State Farm to pay $8.8M to Washington policyholders for diminished value claims

State Farm class action settlement overview:

• Who: State Farm Mutual Automobile Insurance Co. and plaintiffs Tyler Hardy and Jermine Santiago have reached a settlement agreement.
• Why: State Farm agreed to settle claims it failed to pay diminished value on vehicles involved in accidents.
• Where: The State Farm settlement was filed in Washington federal court.

State Farm Mutual Automobile Insurance has agreed to pay $8.8 million to resolve claims it failed to pay diminished value on vehicles involved in accidents.

Plaintiffs Tyler Hardy and Jermine Santiago filed a class action lawsuit against State Farm Mutual Automobile Insurance in January 2025, alleging the insurer failed to pay diminished value on vehicles involved in accidents.

Under the terms of the class action settlement, State Farm will pay $8.8 million to resolve the diminished value class action lawsuit. 

The settlement will benefit insureds with Washington policies issued in Washington state between Jan. 13, 2019, and the date of preliminary approval of the settlement where the insured’s vehicle damages were covered under the policy’s underinsured/uninsured motorist coverage.

The class includes insureds whose vehicle repair estimates totaled at least $1,000 where the vehicle was no more than six years old and had less than 90,000 miles on it at the time of the accident and the vehicle suffered structural (frame) damage and/or deformed sheet metal and/or required body or paint work.

State Farm diminished value settlement provides $800 per claim

The State Farm diminished value settlement provides up to $800 per claim. State Farm will receive a dollar-for-dollar credit for any prior payments for diminished value, the motion for settlement class certification and preliminary approval says.

Class members who do not opt out of the settlement class and who submit a timely valid claim form will receive a pro-rata share based on the cost to repair their damaged vehicles.

The payment formula and claims process are identical to those approved in more than 20 Washington diminished value cases since being approved in Moeller v. Farmers, the motion says.

Under the formula, those with more costly repairs will receive higher diminished value payments to account for their more extensive damage and higher diminished value.

State Farm may reduce settlement payments by the amount of any diminished value compensation previously paid on otherwise valid claims.

Class members whose vehicles had prior accidents will receive half of the amount they would otherwise be eligible to recover.

Similar settlements have been reached with State Farm, including a recent settlement granted preliminary approval for Arkansas policyholders worth more than $15 million.

What do you think of the terms of this State Farm settlement? Tell us in the comments.

The plaintiffs are represented by Stephen M. Hansen of the Law Offices of Stephen M. Hansen P.S. and Scott P. Nealey of the Law Office of Scott P. Nealey.

The State Farm class action lawsuit is Hardy, et al. v. State Farm Mutual Automobile Insurance Co., Case No. 2:25-cv-00072-RSM, in the U.S. District Court for the Western District of Washington.

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