$1.95M Loya Insurance UIM Offset Class Action Lawsuit Settlement, How It Reduces Your Settlement Payout in 2026
A $1.95 million settlement involving Loya Insurance and its affiliate, Young America Insurance Company (YAIC), is addressing a controversial practice known as a UIM benefit offset. As of January 2026, many policyholders are discovering that their insurance benefits were historically reduced or denied because of these offsets. If you held a policy in New Mexico and filed an underinsured motorist (UIM) claim, your payout may have been smaller than expected—or blocked entirely.
This guide clarifies how this offset works, who is affected, and what steps you must take by the March 2026 deadline to seek a readjustment of your payment.
What is a UIM Benefit Offset?
In plain English, an offset is a reduction in the amount an insurance company pays you, based on money you received from someone else. Specifically, a UIM benefit offset occurs when your own insurance company (Loya/Young America) subtracts the at-fault driver’s liability limits from your own UIM coverage limits.
For example, if you have $25,000 in UIM coverage and the driver who hit you also has $25,000 in liability insurance, Loya might “offset” your benefit by the other driver’s $25,000. Under this math ($25,000 – $25,000 = $0), Loya would pay you nothing, even if your medical bills were much higher. This practice was the heart of the class action lawsuit, with plaintiffs arguing it made the coverage they paid for “illusory” or worthless.
Why Loya Insurance is Paying $1.95 Million
The class action lawsuits against Loya Insurance and Young America alleged that the companies failed to properly disclose how these offsets worked. Under New Mexico law—specifically following the landmark Crutcher v. Liberty Mutual decision—insurers are now required to explain that “minimum limits” UIM coverage may provide no actual benefit if the other driver is also carrying minimum limits.
Loya and YAIC have not admitted wrongdoing but agreed to the $1.95 million settlement to resolve these claims. The settlement is designed to do two things:
- Readjust Claims: Pay back money to those whose UIM benefits were unfairly reduced.
- Refund Premiums: Return a portion of the insurance premiums paid by people who bought this “illusory” coverage but never filed a claim.
Who is Affected by the $1.95M Offset Settlement?
You are likely a class member if you meet the following criteria as of January 2026:
- You were a policyholder with Young America Insurance (YAIC) or Loya Insurance in New Mexico.
- Your policy was active between October 1, 2010, and February 28, 2022.
- You purchased UM/UIM coverage during that window.
Specifically for the Payout Readjustment: You must have filed a UIM claim that was reduced or denied because Loya applied an offset based on the third-party’s insurance limits.
How the Offset Calculation Works
The settlement establishes a process to “undo” the offset for eligible claimants. Instead of receiving $0 because the other driver had insurance, the settlement administrator will review your original claim.
If your total damages (medical bills, lost wages, etc.) exceeded the amount paid by the at-fault driver’s insurance, you may now be eligible to receive the UIM benefits that were previously withheld, up to the limits of your policy. The total fund for these readjustments is capped at $800,000, meaning if many people apply, individual payouts may be prorated.
Is the Offset Mandatory or Challengeable?
In the context of this settlement, the offset is being corrected, not applied. However, the process is not automatic for everyone.
- Automatic Premium Refunds: If you only paid premiums but never had a claim, you may receive a small refund automatically.
- Mandatory Claim Form for Readjustments: If your benefit was actually reduced by an offset, you must file a claim form to challenge that reduction and get your money back.
What You Must Know: 2026 Updates and Deadlines
The timeline for this settlement is critical. If you do not act, you may lose your right to any portion of the $1.95 million fund.
- Final Claim Deadline: You must submit your valid claim form by March 12, 2026 [INSERT OFFICIAL SOURCE LINK].
- Objection/Exclusion Deadline: The date to opt-out or object to the settlement terms passed on January 26, 2026.
- Documentation Required: To prove your UIM coverage and the applied offset, you should gather your original policy declarations page and any denial letters or payment explanations (EOBs) sent by Loya or Young America at the time of your accident.
Common Misconceptions About UIM Offsets
Many drivers believe that UIM coverage is “extra” money on top of what the at-fault driver pays. While that is how “excess” theory works in some states, Loya operated under “gap” theory, where the offset effectively canceled out the benefit. This settlement is a direct remedy for the confusion caused by that policy language.
What to Do Next
- Verify Your Coverage: Look at your old Loya or Young America insurance cards or policies from the 2010–2022 period.
- Locate Your Accident Records: If you had an accident and Loya paid less than your policy limit, find the letter explaining why. If it mentions an “offset” or “deduction of liability limits,” you are a prime candidate for a payout.
- File Your Claim: Visit the official settlement website at LoyaUIMSettlement.com and complete the form before the March 12, 2026 cutoff.
- Contact the Administrator: If you are unsure if you are affected, call the settlement administrator at the number provided on the official site to check your name against the class list.
FAQs About the Loya UIM Offset
What exactly is a “UIM benefit offset”?
It is a practice where an insurance company reduces your payout by the amount of the at-fault driver’s insurance coverage. In many cases, this leaves the victim with $0 in UIM benefits.
How much will my settlement payout be reduced?
In this class action, the goal is actually to reverse previous reductions. If you file a successful claim, your payout could increase by the amount that was originally offset.
Who is the claims administrator for the Loya settlement?
The settlement is being managed through the official portal at LoyaUIMSettlement.com.
What documentation do I need to prove UIM coverage?
You generally need your policy number, the date of your accident, and any correspondence from Loya showing your UIM claim was denied or reduced due to a third-party offset.
How long do disputes take to resolve?
Once the final approval hearing occurs on March 24, 2026, claims will be processed. Most participants can expect a resolution and payment in the second half of 2026.
Last Updated: January 30, 2026
Disclaimer: This article is for informational purposes only and does not constitute legal advice. For questions regarding your specific insurance policy or claim, please consult with a licensed attorney.
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About the Author
Sarah Klein, JD, is a licensed attorney and legal content strategist with over 12 years of experience across civil, criminal, family, and regulatory law. At All About Lawyer, she covers a wide range of legal topics — from high-profile lawsuits and courtroom stories to state traffic laws and everyday legal questions — all with a focus on accuracy, clarity, and public understanding.
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