At issue is the method State Farm Auto Insurance used to determine how much to pay on claims for totaled vehicles. State Farm allegedly did not do proper research to determine the asking price or actual price of similar vehicles in the region. This violates California insurance law and likely resulted in people receiving less money than they deserved for their totaled vehicles. Californians who received a total loss settlement after May 2007 could have been affected by State Farm's illegal tactics.
Customers with a totaled vehicle claim can do a few things to protect themselves before they settle with their insurance company. They can get an independent appraisal for the value of their vehicle. Doing so would help to indicate whether or not the amount offered by the insurance company is reasonable. They can also ask around to determine the average asking price of similar vehicles in their local area to get an idea of what their vehicle was worth pre-accident.
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People who purchase car insurance in good faith have the right to receive the actual value for their car if it is totaled in an accident. They should not have to worry about whether or not their insurance company is giving them fair value for their vehicle.