State Farm agrees to pay $250M for lost value of wrecked cars

ATLANTA - State Farm Mutual Automobile Insurance Co. has agreed to a $250 million settlement in which it must pay as many as 700,000 Georgia motorists for the lost value of cars damaged in collisions. <br> <br> The settlement of a class-action lawsuit announced Friday calls for State Farm to pay $100 million in diminished value reimbursements for accident claims filed since Dec. 22, 1993. <br> <br> The company also agreed to pay all future claims in Georgia, which both sides in the lawsuit say will reach another $100 million over the next six years. <br> <br> Another $50 million will be paid for court costs and attorneys&#39; fees. <br> <br> Eligible policyholders will receive at least $25 and up to several thousand dollars, depending on the amount of the original claims. <br> <br> The settlement ends a lawsuit filed in Columbus two years ago in which policyholders contended their vehicles were worth less after a wreck no matter how well they were repaired. <br> <br> State Farm, based in Bloomington, Ill., responded that properly repaired cars did not diminish in value. <br> <br> In November, the Georgia Supreme Court upheld a decision by the Columbus trial judge who certified a class-action lawsuit in the case. <br> <br> The high court upheld Superior Court Judge Doug Pullen&#39;s order that the insurer must begin compiling information needed to begin reimbursing clients for the diminished value in addition to payments it had made for repairs. <br> <br> Neal Pope, the Columbus lawyer who filed the original lawsuit, said the sudden settlement surprised him. <br> <br> ``We are happy because, as you can see, the settlement is massive and includes everyone,&#39;&#39; said Pope, who will share in the $50 million of expenses and fees. <br> <br> State Farm and the plaintiffs, in a joint statement, said the settlement served the interests of company policyholders by avoiding the risks of further litigation. <br> <br> After the Supreme Court ruling, Insurance Commissioner John Oxendine said all insurance companies operating in Georgia must obey the ruling. <br> <br> ``We view the Supreme Court decision to be the law of the state of Georgia, and it applies to all insurance companies,&#39;&#39; Oxendine said.