NC consumers who may have purchased salvaged cars to share in national settlement
Raleigh: Consumers who may have unknowingly bought damaged vehicles because State Farm Insurance failed to issue proper titles for the cars will get money back as part of a national settlement, said Attorney General Roy Cooper said today.
“This company stepped up once they recognized the problem and offered to make things right for consumers,” said Cooper. “I hope consumers will take advantage of this opportunity to get some money back, and that more companies will be forthcoming like this.”
Cooper joined attorneys general from 48 other states plus the District of Columbia to reach an agreement with State Farm Mutual Insurance Company, which will result in $40 million in refunds to thousands of car, SUV, and truck owners nationwide.
An estimated 30,000 consumers nationwide may be eligible for payments ranging from $400 up to more than $10,000, depending on the current average value of their vehicle and the number of consumers who participate. Most consumers’ payments are likely to range from $800 to $1850. North Carolina consumers are expected to receive a proportionate share of the national settlement
The agreement is the result of an internal review by State Farm that uncovered that the company did not properly title some vehicles as salvaged or damaged before selling them to consumers. In most states including North Carolina, depending on factors such as vehicle age and extent of damage, insurance companies taking ownership of damaged or stolen vehicles from policyholders must obtain “branded titles” that declare that the vehicles are “salvaged” or “damaged.” State Farm’s records showed that some vehicles it resold may not have been properly titled.
State Farm will identify the impacted vehicles and their current owners. Owners will then receive a letter from Cooper by fall of 2005 with instructions on how to claim their refund. Consumers who complete a claim form and are approved will receive payment from State Farm later this year or in early 2006.
Payments will be made to the owners of currently-registered vehicles and will be based on the current average retail value of the vehicle. For example, owners of vehicles worth between $1,000 and $2,000 will receive $600; owners of vehicles worth between $5,000 and $6000 will receive $1400; owners of vehicles worth between $10,000 and $11,000 will receive $3000.
State Farm has also agreed to comply with all state laws regarding the titling of salvage motor vehicles and will pay a total of $1 million to all the state participants for consumer education efforts.