State Farm Sued Over Vehicle Valuation Method

Law360, New York (October 3, 2012, 7:06 PM EDT) -- State Farm Mutual Automobile Insurance Co. was hit with a putative class action Tuesday alleging the insurer routinely shortchanges claimants on the diminished value of their vehicles by using a deceptive and unfair methodology.

A trio of Georgia consumers claim that State Farm's so-called 17c methodology for calculating an automobile's diminution of value following a collision dramatically underestimates the actual loss of value and results in underpayments estimated in amounts exceeding $1,000 per claim.

"This methodology is inherently unfair, grossly undervalues the amount of any diminished value sustained by a motor vehicle that has been damaged in a collision, and is...

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