State Farm Class Action Argues Underpaid Total Loss Claims

A new State Farm class action lawsuit says the insurance company wrongfully values total losses in vehicle accident claims.

Plaintiff Larry Relf says despite the fact that State Farm markets itself as an honest and reputable company, the insurance carrier regularly denies providing total losses to claimants after vehicle accidents.

The State Farm class action lawsuit specifically accuses the insurance company of colluding with another company, Mitchell International Inc., in order to receive Work Center Total Loss Vehicle Valuation Reports.

As alleged by the plaintiff in the State Farm class action lawsuit, Mitchell contracts to determine the settlement and market value of vehicles once any policyholder deductibles have been applied.

The State Farm class action says that the insurance company is involved in a scheme to artificially deflate vehicle loss claims to make payments to first-party insureds lower than the pre-loss value of the vehicle when the car is defined as a total loss.

The State Farm class action lawsuit accuses J.D. Power, Mitchell, and State Farm of violating their contractual obligations to consumers in additional to unlawful conduct violating Georgia law.

As explained in the State Farm class action lawsuit, the valuation methodology used assigns actual cash values for total loss vehicles in a manner that is much lower than other valuation models such as those included in Kelly Blue Book and NADA.

The process by Mitchell and accepted by State Farm for assigning cash values includes locating comparable vehicles, adjusting comparable vehicles, calculating the base vehicle value and loss vehicle adjustments, and calculating the market value.

The State Farm class action lawsuit accuses the companies of using old and inaccurate methodologies to determine the amount paid out to a claimant on a first party insured loss.

According to the State Farm car insurance class action, the methods for making adjustments on options, mileage, and equipment are invalid from a statistics standpoint.

The plaintiff also argues that all of these flawed methods of arriving at a claim value are not based on industry-accepted standards and causes the claimant to receive an underpayment on their total loss vehicle.

The defendants in the State Farm class action lawsuit, according to the plaintiff, have been able to make millions of dollars by consistently engaging in the process to undervalue accident claims.

The company is accused of using this WCTL valuation method for the vast majority of claims brought by first party insured policyholders in Georgia following an accident, leading to a regular pattern of denying policyholders fair value.

The proposed Class in the State Farm class action lawsuit are represented by R. Walker Garrett of Morgan & Morgan PA, Jonathan B. Cohen and John A. Yanchunis of Morgan & Morgan Complex Litigation Group, and Jonathan H. Waller of Waller Law Office PC.

The State Farm Total Loss Evaluation Class Action Lawsuit is Larry Relf v. State Farm Mutual Automobile Insurance Company, et al., Case No. 4:18-cv-00240-CDL, in the U.S. District Court for the Middle District of Georgia, Columbus Division.

Join a Free Total Loss Car Accident Class Action Lawsuit Investigation

If you were insured under an auto insurance policy, experienced a total loss car accident, and were not reimbursed for sales tax and other fees by your insurance company in the last 5 years, you may qualify to join a total loss car accident class action lawsuit investigation.

Learn More

Read more:

What Is a Car Total Loss?

Total Loss Car Insurance Should Cover Taxes and Fees, Says Policyholder

Were You Fairly Compensated in the Vehicle Total Loss Process?