State Farm has agreed to pay nearly $1.5 million to a class of Washington state policyholders who allegedly weren’t paid for the diminished value of their vehicles following at least $1,000 in damage.

A class action lawsuit was filed in 2018 by Anousack Sanith who was rear-ended in a hit-and-run collision in 2017, according to the complaint.

In addition to what State Farm will pay the class, it will also pay attorney’s fees of $627,360 plus $13,000 for “costs” and a $10,000 service award to Sanith, according to the final settlement agreement.

The vehicle was a 2017 Toyota Tacoma SR5, which had 8,278 miles at the time of the accident but State Farm didn’t pay Sanith for the diminished value of his vehicle even though damages were extensive, adding up to more than $17,700. Repairs of the vehicle included frame/unibody repairs, body work, and painting, according to the complaint.

The class, at the time the lawsuit was filed, included 830 State Farm policyholders in the state of Washington who filed a underinsured motorist (UIM) claim for vehicle damages, and:

• • “The repair estimates on the vehicle (including any supplements) totaled at least $1,000;
  • “The vehicle was no more than six years old (model year plus five years) 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.”

“These policies, identical to the policy sold to Plaintiff, offered to pay for legally recoverable losses and damage to insured vehicles under the UIM PD Coverage,” the suit states. “The policies promise as follows: ‘We will pay compensatory damages for property damage an insured is legally entitled to recover from the owner or driver of an underinsured motor vehicle.’

“There is no exclusionary or limiting language limiting the coverage obligation listed above… It is long established that the compensatory damages one can recover from an at-fault driver in this state includes what the law refers to as ‘diminished value.'”

The complaint notes that, according to WPI 30.12, “compensatory damages” are “the reasonable value of necessary repairs to any property that was damaged plus the difference between the fair cash market value of the property immediately before the occurrence and its fair cash market value after it is repaired.”

Like others in the proposed class, Sanith’s claim was classified and adjusted by State Farm under UIM property damage (UIM PD) coverage and he was charged the UIM PD deductible on his claim.

“As it does on every case with UIM PD exposure, State Farm F&C conducted an investigation, determining that the other party was at fault and that the at-fault party was uninsured (or could not be identified), triggering UIM PD coverage,” the complaint states.

“As a result of the damage it sustained in the accident, plaintiff’s vehicle was worth less after it was repaired than it was before the accident. Since the areas of and the fact of repaired damage are detectable, knowledgeable buyers know that after the accident the vehicle lacks the attributes of an undamaged vehicle, and the vehicle is worth less (it has “diminished value”) as a result of the accident…”

Sanith requested that his truck be declared a total loss “due to the severity of damage compared to the vehicle’s pre-loss value,” the complaint says.

“In a telephone conversation, a representative of State Farm F&C told plaintiff that he could present a claim for the resulting loss in value once his vehicle had been repaired,” the suit states.

Sanith then hired an appraiser and licensed public adjuster to appraise his truck for a loss in value claim, which State Farm denied.

A letter from State Farm to Sanith, according to the complaint, states, “We believe that the documentation which has been provided to date does not substantiate that the value of your vehicle has been reduced due to the damage sustained from the auto accident… The repairs paid were performed according to professional repair specifications. There is no evidence the repair work was below repair industry standards.”

Sanith was told to contact the shop that completed the repairs if he had an issue with them, the complaint states.

An order preliminarily approving the settlement agreement was given on May 10, 2024. The final approval order was filed Sept. 27.

“The complaint filed in this action alleges generally that, in breach of the policies, defendant improperly failed to pay the plaintiff and settlement class members… for diminished value with respect to uninsured and underinsured motorist property damage coverage claims,” wrote Judge Bryan Chushcoff, in the final approval order. “Defendant denies liability and maintains that it paid the full and appropriate amounts owed, as part of its regular claim-handling process.”

As a result of the agreed-upon settlement, the action was dismissed with prejudice and without leave to amend.

Those who properly submit claim forms by Nov. 12 will be included in the class, according to a class member notice.

Images

Featured image credit: sshepard/iStock

Anousack Sanith’s 2017 Toyota Tacoma SR5 following a rear-end hit-and-run collision in 2017. (Photo provided in lawsuit complaint document)