State Farm Rate on Total Loss Cars is Arbitrary, Says Class Action Lawsuit
According to a new class action lawsuit, State Farm allegedly underrates total loss cars to minimize the amount of money it has to pay to owners who file total loss claims.
Maria Munoz, et al. v. State Farm Mutual Automobile Insurance Company
According to the plaintiffs, Maria Munoz and Sandra Smiling, State Farm bypasses its contractual obligation to compensate policyholders for the cash value of their cars in the event of a total loss by imposing an arbitrary flat rate modification.
Munoz and Smiling seek to represent a nationwide class of people and a subclass in Illinois and North Carolina who are State Farm policyholders and get a typical negotiating adjustment on a total loss car claim.
In addition to the class suit, the insurance company determines the value of a car following a total loss claim by comparing it to the prices of comparable automobiles in the relevant marketplace.
State Farm Provided No Explanation Towards Value Deduction
However, plaintiffs argue that State Farm encourages its third-party vendors to impose an arbitrary and irrational flat-rate adjustment towards the value of each comparable car, dubbed a “typical negotiation adjustment.”
Munoz claims State Farm deducted 4% from her 2020 Ford Escape after she filed a total loss claim on the car.
Meanwhile, Smiling claims that State Farm made a “typical negotiation adjustment” of approximately 6% to 8% to her 2014 Nissan Altima.
Smiling and Munoz assert that State Farm did not attempt to explain the modification or the rationale for the value deduction.
To evade full payment under its policies, the defendant developed a blatant and fraudulent method to decrease its total-loss payouts to policyholders through the use of a false, arbitrary, and unsupported “typical negotiation adjustment,” the class action lawsuit alleges.
In their State Farm Total Loss Arbitrary Class Action Lawsuit, Munoz and Smiling claim that State Farm is in violation of the Illinois Consumer Fraud and Deceptive Business Practices Practices Act as well as the North Carolina Unfair Trade Practices Act for breach of contract, breach of the covenant of good faith, and fair dealing, as well as unjust enrichment.
The plaintiffs demand a jury trial and request actual damages, compensatory damages, statutory damages, and punitive damages. The duo also seeks restitution on behalf of themselves and other Class Members.
Editor’s Note on State Farm Total Loss Arbitrary Class Action Lawsuit:
This article is written to inform you of the class action lawsuit filed against State Farm over allegedly minimizing the amount of money it pays to Total Loss Car insurance holders. You might also be intersted in Farmers Insurance Exchange Car Premiums Lawsuit.
Case Name & No.: Maria Munoz, et al. v. State Farm Mutual Automobile Insurance Company, Case No. 1:21-cv-05211
Jurisdiction: US District Court for the Northern District of Illinois
Products/Services: Total Loss Insurance
Allegations: State Farm allegedly bases its payment to policyholders arbitrarily
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