State Farm Agrees to $15M Settlement for Underpaid Vehicle Claims
State Farm will pay $15.6 million to settle claims that it underpaid policyholders for total loss vehicles using an incorrect valuation method.Summary
A federal judge approved a preliminary class action settlement in which State Farm agreed to pay $15.6 million to policyholders who filed total loss claims between November 2016 and October 2021. The settlement resolves allegations that State Farm underpaid policyholders by using valuation reports from Audatex that applied "typical negotiation adjustments" which plaintiffs argued systematically undervalued the vehicles. The company stopped using Audatex in October 2021 and denies all allegations. Lead plaintiff Rose Chadwick's case highlighted that State Farm valued her 2020 total loss claim at $4,121 but paid only $1,383, relying on a market-driven report that applied a 9% adjustment to comparable vehicle prices. Policyholders will receive an average of $489, and the settlement covers attorney's fees, litigation costs, and notice expenses.
(Source：Insurance Journal)