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Farmers Loses Court Ruling

September 06, 2006|From Bloomberg News

Farmers Group Inc. was ordered to pay $115 million to California and Nevada consumers who paid additional charges for monthly car insurance policies.

San Diego County Superior Court Judge Jay M. Bloom ruled that Farmers Group violated contracts with customers by charging more than they originally agreed to pay, Timothy Blood, a lawyer for the plaintiffs, said in a statement.

The ruling applied to people who bought Farmers Insurance policies in the two states from October 2000 to August 2005 and were assessed "service charges" in addition to premiums, the statement said.

Blood didn't return a call seeking comment.

Farmers spokesman Jeff Beyer said in a statement that the ruling "erroneously interprets fees for our billing options as insurance premium payments.... The only dispute was as to the location of where the fee is shown."

Farmers, the second-largest auto insurer in California, will appeal the ruling, Beyer said. Farmers is a unit of Zurich Financial Services.

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