State Farm in the news again for handling of fire damage claims

State Farm in the news again for the handling of fire damage claims Shannen Doherty has prevailed in the lawsuit against her insurance company, which she claimed didn’t want to shell out money to build her a new home after a wildfire, but after losing her suit in court, she won on appeal.

Shannen Doherty wins a lawsuit against her insurance company, State Farm. They refuse to cover the smoke damage done to her house by a fire that never reached her home, but burned nearby causing smoke damage to it. She hires another contractor who estimates smoke and soot damaged nearly every room in the house. The judge rules in favor of State Farm saying that they only have to cover the fire damage and not smoke damage. Doherty appeals this ruling and wins because the insurance company’s actions were “highly unreasonable,” according to an appellate court.

The lawsuit filed by the “Beverly Hills, 90210” star last year against State Farm alleged breach of contract and bad faith. According to Doherty, she purchased a policy from State Farm for her home in Coldwater Canyon before a wildfire swept through the area near Burbank in October 2008.

Although the fire never reached Doherty’s home, smoke from the blaze damaged the property. In May 2009, State Farm’s contractor estimated it would cost $250,000 to clean and rebuild Doherty’s house; however, she said State Farm offered her only $176,000 – not nearly enough to cover the repairs – and refused to pay for a new house.

Doherty then hired another contractor, who estimated that smoke and soot damaged nearly every room in the house. In court papers, Doherty claimed State Farm was trying to make her “walk away from a home she can’t live in.”

In August 2011, a Los Angeles County Superior Court judge sided with State Farm and awarded the company about $58,000 in damages.

Doherty appealed the judge’s ruling and in a landmark decision, an appellate court last week sided with Doherty. The state I Court of Appeals in Santa Ana called State Farm’s conduct “highly unreasonable,” which was enough to reverse the lower court’s ruling in favor of the insurance company. Insurance companies are likely to come under higher scrutiny for how they handle claims following the anger of customers following Hurricane Ida in 2021 and the record flooding and storm damage caused.

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