Erie Insurance Co. nonmaterial depreciation class action settlement

Erie Insurance Co. has reached a settlement in a class action lawsuit to resolve whether the company wrongfully withheld nonmaterial depreciation from Ohio home insurance policyholders on home damage claims regarding the current costs of labor to make repairs. 

The legal arrangements describe the class with several exceptions. The class is made up of all policyholders under any homeowner residential property insurance policy issued by Erie who made a structural loss claim for property in Ohio between March 20, 2019, and Nov. 14, 2020, that resulted in an actual cash value (ACV) payment from which nonmaterial depreciation was withheld, or that would have resulted in an ACV payment but for the withholding of nonmaterial depreciation causing the loss to drop below the applicable deductible. 

Exclusions include:

• Policyholders whose claims arose under policy forms, endorsements or riders expressly permitting the nonmaterial depreciation within the text of the policy form, endorsement or rider, i.e., by express use of the words “depreciation” and “labor”
• Policyholders who received one or more ACV payments for claims, but not replacement cost value payments, that exhausted the applicable limits of insurance
• Policyholders whose claims were denied or abandoned without ACV payment 
• People related to defendants, members of their judiciary or class counsel and their families

The settlement was reached after a class action lawsuit — filed by Timothy and Carol Stevener — alleged Erie Insurance Co. compensated them for certain damage to their property, but “improperly depreciated the cost of the labor required to repair the damage of the Insured Property. As a result, Erie underpaid the Steveners’ claim, thus leaving them under-indemnified,” the lawsuit said. 

The company’s decisions exacerbated the plaintiffs’ ability “to pick up the pieces during a period of great need and tremendous stress. This is directly contrary to the purpose of insurance — to protect insureds when they are in such need,” according to the class action lawsuit. The lawsuit claimed Erie’s calculations of labor are systematic and made throughout Ohio and said Ohio law allows an insurer to depreciate the value of building materials, but not the cost of labor. 

The parties have agreed Erie Insurance Co. will pay for class members’ simple interest at the rate of 5% per annum on the net estimated nonmaterial depreciation that was initially withheld from ACV payments, from the date of the last ACV payment from which nonmaterial depreciation was withheld to the date all nonmaterial depreciation was paid (a.k.a. recaptured) by the insured class members. This covers damage to a home, building, manufactured home, condo or rental dwelling. 

Erie Insurance Co., the 11th-largest home insurer in the U.S., was founded in 1925. It has more than 6,000 employees and 13,000 independent agents. In March 2022, the company announced a first-quarter net income of $68.6 million, compared to $73.6 million during the same time period the year prior.

The company denies any wrongdoing, stating it has settled to avoid costs and the unpredictability of a trial.

Class members will only be eligible for settlement payments by filing online or mailing a claim form. Class members who choose nothing will receive no payment. 

The deadline for opting out of the Erie Insurance Co. settlement or objecting is July 20, 2022. 

A final approval hearing will be held Aug. 19, 2022.

Claims forms must be postmarked or submitted online by Oct. 3, 2022.

Who’s Eligible

The class is made up of all policyholders under any homeowner residential property insurance policy issued by Erie who made a structural loss claim for property in Ohio between March 20, 2019, and Nov. 14, 2020, that resulted in an actual cash value (ACV) payment from which nonmaterial depreciation was withheld, or that would have resulted in an ACV payment but for the withholding of nonmaterial depreciation causing the loss to drop below the applicable deductible. 

Potential Award

Varies

Proof of Purchase

Policy information may be required

Claim Form

NOTE: If you do not qualify for this settlement do NOT file a claim.

Remember: you are submitting your claim under penalty of perjury. You are also harming other eligible Class Members by submitting a fraudulent claim. If you’re unsure if you qualify, please read the FAQ section of the Settlement Administrator’s website to ensure you meet all standards (Top Class Actions is not a Settlement Administrator). If you don’t qualify for this settlement, check out our database of other open class action settlements you may be eligible for.

Claim Form Deadline

10/03/2022

Case Name

Stevener, et al. v. Erie Insurance, et al., Case No. 5:20-CV-0063, in the U.S. District Court for the Northern District of Ohio

Final Hearing

08/19/2022

Settlement Website

OhioDepreciationClass.com

Claims Administrator

Settlement Administrator
c/o Rust Consulting,Inc. – 7641
PO Box 2599
Faribault, MN 55021-9599
833-711-0255

Class Counsel

Erik D Peterson
ERIK PETERSON LAW OFFICES PSC

Stephen G Whetstone
WHETSTONE LEGAL LLC

Defense Counsel

Kenneth A Calderone
R Brian Borla
HANNA CAMPBELL & POWELL LLP