AUSTIN – State Farm Insurance won't have to refund nearly $650 million in alleged overcharges any time soon after a state appeals court ruled Friday that the company was denied its due process rights in a battle with the Texas Department of Insurance over its homeowner rates.

AP

In a unanimous decision, the Third Texas Court of Appeals said that State Farm's legal rights were violated in 2003 when the insurance department ordered the company to lower its rates by 12 percent after finding that it was overcharging its Texas customers by that amount.

State Farm's refusal to reduce its rates and its prolonged legal fight with the state over the past five years has raised the total overcharges to nearly $650 million, including penalty interest.

The Austin-based appellate court sent the dispute back to state Insurance Commissioner Mike Geeslin, who will have to review the company's rates again, but this time using a more stringent standard in determining how much State Farm policyholders have been overcharged since 2003.

The company has adamantly rejected the insurance department's finding that it charged excessive rates. The insurer provides coverage for nearly one million homeowners in Texas.