COLUMBUS - The settlement of a class-action lawsuit against State Farm Mutual Automobile Insurance Co. involving diminished value of wrecked vehicles has been approved by a Superior Court judge. <br>
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Judge Doug Pullen signed off on the settlement, which could cost State Farm $340 million, after two days of hearings that lasted into Wednesday night. <br>
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Left unsettled is how $50 million in plaintiffs attorneys' fees will be distributed by State Farm. <br>
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Policyholders filed the suit against the Bloomington, Ill.-based company two years ago, saying they should be compensated not only for repairs but for the difference in value compared to a car's worth before it was wrecked. <br>
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State Farm, Georgia's largest automobile insurer with more than 700,000 policyholders, fought the issue until the Georgia Supreme Court twice upheld Pullen's ruling that state law requires insurers to make their policyholders whole. <br>
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The settlement will cost State Farm about $100 million for diminished value payments to policyholders for losses between Dec. 22, 1993, and Nov. 30, 2001. Policyholders suffering total loss claims, or glass repair, are not eligible for payment. <br>
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State Farm also must make similar diminished value adjustments for six more years. Mike Daniels, a Columbus State University professor of economics, estimated that could cost the company up to $194 million.
