State Farm structural damage underpayment class action settlement

State Farm agreed to a class action lawsuit settlement to resolve claims it underpaid Alabama insurance policyholders’ structural damage claims.

The settlement includes all State Farm policyholders who made a structural damage claim for an Alabama property after a loss that occurred between March 8, 2011, and Aug. 3, 2017.

State Farm is an insurance company that offers policy for auto insurance, homeowners insurance and several other insurance types. Homeowners insurance policies may include coverage for structural damage, or damage to a home’s load-bearing walls, foundation or roof.

State Farm may underpay structural damage claims from Alabama policyholders, according to a class action lawsuit against the company. 

Plaintiffs in the class action lawsuit say their claims were sharply underpaid due to State Farm’s policies of deducting depreciation for labor costs. These policies allegedly resulted in actual cash value payments to policyholders instead of replacement cost value payments.

According to the policyholders, labor costs do not depreciate like materials do as labor is not susceptible to aging or wear. They claim State Farm shouldn’t be able to deduct depreciation from their replacement cost value payment.

State Farm hasn’t admitted any wrongdoing but agreed to resolve these allegations with a class action lawsuit settlement. The settlement total is not disclosed in the settlement agreement.

Under the terms of the State Farm settlement, class members can receive a cash payment based on the amount they originally received as a result of their structural damage claims.

Class members who received only an actual cash value payment or a partial replacement cost benefit from their claim can receive 100% of the nonmaterial depreciation that was initially deducted by State Farm, 44% of the general contractor overhead and profit depreciation initially deducted and 5.55% simple interest.

Class members who received a full replacement cost benefit from their claim after recovering all depreciation can receive 5.55% simple interest on the recovered nonmaterial depreciation or general contractor overhead and profit depreciation.

Class members who would have received an actual cash value payment if State Farm didn’t apply nonmaterial depreciation will recover 100% of the estimated nonmaterial depreciation that was not received as a payment plus 5.55% simple interest.

The deadline for exclusion and objection is Aug. 24, 2022. 

The final approval hearing for the State Farm settlement is scheduled for Sept. 23, 2022.

In order to receive a payment from the settlement, class members must submit a valid claim form by Oct. 24, 2022. 

Class members who suffered from multiple qualifying losses during the class period need to submit a separate claim form for each loss.

Who’s Eligible

The settlement includes all State Farm policyholders who made a structural damage claim for an Alabama property after a loss that occurred between March 8, 2011, and Aug. 3, 2017.

Potential Award

Varies

Proof of Purchase

No proof of purchase applicable

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

10/24/2022

Case Name

Arnold, et al. v. State Farm Fire and Cas. Co., Case No. 17-CV-148-TFM-C, in the U.S. District Court for the Southern District of Alabama

Final Hearing

09/23/2022

Settlement Website

Arnold-v-StateFarm.com

Claims Administrator

Arnold v. State Farm Settlement
c/o JND Legal Administration
PO Box 91431
Seattle, WA 98111
877-540-0864

Class Counsel

David Martin
THE MARTIN LAW GROUP, LLC

Erik D Peterson
MEHR FAIRBANKS & PETERSON TRIAL LAWYERS PLLC

T Joseph Snodgrass
LARSON ⦁ KING LLP

J Brandon McWherter
MCWHERTER SCOTT & BOBBITT PLC

Defense Counsel

Joseph A Cancila Jr
Jacob L Kahn
Allison Siebeneck
RILEY SAFER HOLMES & CANCILA LLP

James B Newman
Joseph P H Babington
HELMSING LEACH HERLONG NEWMAN & ROUSE