$15.6M State Farm Class Action Lawsuit, Their Total Loss Settlement, Did They Shortchange Your Car Payout?

State Farm agreed to a $15.6 million settlement after a federal jury found the insurer used software to systematically underpay total loss car claims for approximately 37,000 Arkansas policyholders. A court granted preliminary approval on March 27, 2026. No claim form is available yet. Additional lawsuits remain active in Kansas, Illinois, North Carolina, Alabama, and California — meaning millions more policyholders across the country may have grounds to act.

Quick Facts

Field	Detail
Settlement Amount	$15,600,000 (Arkansas case)
Claim Deadline	TBD — not announced yet
Who Qualifies	Arkansas State Farm policyholders with total loss claims, Nov. 29, 2016 – Mar. 18, 2024, valued using Audatex software
Payout Per Person	Estimated several hundred dollars (varies by individual underpayment)
Proof Required	TBD
Settlement Status	Preliminary approval granted March 27, 2026
Administrator	TBD — official site is statefarmartotallosslitigation.com
Official Website	statefarmartotallosslitigation.com

Where Things Stand Right Now

• A federal jury ruled in favor of approximately 37,000 Arkansas plaintiffs in June 2025, finding State Farm violated its contractual obligation to pay actual cash value. The $15.6 million settlement received preliminary approval on March 27, 2026, but no claim form exists yet and no claim deadline has been announced.
  
• A separate nationwide class action in Illinois — where plaintiffs allege State Farm paid out 4–11% less than owed by applying a “typical negotiation adjustment” to used vehicle valuations — is moving forward, though courts have already dismissed claims in two states.
  
• In Kansas, a class was certified covering policyholders from December 6, 2017 through April 30, 2025 who received total loss payments based on Audatex valuation reports. That case is still in active litigation with no settlement yet.

What Is the State Farm Total Loss Lawsuit About?

When your car gets totaled, your insurer owes you the vehicle’s actual cash value — what the car was worth the day before the accident. State Farm calculates that value using third-party software that finds comparable cars for sale nearby, then prices your car based on what those vehicles sell for.

Multiple lawsuits allege State Farm did not stop there. After finding comparable vehicles, the insurer applied what it called a “typical negotiation adjustment” — a flat-rate deduction of 4% to 11% off the comparable vehicles’ prices. Plaintiffs argue this adjustment had no basis in real-world negotiations and was designed solely to reduce total loss payouts.

An Arkansas federal jury agreed in June 2025, finding that the software systematically undervalued total-loss cars for tens of thousands of drivers. The jury determined the lead plaintiff had been underpaid by about $600 for a vehicle worth $4,700. State Farm no longer uses the same software to calculate these values.

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The lawsuits also contend that State Farm relied on opaque vendor software generating comparable vehicle data, then imposed further internal reductions before issuing settlement offers to policyholders.

Who Is Eligible to File a Claim?

For the Arkansas $15.6M Settlement (Chadwick v. State Farm):

• You may qualify if you were an Arkansas resident and State Farm policyholder who made a claim for physical damage to a motor vehicle between November 29, 2016 and March 18, 2024.
• You may qualify if State Farm compensated you for the total loss of your vehicle during that period.
• You may qualify if State Farm based your payout on a valuation report prepared by Audatex North America that included a “typical negotiation adjustment.”
• You may not qualify if your valuation report did not include that specific adjustment — but because State Farm’s data does not always track this, you may still receive a notice even if you ultimately fall outside the class.

For the Kansas Litigation (Gulick v. State Farm — no settlement yet):

• You may qualify if you were a Kansas resident and State Farm policyholder who made a claim for physical damage to a motor vehicle between December 6, 2017 and April 30, 2025, received compensation for a total loss, and State Farm based that compensation on a valuation report prepared by Audatex North America.

For Other States:

Attorneys are pursuing similar cases against State Farm in at least 19 states while regulators in some states weigh whether insurers must change how they value total loss cars. If you live outside Arkansas or Kansas, your state may have an active case. Check the State Farm lawsuits active case tracker on AllAboutLawyer.com to find the case closest to you.

How Much Can You Receive?

The Arkansas settlement fund totals $15,600,000, covering approximately 37,000 class members. Estimated payouts come to several hundred dollars per person, though the exact amount varies based on each individual’s underpayment.

Individual payouts will depend on three things: how much State Farm reduced your specific valuation, how many class members submit valid claims, and how much the court deducts for attorneys’ fees and administration costs before distributing the remaining fund.

In the North Carolina case, the suit alleges State Farm reduced total loss payouts by 4–9% per claimant. In the lead plaintiff’s situation, the reduction came to 5.5% of his vehicle’s value. That gives you a rough idea of the scale of underpayment individual claimants experienced.

