided next to homeowners whose claims had been approved by other insurance companies. Radcliff reported State Farm to the Indiana Department of Insurance.[65]
In response, State Farm took legal action against Radcliff, labeling him as the defendant in a case where they accused him of fourteen felony counts, including corrupt business influence and attempted theft. State Farm based these charges on fabricated evidence claiming that Radcliff had vandalized roofs in order to file fraudulent insurance claims.[66] However, all charges against Radcliff were eventually dismissed. Radcliff's business lost 385 out of 400 jobs as a result of the charges, despite them being dismissed.
In the subsequent legal proceedings, Radcliff countersued State Farm, alleging defamation, abuse of process, and interference with business relationships. The case advanced to a jury trial, where Radcliff was awarded $14.5 million.
Doherty v. State Farm
In a lawsuit filed by actress Shannen Doherty against State Farm, a federal jury in Los Angeles awarded her $6.3 million in damages.[68] The lawsuit claimed that State Farm had failed to adequately compensate Doherty for the damage to her Malibu home caused by a California wildfire in 2018. The jury found that State Farm's denial of policy benefits for Doherty's property was unreasonable and lacked proper cause. State Farm expressed empathy for Doherty's health but disagreed with the jury's decision,[69] indicating that they would explore legal options, including a possible appeal.
Cook v. State Farm
In 2015, Charles and Bernadette Cook were involved in a car crash where their vehicle struck an uninsured vehicle stopped sideways in their traffic lane. The Cooks had coverage through State Farm against uninsured motorists and filed a claim accordingly. According to their policy, State Farm was obligated to pay up to $250,000 per person or $500,000 per occurrence, with a personal liability limit of $1 million.[70] State Farm refused to pay the awarded amounts of $100,000 for Charles Cook and $400,000 for Bernadette Cook when they pursued their claim. The insurer cited Illinois statute 215 ILCS 5/143a, which it claimed allowed them to reject awards exceeding $75,000, despite the awards falling within the policy limits. State Farm's refusal to pay led to a lawsuit filed by the Cooks against the company, alleging negligence in various aspects of the claims process.[71] Additionally, it was claimed that during arbitration, State Farm's lawyer introduced personal information that had been excluded as evidence, which was considered "willful and wanton conduct."[72] State Farm agreed to a settlement of $650,000 and dropped its own suit against Bernadette Cook. The settlement amount is believed to be the largest reported for a bad faith claim against State Farm in Illinois.[73]
Julian v. State Farm
State Farm was hit with a class-action lawsuit in California for allegedly breaching its contracts with drivers. The lead plaintiff, Joan St. Julian, claims that State Farm violated the law by failing to pay sales tax to drivers when reimbursing them for the "actual cash value" of their cars that were deemed total losses.[74] According to the lawsuit, State Farm systematically underpaid claims made by thousands of consumers who experienced total vehicle loss. The lawsuit alleges that State Farm processed around 115,000 total loss claims during the relevant period, with approximately 10 percent of those claims not being paid the sales tax owed.[75]
Wildfire and hailstorm damages
State Farm pulls out of California due to wildfire risk
As of May 27, 2023, State Farm has ceased accepting new applicants for business and personal casualty insurance in California.[76][77] State Farm states that this decision was made due to "historic increases in construction costs outpacing inflation, rapidly growing catastrophe exposure, and a challenging reinsurance market."[77] California has had over 15,000 wildfires from 2021 to 2023,[78] partially due to a dry, windy and hot climate. More than 2.7 million people live in "very high fire hazard severity zones".[79] In May 2026, California Insurance Commissioner Ricardo Lara announced that the state was seeking millions of dollars in penalties against State Farm following a regulatory investigation into the company's handling of claims arising from the January 2025 Los Angeles-area wildfires, including the Palisades and Eaton fires.
State Farm pulls out of California due to wildfire risk
As of May 27, 2023, State Farm has ceased accepting new applicants for business and personal casualty insurance in California.[76][77] State Farm states that this decision was made due to "historic increases in construction costs outpacing inflation, rapidly growing catastrophe exposure, and a challenging reinsurance market."[77] California has had over 15,000 wildfires from 2021 to 2023,[78] partially due to a dry, windy and hot climate. More than 2.7 million people live in "very high fire hazard severity zones".[79] In May 2026, California Insurance Commissioner Ricardo Lara announced that the state was seeking millions of dollars in penalties against State Farm following a regulatory investigation into the company's handling of claims arising from the January 2025 Los Angeles-area wildfires, including the Palisades and Eaton fires.[80]
State Farm denies claims for hail damage
Several lawsuits in Oklahoma alleges State Farm failing to pay out claims for hail damage in 2024. As of April 2026, more than 600 lawsuits were pending against State Farm in Oklahoma alone.[81]
East Troublesome fire
Several survivors of the East Troublesome Fire in October 2020 have filed lawsuits against State Farm, alleging that the company underestimated the costs of rebuilding and delayed claim payments.[82] One attorney representing two families, stated that numerous families were experiencing delays of up to a year in receiving payment from State Farm.[83][84] Another plaintiff alleged that State Farm undervalued his home by less than half the actual rebuilding cost and delayed payment for the coverage of personal property.[85] The lawsuits cite Colorado's statute that penalizes insurance companies for unreasonable payment delays.
