State Farm claimed we owed them money. I said we didn’t. They pursued it. I countered. They ended up owing us money instead.

My wife’s small business purchased our unemployment insurance through State Farm until we sold the company a couple years ago. Unemployment insurance premiums are proportional to your payroll: you pay the insurer a certain percentage of each dollar you pay your employees. When you cancel a policy, you reconcile your payroll numbers with them to settle up one last time.

State Farm said they estimated we’d been paying our employees $100,000 a year1. Therefore, by their reckoning, we owed them another $1,000 in additional premiums as if we’d paid out $100,000 in payroll that final year, even though we sold the business in May. They sent me an audit form to complete if we wanted to use our true numbers instead of their estimate. I submitted their form and promptly forgot all about it.

6 months later I got an email from our insurance agent saying that we still owed State Farm $1,000. I replied that we did not and that they needed to recompute our supposed debt using the real numbers that I’d submitted to the audit.

We had the same interaction about 6 months later, then again another 6 months after that. State Farm claimed they’d sent us all the information in writing. We found that they’d been sending letters to the old office that we’d lost access to on the day we sold the business, and the new owner never bothered forwarding them to us. Regardless, I wasn’t about to pay them the $1,000.

I got a more urgent email from our agent toward the end of last year. State Farm wanted their money and were turning our account over to a bill collector if we didn’t pay it. I replied and made our position clear: if State Farm would put it in writing that they had computed our amount due based on our real payroll numbers, and if they mailed that to us at our current home address and not the old business address we weren’t at anymore, only then would I pay them.

Again, silence.

A couple months ago I got a call from a bill collector. He was OK to talk to. I told him his customer was smoking crack and he laughed. Then I repeated our demands: I wanted State Farm to give us an itemized invoice showing their accurate calculations, and I wanted it sent to our house. I promised him that if both happened, I’d cheerfully make arrangements to pay the invoice in full immediately. He said that was reasonable. We parted ways.

However, I’d run out of patience. I filed a formal complaint with California’s Department of Insurance explaining our side of the conversation, asking them to rule on our behalf, and loading them with evidence proving our argument.

2 weeks later, the Department of Insurance replied saying that we needed to appeal the dispute through State Farm’s internal process before involving the state. Their letter contained details about the precise person we needed to contact and the legal jargon to use.

I did that. I got a response from that person yesterday. Their letter contained the itemized calculations I’d asked for all along, a final ruling that State Farm owes us $200, and a promise to mail a refund check to our correct address by the end of the week.

It took 2 years for State Farm to straighten out their math. They could have offered to write off our “debt” a year ago and stop pestering us. I would have accepted that. Instead, they kept it up and lost.

Yay me!

If that check isn’t here in the next few days, I have the number of a bill collector I might hire.

  1. All numbers are fictional for storytelling purposes. ↩︎