State Farm class action settlement overview:
- Who: A federal judge has granted preliminary approval to a class action settlement between State Farm and a class of policyholders.
- Why: State Farm agreed to the settlement to resolve claims it underpaid policyholders for total loss vehicle claims.
- Where: The State Farm class action settlement was filed in Arkansas federal court.
A federal judge has granted preliminary approval to a class action settlement resolving claims State Farm underpaid policyholders for total loss vehicle claims.
Plaintiff Rose Chadwick filed the class action lawsuit against State Farm in November 2021, alleging the insurance company underpaid policyholders who filed claims for total loss vehicles.
The plaintiff claimed State Farm systematically underpaid insureds for total loss claims, in breach of its insurance contracts and the implied covenant of good faith and fair dealing. Chadwick alleges the company did so by basing compensation on valuation reports that applied “typical negotiation adjustments” (TNA), which, she contends, are improper.
State Farm denies the allegations but agreed to settle the total loss claims class action lawsuit to avoid the burden, expense and uncertainty of ongoing litigation.
State Farm settlement provides $15.5M for total loss claims
Under the terms of the State Farm settlement class action, the insurance company will pay $15,583,700 to resolve the claims.
Class members are eligible for a payment of 68% of estimated TNA amount, as determined from State Farm’s records. The estimated average recovery is about $489 per claim.
Class counsel will seek attorneys’ fees of up to 30% of the settlement fund, or $4,675,110. They will also request reimbursement of $850,000 in litigation costs and a $15,000 service award for Chadwick as the class representative.
These payments will not reduce the amount of money available to settlement class members as they will be paid separately by State Farm.
The State Farm class action settlement includes all persons who made a first-party claim on a policy issued to an Arkansas resident between Nov. 29, 2016, and Oct. 18, 2021. Eligible participants must have had their vehicle declared a total loss with a payout based on an Audatex report that applied a typical negotiation adjustment to at least one comparable vehicle.
The deadline to opt out of the State Farm class action settlement is June 25, and the deadline to object is June 15. The final approval hearing is scheduled for July 15.
Although the settlement is still to be approved, the proposed deadline for submitting a claim is Aug. 19, 2026.
Another class action lawsuit over total loss claims was filed against State Farm late last year in North Carolina federal court.
What do you think about the State Farm total loss claims class action settlement? Tell us your thoughts in the comments.
The plaintiff is represented by Carney Bates & Pulliam PLLC, Normand PLLC, Jacobson Phillips PLLC and Bailey Glasser LLP.
The State Farm class action lawsuit is Chadwick v. State Farm Mutual Automobile Insurance Co., Case No. 4:21-cv-01161, in the U.S. District Court for the Eastern District of Arkansas.
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