Allstate class action lawsuit overview:
- Who: Allstate Vehicle and Property Insurance Company must face a class action lawsuit alleging it underpaid policyholders for property damage claims.
- Why: An Arizona federal judge denied Allstate’s motion to dismiss the class action lawsuit.
- Where: The Allstate payment class action lawsuit was filed in Arizona federal court.
An Arizona federal judge has refused to dismiss an Allstate class action lawsuit alleging the insurance company underpaid policyholders for property damage claims.
The Allstate class action lawsuit challenges the insurer’s method of calculating actual cash value payment obligations for structural property losses.
Plaintiffs Peter and Naomi Shumway initially filed the Allstate class action lawsuit in April 2023, and added Lillie Hernandez as a plaintiff in August 2023. About a month later, the Shumways voluntarily dismissed their claims.
Hernandez subsequently filed an amended Allstate class action lawsuit omitting the Shumways’ claims.
Plaintiff says Allstate payment improperly calculated depreciated labor costs
Hernandez had an Allstate insurance policy covering certain losses to her home. She says her policy did not include a labor permissive form, which would expressly permit depreciation of future labor. Her policy allegedly does not allow for the withholding of labor of depreciation for any portion of her property loss.
When her home was damaged in August 2022, she submitted a claim requesting payment from Allstate for the covered loss. However, when adjusting her claim, Allstate allegedly withheld the costs for materials and labor needed to repair the structure as “depreciation.” As a result of this calculation, Hernandez says Allstate breached its obligations under her policy and underpaid her.
Allstate filed a motion to dismiss, arguing the Shumways and Hernandez lacked standing to sue and the Allstate class action lawsuit was filed past the policy’s statute of limitations.
U.S. District Judge Douglas L. Rayes disagreed, finding the Shumways and Hernandez all had standing to sue over the alleged Allstate payment claims. The judge determined their claims were not time-barred even though they were filed outside of the policy’s one-year limitations period, finding “the mere late filing of a claim is an insufficient basis for enforcing the policy’s limitation period.”
What do you think about the alleged Allstate payment reduction for depreciation of future labor costs on property damage claims? Let us know in the comments.
Hernandez is represented by J. Brandon McWherter of McWherter Scott Bobbitt PLC and Michaile J. Berg of Berg Law PLLC.
The Allstate payment class action lawsuit is Peter Shumway, et al. v. Allstate Vehicle and Property Insurance Co., Case No. 2:23-cv-00699-PHX-DLR, in the U.S. District Court for the District of Arizona.
Don’t Miss Out!
Check out our list of Class Action Lawsuits and Class Action Settlements you may qualify to join!
Read About More Class Action Lawsuits & Class Action Settlements:
18 thoughts onAllstate must face claims it underpaid property damage payments
Allstate is horrible they are crooks they constantly raise rates and dont cover anything. I had a pipe break in my wall flooded 4 rooms terrible damage. Massive amount of money will probably put me in bankruptcy.They wont cover it because they said it is seepage. It is a broken pipe. Worst insurance company in the world
Allstate is the worst insurance company ever. Thirteen months ago, hail destroyed most everyone’s home in the town I live in. Allstate of course was quick to attempt breach of policy by denying or rejecting my claim, so I was left with either retaining an attorney or hiring a P. A. adjuster. I calculated that a P.A. adjuster was probably cheaper, so I made the mistake of hiring one. Months of incompetence and lies finally led to appraisal and a claim payout to repair damages. After everyone was paid their percentages for services performed there was not enough to fix my house. My contractor is at breach of his contract and I’m not signing off of anything until my siding and gutters are replaced. I’ve got attorneys lost for words about my situation. My situation is a perfect example of how paying for home insurance through Allstate is quite literally a pointless waste of time and money. What is a person in my specific situation to do next?
Please notify me or add me to the suit for denied vehicular claim in 1997, for which we had proper coverage, waited for the police to respond and submitted all documentation, as per protocol.
Allstate only paid me 60% or a lawsuit when their client backed into me while I was all the way out of my parking stall! She even claimed she didn’t see me. I saw her and my car notified me of her right away and I tried to avoid her. They refused to pay for the accident and I felt helpless and hope this can result in something. It was just bad faith in their part.
Please add me to the class action lawsuit.
In the fall of 2022 I had a septic system back up in the house. They initially tried to get me to accept a $5000 payment as the water back up was assumed to be from the sewer system not a septic system. After I went through the worker his supervisor who also confirm that I would only get $5000. I spoke with my Allstate person in Wenatchee, Washington, who made some calls and straighten that out. The attempt to make me take $5000 should be criminal itself. They then accepted the assessment of the approved workers but refused to pay me $7000 of the appraised value of the damage. Please contact me as soon as possible.