No official per-person dollar figure has been confirmed for the Arkansas settlement yet. When a claim form launches, the settlement administrator will calculate your individual share based on the actual underpayment in your specific claim.

How to File a Claim

The claim form for the Arkansas settlement is not yet open. Here is exactly what to do right now and what to expect when it opens.

Step 1 — Monitor the official settlement website Visit statefarmartotallosslitigation.com. This is the only court-authorized website for the Arkansas case. Do not submit information to any other site claiming to process State Farm total loss claims.

Step 2 — Gather your claim documents now Pull together your State Farm total loss settlement letter, the valuation report they sent you, any communication about the “comparable vehicles” used to price your car, and your policy number. Having these ready will speed up your claim.

Step 3 — Watch for a notice in the mail or email Once the court enters a notice order, State Farm will send class members a direct notification. This notice will contain your unique ID and instructions for filing.

Step 4 — Complete and submit the claim form by the deadline When the form goes live, visit the official website, enter your personal details and policy information, and submit before the announced deadline.

Step 5 — Save your confirmation number Record or screenshot your submission confirmation. You will need this if there are questions about your claim.

Estimated time to complete when form opens: 5–10 minutes.

Important Deadlines & Dates

Milestone	Date
Arkansas Lawsuit Filed	November 29, 2021
Class Certification Granted	March 18, 2024
Jury Verdict (Arkansas)	June 2025
Preliminary Approval	March 27, 2026
Claims Period Opens	TBD
Claim Filing Deadline	TBD
Opt-Out Deadline	TBD
Objection Deadline	TBD
Final Approval Hearing	TBD
Expected Payment Date	TBD

Check statefarmartotallosslitigation.com for updates as dates are announced.

For Kansas policyholders: the opt-out deadline in the Kansas class certification notice was November 13, 2025. If you are a Kansas class member who did not opt out, you remain bound by the outcome of that litigation.

Frequently Asked Questions

Do I need a lawyer to file a claim? 

No. Class action claim forms are designed for consumers to complete on their own. The attorneys who filed the lawsuit represent all class members at no out-of-pocket cost. You do not need to hire your own lawyer to participate in the settlement and receive payment.

Is this State Farm settlement legitimate? 

Yes. The Arkansas settlement received preliminary court approval on March 27, 2026 in the U.S. District Court for the Eastern District of Arkansas. The official website is statefarmartotallosslitigation.com. Be cautious of any other site that claims you can file a State Farm total loss claim — no other site is authorized by the court.

When will I receive my payment? 

No payment date has been set. The court still needs to grant final approval, process any appeals, and then distribute funds. Based on typical class action timelines, payments are unlikely before late 2026 at the earliest. Monitor the official settlement website for updates.

What if I missed the Kansas opt-out deadline?

 If you are a Kansas class member and the November 13, 2025 opt-out deadline has passed, you remain in the class automatically. You will share in any judgment or settlement in your favor, but you cannot pursue a separate individual lawsuit against State Farm for the same claim. Contact class counsel if you have specific concerns.

Will this settlement payment affect my taxes?

 Possibly. Payments that compensate you for actual economic losses — such as the underpayment on your car — are generally not taxable income. However, tax rules vary by situation. Consult a tax professional about your specific circumstances before filing your return.

What exactly is a “typical negotiation adjustment” and why does it matter?

State Farm applied a flat-rate deduction of 4% to 11% to the comparable vehicles it used to price your totaled car. Plaintiffs argue this adjustment was not based on actual negotiations and instead artificially reduced every total loss payment State Farm made to policyholders. That small percentage added up to hundreds of dollars per claim across tens of thousands of drivers.

I settled with State Farm directly. Can I still join? 

Accepting State Farm’s original total loss offer does not automatically disqualify you. The class definition covers policyholders who “received compensation” from State Farm — which includes those who accepted the initial offer. Review the notice you receive carefully, and contact the settlement administrator if you are unsure.

What if I live in a state other than Arkansas?

 The $15.6 million settlement is for Arkansas residents only. If you live in another state, a separate case may be active there. Attorneys are pursuing similar litigation in at least 19 states. You can also review how similar cases against other insurers have resolved — the Progressive total loss class action settlements on AllAboutLawyer.com show what multi-state resolution of these cases can look like.

Sources & References

• Official Arkansas Settlement Website — statefarmartotallosslitigation.com
• Official Kansas Litigation Website — statefarmkstotallosslitigation.com

Last Updated: April 5, 2026

Disclaimer: This article is for informational purposes only and does not constitute legal advice. Legal claims and outcomes depend on specific facts and applicable law. For advice regarding a particular situation, consult a qualified attorney.