State Farm looks to be dismissed from suit

State Farm Insurance Co. recently filed a motion to dismiss a class action suit in which it is accused of violating the Illinois Insurance Code. Madison County Circuit Judge Phillip Kardis, however, quickly denied the motion, and set a class certification hearing for June of 2005.

Cynthia Hoffman, who is represented by Stephen Tillery of Korein Tillery in St. Louis, brought the class action against State Farm Insurance Company in June 2002.

Hoffman, of Belleville, alleges that State Farm refused to issue or renew insurance policies solely on the basis of a credit report. She claims that refusal violates the Illinois Insurance Code.

Since October 2002 the Illinois Insurance Code has prohibited insurance companies from refusing to issue or renew an insurance policy based solely on a credit report.

Hoffman, a State Farm policy holder from August 1997 until January 2002, renewed her lapsed policy on March 2002, paying a six-month premium of $528.76. State Farm had canceled the policy, stating coverage was denied “based upon an insurance underwriting score developed from credit and automobile insurance claim information.”

Hoffman claims the cancellation forced her to pay $1,722 for a substitute policy from another insurance carrier.

The class action seeks damages for the excessive premium payments the class was required to pay based on State Farm’s alleged violation of the insurance code plus all attorney fees and court costs, plus interest.

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