Lawsuit Accuses State Farm of Claim Mishandling and Racial Discrimination

A federal lawsuit filed by Eric Drake against State Farm Automobile Insurance Company accuses the insurer of mishandling an auto claim and racial discrimination. The complaint originates from a July 24, 2024 car accident in Texas, where Drake alleges the State Farm-insured driver caused the crash and that his $6,900 damage claim faced unreasonable delays and administrative barriers. Drake claims State Farm controlled the claims process and settlement resolution, requiring him to use a State Farm-approved body shop and imposing unusual obstacles compared to other claimants.

The dispute escalated over differing settlement amounts; State Farm initially agreed to $7,717.19 but issued two separate checks totaling less than that amount. Drake cashed both checks, believing full payment was made, but State Farm later demanded the return of the second check, alleging it was sent in error. This led to accusations of breach of contract and alleged intentional misrepresentation by State Farm.

Central to the lawsuit are allegations of racial discrimination under federal law (42 USC § 1981), with Drake asserting that State Farm's conduct was willful and caused economic harm, emotional distress, and humiliation. Drake seeks compensatory and punitive damages, including emotional and future mental anguish, and has requested a jury trial.

The complaint does not cite specific policy provisions but focuses on alleged unfair claim handling and good faith failures. The case is currently at the initial complaint stage with no court rulings or insurer responses yet recorded.

This lawsuit underscores potential systemic issues in insurer claims processes, highlighting regulatory and compliance risks tied to allegations of racial discrimination and contract disputes. It invites broader scrutiny of insurer-claimant interactions, settlement practices, and claims processing fairness in the auto insurance market.