DENVER - Colorado Interim Attorney General John W. Suthers announced today that his office has joined 48 other states in a $40 million settlement with State Farm Mutual Automobile Insurance Company. The settlement came after an internal audit by State Farm revealed that it may have failed to properly re-title thousands of total-loss vehicles subsequently resold by State Farm. The settlement covers cars, motorcycles, motor homes and semi-trailers. It does not cover trailers, ATV’s, snowmobiles, or any watercraft.
“I commend State Farm for taking the initiative to correct a problem that may affect tens of thousands of consumers across the country,” said Interim Attorney General Suthers. “We won’t know the extent of this problem in Colorado,” added Suthers, “until State Farm has completed its review of state motor vehicle records.” Attorney General Suthers concluded, “"I encourage other insurance companies to review their titling practices to ensure full compliance with this important consumer protection provision of state law."
Colorado law requires vehicle titles to be branded as “salvage” when a damaged vehicle is less than six years old and the cost of repairing it to a roadworthy condition exceeds the vehicle’s retail fair value. A “salvage” designation on a vehicle’s title alerts consumers to any significant damage history with that vehicle.
State Farm has 180 days to identify vehicles it has acquired since June 1, 1997 that may not have been properly re-titled as salvage vehicles. State Farm will pay all costs for this title review. State Farm must then contact the current owner of any vehicles with “unresolved” titles. Those consumers will be given specific information about making a formal claim against the $40 million settlement fund. The amount of individual recoveries will depend on the current average retail value of each vehicle and the total of all eligible claims received by State Farm.
Consumers are advised not to file claims with State Farm or with the Attorney General at this time. Further information about this settlement, including a copy of the Assurance of Voluntary Compliance, will be posted on the Attorney General’s web site: www.ago.state.co.us.