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State Farm Total Loss Class Action Lawsuit Overview:
- Who: A pair of consumers lodged a class action lawsuit against State Farm Mutual Automobile Insurance.
- Why: The plaintiffs allege State Farm applies a baseless rate adjustment to the value of vehicles so it won’t have to pay as much following total loss claims.
- Where: The class action lawsuit was filed in Illinois federal court.
State Farm undervalues total loss vehicles in order to reduce the payment it has to make to drivers who file total loss claims, a new class action lawsuit alleges.
Plaintiffs Maria Munoz and Sandra Smiling claim State Farm avoids its contractual obligation to pay consumers the cash value of their vehicles in cases of total loss by applying a “baseless flat rate adjustment.”
Munoz and Smiling want to represent a nationwide Class of consumers and Illinois and North Carolina subclass of consumers who are insured by State Farm and given a “typical negotiation adjustment,” on a total loss vehicle claim.
Third party vendors employed by State Farm determine the value of a vehicle following a total loss claim by evaluating the price of comparable vehicles in the relevant marketplace, according to the class action lawsuit.
Total Loss Vehicle Claims Subject to Unexplained Reduction by State Farm
Plaintiffs allege, however, that State Farm instructs its third party vendors to apply “an arbitrary and baseless flat rate adjustment to the value of each “comparable vehicle,” called a “typical negotiation adjustment.”
Munoz says State Farm applied a 4 percent “typical negotiation adjustment,” deduction on her 2020 Ford Escape after she made a total-loss claim on the vehicle.
Smiling, meanwhile, claims State Farm applied a “typical negotiation adjustment,” of around 6 to 8 percent on her 2014 Nissan Altima.
Munoz and Smiling claim State Farm provided no explanation for the adjustment or the company’s reasoning behind the value deduction.
“To avoid full payment under its policies, Defendant has devised a blatant and unlawful scheme to reduce its total-loss payments to insureds, by use of a deceptive, arbitrary and baseless “typical negotiation adjustment,” states the class action lawsuit.
Munoz and Smiling argue that State Farm is guilty of breach of contract, breach of covenant of good faith and fair dealing, unjust enrichment, and in violation of the Illinois Consumer Fraud and Deceptive Business Practices Act, and North Carolina Unfair Trade Practices Act.
The plaintiffs are demanding a jury trial and requesting relief in the form of actual, compensatory, statutory, and punitive damages, in addition to restitution for themselves and all Class Members.
A similar class action lawsuit was filed against State Farm this month by a California consumer who alleges the company breaks the law by not including sales tax when reimbursing drivers for total loss vehicles.
Were you given an adjusted rate by State Farm for the value of your vehicle following a total loss claim? Let us know in the comments!
The plaintiffs are represented by Andrew J. Shamis of Shamis & Gentile, P.A.
The State Farm Adjusted Rate Class Action Lawsuit is Munoz, et al. v. State Farm Mutual Automobile Insurance Company, Case No. 1:21-cv-05211, in the U.S. District Court for the Northern District of Illinois.
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31 thoughts onState Farm Applies ‘Baseless’ Rate Adjustments on Total Loss Vehicles, Says Class Action
I have 2 total loss cars they State Farm screwed me on
Perhaps even more egregious….
My 2014 Ford Escape was rear ended. State Farm insured it thru a Michigan Agent.
Claim approved, parts ordered and delivered last week, to a well known body shop who started repairs onlast Monday
Today Saturday the claims agent from SF calls me to tell me the car is considered totaled, as it will cost aprox 8700 less my 1000 deductible to fix it. She sidd the car was worth only ACV ? 8700 dollars. She went thru a bizantine calculation process and said they would give me about 2500 dollars and ‘take’ the rest.
As I understand it they get my 8700 dollar car for 2500 and I am left paying off the car (financed).
Wow. Slick Racket!
Do I have any recourse?
I have the money to cover the extra cost of fixing the vehicle over any ACV.
I can also fix the car at my expense and then go after state farm. Should wAppreciate your support and would be happy to pay for a conference. 248 318 6624
I had a 2018 and a 2022 Total Loss Claim with State Farm. Interested in joining.
State Farm totaled my pickup after it was recovered from being stolen. They offered at least $12,000 less than its pre-loss value, used the wrong trim model even though they had the VIN and the estimate for repairs reflected the correct trim. Their comps were 100s of miles away from my market area and had more than 100K miles more than my pickup. They just learned that I am an attorney and intend to sue them under my state’s unfair trade practices act unless they pay me the true pre-loss value. Do you have a form of complaint you can share with me.
Accident 11/27 total loss but pay is less than whats owed.. Add me plz
what was the mileage adjustment? Something else you may wish to include in your law suit
add me please
Add me
Totaled my truck. Walked away with nothing after 5.5 years of payments.
Add