The parties have reached a tentative $2 million settlement in an action filed against Nationwide Mutual Fire Insurance Company and related companies on behalf of California policyholders who were sent a selection/rejection form by the company and had their uninsured motorist coverage limits raised unilaterally by the company above $30,000/$60,000 and paid for the coverage between January 1, 1994, and December 31, 2002. The action alleges that in doing so, the company violated state unfair competition laws and the California Legal Remedies Act. Claim forms must be postmarked by October 22, 2003, to be considered valid.

The action alleges that the companies, Nationwide Mutual Fire Insurance Company, Nationwide Property & Casualty Company, and Nationwide Mutual Insurance Company, improperly sent selection/rejection slips to auto insurance policyholders who requested uninsured/underinsured motorist (UM/UIM) coverage that was less than the bodily injury coverage they had requested. The form allegedly indicated that the policyholder had to sign the form and return it to the company in order for the company to be able to issue UM/UIM coverage in an amount less than the bodily injury coverage. Allegedly, if the policyholder failed to return the form, the company automatically increased UM/UIM coverage to match the policyholder's bodily injury coverage, so that these policyholders saw increases to their insurance premiums.

The claim payment process will proceed in two steps: First, all eligible policyholders who file a claim in a timely manner will receive a $75 payment via mail. Second, the claims administrator will make excess damage payments to those policyholders who establish that they suffered any damages greater than the $75 paid in the first step of the process. To receive a claim form, call the claims administrator at (866) 345-0359, Monday through Friday, PDT.

To qualify for a payment above $75, policyholders must submit copies of any correspondence, bills, proof of payment, and copies of checks within their possession to establish each increased premium payment. The following must be established by the submitted information: (1) the date the payment was submitted to Nationwide; (2) the date the bill was received by the policyholder; and (3) the amount of the paid premium increase.

The settlement will not be effective until the court grants it final approval. The court has scheduled a hearing on the matter for September 22, 2003.