State Farm class action claims insurer undervalues vehicles involved in total loss claims

State Farm class action lawsuit overview: 

• Who: James Goode filed a class action lawsuit against State Farm Mutual Insurance Co. 
• Why: Goode claims State Farm violates Alabama law by artificially reducing the retail cost of comparable vehicles used in the calculation of total loss claim payments.
• Where: The class action lawsuit was filed in Alabama federal court.

A new class action lawsuit alleges State Farm artificially reduces the retail cost of comparable vehicles used in the calculation of total loss claim payments in violation of Alabama law.

Plaintiff James Goode claims State Farm, instead of using the retail cost of comparable vehicles, uses a total loss valuation methodology which “systematically reduces” the retail cost of comparable vehicles.

Goode argues State Farm uses software designed and licensed by CCC Information Services IC.  to manipulate data to underpay total loss claims. 

“When valuing vehicle total loss claims, it is improper for insurance companies to undervalue and underpay the claims by manipulating the data used to value the vehicles,” the State Farm class action says. 

Goode wants to represent a class of all persons, businesses and entities insured by State Farm Mutual Automobile Insurance Company on an automobile policy issued in the State of Alabama who received compensation on a claim for the total loss of their vehicles from the Defendant based on a total loss valuation generated using a CCC One Market Valuation Report, wherein the retail cost of comparable vehicles was reduced. 

State Farm fails to follow Alabama law, class action claims

According to the State Farm class action, Under State Farm’s uniform auto insurance policy terms, once a customer’s vehicle is declared a total loss, the insurer is required to pay the customer the pre-accident cash value.

Goode argues State Farm fails to abide by the Alabama law which states that the actual cash value of total loss vehicles is determined by using the retail cost of comparable vehicles. 

“State Farm’s systematic practice of reducing the retail cost of comparable vehicles in the calculation of vehicle total loss payments does not comply with industry standards in Alabama,” the State Farm class action says.  State Farm is facing similar class action allegations in the State of North Carolina.

Goode claims State Farm is guilty of breach of contract. He demands a jury trial and requests an award of compensatory damages for himself and all class members.

If your total loss insurance claim was lower than expected, you may be eligible to pursue additional compensation by joining a total loss car insurance lawsuit investigation. 

Have you made a total loss claim to State Farm with the retail vehicle cost reduced to a pre-accident value? Let us know in the comments.

The plaintiff is represented by Aaron C. Hemmings and Kelly A. Stevens of Hemmings & Stevens, P.L.L.C., and Jay Aughtman of Aughtman Law Firm, LLC. 

The State Farm class action lawsuit is Goode, et al. v. State Farm Mutual Insurance Co., Case No. 5:25-cv-02102, in the U.S. District Court for the Northern District of Alabama.

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