Jury Awards $17 Million Against American Family in Aftermarket Parts Lawsuit in Mo.

March 12, 2007

American Family Mutual Insurance Co. was ordered to pay $17 million as part of a class-action lawsuit over aftermarket vehicle parts in Missouri.

Following a 3 1/2-week trial, a Jackson County jury determined American Family wrongly paid auto damage claims based on the use of non-original replacement parts.

The verdict covers 315,000 Missouri customers who filed claims between May 1990 and December 2004, said Ted Pintar, one of the plaintiffs' attorneys.

"Plaintiffs think this is a resounding victory for insurance customers throughout Missouri,'' Pintar said in a telephone interview. "It sends a clear statement to insurance companies who continue to force inferior aftermarket parts on insureds as part of their claims practices.''

Pintar said it was too soon to say how much class members would receive and how much of the award will go to attorneys' fees.

Ken Muth, a spokesman for Madison, Wis.-based American Family, said the company will appeal.

"We don't believe it's warranted by the laws of Missouri or the facts for that matter,'' he said. "We believe it hurts our customers because they would feel the impact of higher auto repair costs if the verdict is allowed to stand.''

The case was filed in 2000 and certified as a national class action in 2001. But the Missouri Supreme Court in 2003 ruled that it could apply only to Missouri customers because other states differed in how they regulate insurance company's use of aftermarket parts.