State Farm Hit with Class Action Over Allegedly ‘Arbitrary’ Deductions to Total Loss Claims

[1srelluc]

The lawsuit explains that State Farm and other auto insurance companies typically use third-party vendors to help determine the actual cash value (ACV) of vehicles that are determined to be a total loss—i.e., when repair of the vehicle is impossible or uneconomical. Per the case, State Farm uses third-party vendor Audatex or AudaExplore who use a system to identify the selling prices of comparable vehicles in the relevant market to determine a totaled car’s ACV.

The suit alleges, however, that State Farm has attempted to avoid its contractual obligation to pay insureds for the full ACV of totaled vehicles by instructing its valuation vendor to apply what it calls a “typical negotiation adjustment” to the selling prices of comparable vehicles. According to the case, the defendant represents that this “arbitrary and unsupportable” four- to 11-percent reduction of comparable vehicles’ values represents “some sort of average difference between a dealer list price and ‘what the dealer would be willing’ to sell [the vehicle] for.”

State Farm Hit with Class Action Over Allegedly ‘Arbitrary’ Deductions to Total Loss Claims

Good, we when through that on a wrecked car (They had undervalued it by 5K) and threatened to report them to the Virginia State Corporation Commission who usually takes a very dim view of shady practices.....They soon changed their tune.

 

[Dekster]

State Farm isn't the worst company to have to deal with. That honor would be GEICO, and Nationwide a close second.

 

[Hang on Sloopy]

The lawsuit explains that State Farm and other auto insurance companies typically use third-party vendors to help determine the actual cash value (ACV) of vehicles that are determined to be a total loss—i.e., when repair of the vehicle is impossible or uneconomical. Per the case, State Farm uses third-party vendor Audatex or AudaExplore who use a system to identify the selling prices of comparable vehicles in the relevant market to determine a totaled car’s ACV.

The suit alleges, however, that State Farm has attempted to avoid its contractual obligation to pay insureds for the full ACV of totaled vehicles by instructing its valuation vendor to apply what it calls a “typical negotiation adjustment” to the selling prices of comparable vehicles. According to the case, the defendant represents that this “arbitrary and unsupportable” four- to 11-percent reduction of comparable vehicles’ values represents “some sort of average difference between a dealer list price and ‘what the dealer would be willing’ to sell [the vehicle] for.”

State Farm Hit with Class Action Over Allegedly ‘Arbitrary’ Deductions to Total Loss Claims

Good, we when through that on a wrecked car (They had undervalued it by 5K) and threatened to report them to the Virginia State Corporation Commission who usually takes a very dim view of shady practices.....They soon changed their tune.

People always think their pile o shit is worth more. This has nothing to do with you, just people

When a car is totaled the adjuster will research all comparable sales within a range of 75-100 miles. Then make all the adjustments up to the trim. Mileage is so KEY on this. 140k miles versus 75k is about 3-5k more or less.

Cars under a 12,000 yr average get the highest

That is how it works. I think some use, "Trade in Value" Rather than "Private sale" value, which is usually 3 k more because the dealer has to make a profit. Average dealer profit on used cars is 3k

Then the insurance company sells the wreck for about 10% of value

Been licensed P/C for decades

NEVER accept the first offer. Politely cry and whine to the adjuster that this amount won't cut it for another car. Be very polite to the adjuster and sob story it and that gives you at least 500 more

Never be a prick to the adjuster. They have the pen and check, not the insurance company per sey

 

[lg325]

I have State Farm and the time my truck got totaled once was all done they just made out a check for the value of my truck.
They took care of me from start to finish with no problems. I have total coverage.

 

[DudleySmith]

Insurance companies are in the business of taking premiums from people and gambling in the markets with it, not paying claims.