December 12, 2005 by Canadian Underwriter
State Farm Insurance is issuing refunds to approximately 6,300 automobile insurance policyholders in Alberta as a result of an error in the application of a New Business Discount that was introduced in 2000.
The average refund is approximately $74.00
State Farm reported the error to the Alberta Superintendent of Insurance and advised of its plan to process the refunds to those affected.
The refund applies to customers who were eligible for the New Business Discount credit, but the credit was not applied. State Farm’s New Business Discount Credit constitutes a 5% discount on mandatory and collision coverage premiums.
State Farm customers who are entitled to a refund will receive written notification in December 2005. Refunds including taxes and interest will be issued promptly. Steps have been taken to correct the error, the company reports.
“State Farm customers who receive a refund and require additional information should contact their State Farm agent,” a company press release says. “Any eligible former policyholders who cannot be contacted to receive their refund may contact any State Farm agent.”
According to the release, State Farm will be donating any unclaimed amounts to the United Way.
“We sincerely regret this error and apologize to those policyholders affected,” State Farm senior vice president Bob Cooke says.
State Farm Insurance is the fourth-largest auto insurer in Canada and the fifth-largest property and casualty insurer in Canada.