State Automobile Mutual Insurance Company (State Auto) must face a class action lawsuit brought by policyholders who claim they and their brokers were tricked into buying "phantom insurance" coverage. In a written opinion published February 22, 2023, U.S. District Judge Jeffrey L. Schmehl denied State Auto's motion to dismiss Plaintiff Kristina Travis' class action claims for breach of contract and fraud, finding that: "Plaintiff has properly alleged that defendants violated the contractual obligations that were entered into when it sold the policies to her."
In her class action suit, Travis alleged that the 13 dwelling fire insurance policies for properties she owns included redundant coverage that was not properly disclosed on the insurer's website, which is called the Connect Platform. According to the Complaint, between 2015 and 2021, “the Connect Platform used dark patterns to create a deceptive buying environment that deceived policyholders and brokers into buying supplemental coverages within Dwelling Fire policies that they otherwise would not have bought.” Dark patterns are illegal tactics that companies employ to trick users by means of manipulative interface designs that obscure, subvert, or impair decision-making around buying choices.
The scheme worked because, in addition to the dark patterns on the Connect Platform, State Auto fraudulently omitted material information from each policy’s declarations page. State Auto’s scheme was "designed to trick unsuspecting consumers and their brokers into purchasing lines of phantom insurance within dwelling fire policies, which caused the plaintiff policyholders to pay for coverage that was already included with the policy," Travis wrote in her complaint.
This class action lawsuit is actively developing. Be sure to visit our blog frequently for important updates on this case and others that Golomb Legal, P.C. is currently handling. For more information about our law firm and the types of cases we accept, please feel free to call (215) 278-4449 or submit an online contact form.