State Farm Fire and Casualty Co. has agreed to reinspect the siding of nearly 150 homes that were damaged in a hailstorm in November 1996, the Maryland Insurance Administration announced Monday.
The owners of the homes in Severn and elsewhere had filed complaints against the company.
Homeowners in the Provinces neighborhood of Severn complained to the insurance administration last year after State Farm adjusters said they would pay only to replace damaged siding. The homeowners said the color of the new siding would not match the old siding that was not damaged and demanded that State Farm pay to replace all of their siding.
State Farm officials said they were not required to replace all of the siding on a home when only a portion had been damaged.
But according to a statement issued by the insurance administration, an insurer must "take into account the impact significant color mismatches may have on the value of a house."
The company must compensate the homeowner for the decrease in value of the home or replace undamaged siding to ensure a match, the agency said.
State Farm agreed to the settlement, admitting no wrongdoing, after the insurance administration ordered the company recently to pay a $50,000 fine.
If the company complies with the agreement, it will not have to pay the fine. But if State Farm fails to comply, it would pay the fine and a $50,000 penalty.
The settlement does not mean that all homeowners who complained will automatically get new siding, the state said. The company must only pay for all new siding or compensate the homeowner in cases of "significant mismatches," the insurance administration said.
State Farm will review all claims for siding damage that it has received since July 1996, even though those homeowners did not complain to the state.
"This settlement is a huge win for State Farm policyholders, and I applaud State Farm for acting in the best interest of its customers," Insurance Commissioner Steven B. Larsen said in the statement.
State Farm officials could not be reached for comment last night.
Pub Date: 3/04/98