Insurance Administration orders State Farm to refund premium increases that resulted from "not at fault" claims

State Farm, one of the largest automobile insurance providers in Maryland, has been ordered to refund all premium increases that were due to "not at fault" automobile insurance claims by Maryland customers.

The refund orders, which were revealed by a official of the Maryland Insurance Administration (MIA) who is not authorized to speak on the record, were issued after State Farm was found to be non-compliant with the section of Maryland insurance law that pertains to notification of rate changes.

Prior to 2014, State Farm did not increase insurance premiums when a "not at fault" automobile insurance claim was filed. This meant that customers could submit claims for losses covered under the "comprehensive" section of their State Farm automobile insurance policy without incurring a premium increase. For example, if a customer made a claim due to auto theft, hail storm damage, or striking a deer (all of which are covered by the comprehensive section of a policy), State Farm would not increase their rates. "Uninsured motorist" claims, another example of "not at fault" claims, also did not cause customers' premiums to increase prior to 2014.

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