Welcome to the Business Journal Archives
Search for articles below, or continue to the all new BusinessJournalDaily.com now.
Search
State Farm to Pay $40 Million for Improper Titling Of Vehicles
"COLUMBUS, Ohio -- Ohio has joined a multi-state settlement with State Farm Mutual Automobile Insurance Co. that will provide $40 million in compensation to current owners of vehicles that have not been properly titled, according to Ohio Attorney General Jim Petro. "This settlement demonstrates how serious the consequences can be for improperly branding vehicle titles," said Petro. "I am pleased that State Farm has agreed to provide consumer restitution and comply with Ohio law."State Farm admits to improperly registering titles, in a small percentage of cases, after a vehicle incurred total-loss damage or was deemed unrecovered theft, Petro said. Ohio requires that automobiles receive branded titles such as "salvage," "damaged," and "flood-damaged" if they meet certain standards of damage or are deemed as an unrecovered theft.It is estimated that current vehicle owners will be eligible for a single lump-sum payment between $400 and $10,000, based on loss in the market value of the vehicle when the titles are recalled for proper branding, Petro said. The states believe most payments are likely to range from $800 to $1,850. State Farm officials speculate that an estimated 30,000 vehicle owners across the United States will be eligible for compensation. State Farm will be consulting with the Bureau of Motor Vehicles in researching the titles and locating current owners of vehicles with improperly branded titles, according to Jeffrey W. Jackson, vice president and counsel for State Farm.State Farm has agreed to change certain practices to prevent improper titling in the future. A total of 49 states and Washington, D.C., have signed the settlement agreement, Petro said.Once State Farm has identified all vehicles in Ohio with improperly branded titles, current owners of those vehicles will be contacted. Eligible owners will be receiving a claim form in the mail explaining the process and information on how to apply for a payment. The process could take about a year, with checks being paid later this year or by early 2006, Petro said.In addition, State Farm is making a payment of a total of $1 million to all the state participants for consumer education, future consumer litigation, public protection, local consumer aid funds, and attorney fees and costs, Petro noted."