Tubbs fire
The Tubbs Fire occurred in October 2017. It was one of California's most destructive fires, burning 36,810 acres and allegedly killing 22 people.[86] Six months after the fire, a large number of people claimed that State Farm had refused to pay them in full despite losing everything they owned.[87] To get their full payout, they had to create a detailed, item-by-item list of everything that was lost, or their payout was reduced by 25%. Policyholders stated that they received letters from State Farm suggesting that the California Code requires a listed inventory "for some time." The California Department of Insurance denied this requirement.[88]
Plaintiff lawsuits
Jewish discrimination
In 1993, Todd Hindin filed a lawsuit against State Farm for allegedly keeping a list of prominent lawyers referred to within State Farm as the "Jewish Lawyers List". Any claims made by clients of these attorneys were automatically forwarded to State Farm's fraud unit, potentially on the basis of the religion and national origin of the lawyers. These claims would then be neither settled nor paid. State Farm initially claimed that this was not a matter of discrimination, but of coincidence. Frank Taylor, an experienced economist on retainer for the Appellants, argued that though the states involved contained 2-5% Jewish populations, the list contained 14% religiously or ethnically Jewish lawyers. People who had worked for State Farm, including former Divisional Claim Superintendent Ron Middler, testified that the list was potentially used to screen the lawyers mentioned in the list. State Farm paid out $30 million to Todd Hindin and his clients for discrimination on the basis of religion and national origin.[89]
Documents that Hindin uncovered would assist in another case in 2003, Campbell v. State Farm, in which State Farm had to pay out $145 million in punitive damages (later reduced by the U.S. Supreme Court) after acting in bad faith.[90] State Farm had to pay damages to the families of two car crash victims for whom Campbell was responsible, despite originally informing him and his family "that their assets were safe, that they had no liability for the accident, that [State Farm] would represent their interests, and that they did not need to procure separate counsel".
Jewish discrimination
In 1993, Todd Hindin filed a lawsuit against State Farm for allegedly keeping a list of prominent lawyers referred to within State Farm as the "Jewish Lawyers List". Any claims made by clients of these attorneys were automatically forwarded to State Farm's fraud unit, potentially on the basis of the religion and national origin of the lawyers. These claims would then be neither settled nor paid. State Farm initially claimed that this was not a matter of discrimination, but of coincidence. Frank Taylor, an experienced economist on retainer for the Appellants, argued that though the states involved contained 2-5% Jewish populations, the list contained 14% religiously or ethnically Jewish lawyers. People who had worked for State Farm, including former Divisional Claim Superintendent Ron Middler, testified that the list was potentially used to screen the lawyers mentioned in the list. State Farm paid out $30 million to Todd Hindin and his clients for discrimination on the basis of religion and national origin.[89]
Documents that Hindin uncovered would assist in another case in 2003, Campbell v. State Farm, in which State Farm had to pay out $145 million in punitive damages (later reduced by the U.S. Supreme Court) after acting in bad faith.[90] State Farm had to pay damages to the families of two car crash victims for whom Campbell was responsible, despite originally informing him and his family "that their assets were safe, that they had no liability for the accident, that [State Farm] would represent their interests, and that they did not need to procure separate counsel".[91]
New York City garage lawsuit
On April 18, 2023, a parking garage in Manhattan's Financial District collapsed. The collapse killed one worker and injured five others, as well as crushing the cars in the garage.[92] A total of 43 of the damaged cars were insured by State Farm policyholders, to which State Farm paid out $1.5 million in payments to the garage's customers whose vehicles were damaged in the collapse.[93] State Farm alleged that the owners "failed to properly operate, manage, maintain and/or control the garage", thus resulting in the collapse.[93]
5.4 million RICO suit against doctors
In a civil RICO suit filed in 2005, State Farm was awarded over $15.4 million by a federal jury in a case involving alleged medical fraud. Arnold Lincow, an osteopathic doctor, along with eight other defendants, were accused of inflating patients' medical bills to defraud insurers systematically.[94] State Farm claimed in court documents that Lincow devised a scheme to inflate the medical bills of car accident victims by prescribing unnecessary tests, treatments, prescriptions, and medical equipment. The scheme allegedly involved fabricating treatment records, falsifying injury descriptions, and submitting bills for services not rendered. Lincow was accused of directing other doctors and employees to perform medically inappropriate and unnecessary services. According to the lawsuit, Lincow also hired Sacks to misinterpret diagnostic tests as positive to exhaust available medical coverage. Additionally, Lincow was accused of orchestrating a kickback scheme with Hirsh's pharmacy, filling unnecessary prescriptions in exchange for inflated rent payments. All nine defendants were found to participate in a RICO conspiracy, committing both common law and statutory insurance fraud.[95]
