Some New Mexico consumers will share in a $40 million settlement between states and State Farm Mutual Insurance Company.
State Farm failed to properly title some vehicles for salvage, Attorney General Patricia Madrid said.
“Recognizing its error, State Farm approached attorneys general to remedy the problem created for consumers nationwide,” Madrid said.
New Mexico law says a car should have a salvage title if the cost of repairing the vehicle for safe operation exceeds its fair market value or if the vehicle is declared a total loss by the insurer.
At least 95 vehicles in New Mexico were improperly titled, Madrid said. But title research is needed for another 400 vehicles.
“Those New Mexicans who have vehicles that should have a salvage title will be notified and given the option to request compensation for the settlement,” Madrid said.
An estimated 30,000 consumers nationwide may be eligible for payments from about $400 to $10,000 under the settlement.
“I hope this agreement will encourage other companies to step forward when necessary, take responsibility, improve practices and make things right for consumers,” Madrid said.
Also eligible are some 150 Idaho residents, said Brett DeLange, a consumer-protection lawyer at the Idaho Attorney General’s office.
Valid claims could result in individual payments from State Farm of up to $10,000, but the states involved in the settlement believe most payments will range from $800 to $1,850, according to a statement.
The Bloomgton, Illinois-based insurer said it will pay for expenses for identifying vehicles, tracing current owners and taking their claims. Owners of eligible vehicles will probably be contacted later this year and receive compensation by early 2006, Idaho Attorney General Lawrence Wasden said in a prepared statement.
State Farm also plans to make an additional payment of $1 million to the states for consumer education and to cover the costs of future consumer litigation.
“Our cooperative effort with the state attorneys general reflects a commitment to resolve salvage titling concerns,” said Jeffrey Jackson, State Farm’s attorney, calling the settlement “the right thing to do.”
Copyright 2004 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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