Violation of privacy laws
On July 19, 2023, plaintiffs Mary Brown, Andy Velazquez, William Midgett, and Diane Coughlin took legal action by initiating a class action lawsuit in Cook County Circuit Court against State Farm. This legal action is rooted in allegations of State Farm's violation of Illinois privacy rights laws. The plaintiffs are individuals who were involved in accidents with drivers insured by State Farm.[96]
The core of their claim revolves around the alleged sharing of their personal health information with Insurance Services Office Inc. (ISO), a company specializing in comprehensive risk management analysis, supported by an extensive database.[97] Both federal HIPAA law and the Illinois state constitution expressly forbid the disclosure of health information without an individual's explicit consent.[98]
The plaintiffs maintain that ISO benefited financially by accumulating personal information for utilization within the insurance industry, including by State Farm.[99]
Gender discrimination
In a sex discrimination lawsuit against State Farm in 1985, Judge Thelton Henderson approved a settlement that required the company to pay up to $420,000 each to women who were denied jobs as insurance agents in California due to gender discrimination.[100] The settlement, limited to California residents due to the class action nature of the lawsuit, also stipulates that women must receive 50 percent of the available sales agent positions at State Farm in California over the next 10 years.[101]
Disability discrimination
In July 2023, Elisa Brown, who was employed by State Farm for 20 years, sued State Farm alleging "discrimination and retaliation" because of her bladder disability. Brown was diagnosed with overactive bladder syndrome in February 2020, suffering from urinary incontinence.
Brown claims that State Farm met her initial need for accommodations. After a few months, however, her supervisor prohibited her from taking unscheduled breaks, and her breaks were monitored. After reaching out to State Farm's human resources with no resolution, she reached out to the Equal Employment Opportunity Commission. After notifying HR about her contacting the EEOC, Brown was terminated from her State Farm position.[102]
Racial discrimination
There have been several allegations and lawsuits of racial discrimination against State Farm. One lawsuit, filed in 2020, describes a pattern of discrimination against seven agents of color by the company, citing a study done by The Center on Race, Inequality and the Law at the NYU School of Law. According to the survey, it was found that Black homeowners were required to complete more paperwork and engage in more interactions with claims adjusters before State Farm would approve their claims. The survey revealed that Black customers had a 20% higher likelihood of having to communicate with a State Farm representative on at least three separate occasions before their claims were accepted. Additionally, they were more frequently asked to provide supplementary documentation for their claims.[103] Another lawsuit, filed more recently by a former Indian American employee, accuses co-workers of racial harassment.[104]
In 2019, Darryl Williams, an African American property owner, filed a discrimination lawsuit against State Farm, seeking class action certification. Williams had filed an insurance claim for damage caused by a burst pipe in one of his buildings. He felt that he was treated unfairly based on his race, as a State Farm claims adjuster reportedly expressed skepticism about his version of events, citing a high level of fraud in his area. State Farm eventually paid only a fraction of his claim, leading Williams to sell his buildings to cover his expenses.[105]
Overcharging on premiums
An administrative law judge at the California Department of Insurance ordered State Farm to issue refunds and reduce rates after being found guilty of overcharging customers by $85 million.[108] The judge concluded that State Farm's premiums for homeowners insurance have been excessively high since July 15, 2015.[109] The ruling orders State Farm to refund policyholders for overcharges collected after that date and reduce its homeowners insurance rates by 7 percent.[110]
Climate change
Under CEO Michael L. Tipsord, State Farm has announced a Green Mission to "lead by example" in environmental philanthropy.[111][112] Ceres has found that State Farm invests millions of US dollars to finance energy companies.[113] Others place State Farm's fossil fuel investments at US$22.4 million.[114] State Farm was viewed as not considering climate change in their investments.[115]
In order to rectify the situation and show its green credentials, State Farm has committed to reducing its greenhouse gas emissions by 50% by 2030.[116]
LGBT
On May 24, 2022, State Farm ended its partnership with GenderCool, an organization that seeks to raise awareness of "transgender and non-binary youth", after receiving backlash from right-wing and conservative political figures and media outlets.[118]
