State Farm will pay $15.58 million to settle a class action lawsuit alleging the insurer systematically underpaid Arkansas drivers for totaled vehicles between November 2016 and October 2021. About 37,000 policyholders qualify, with each class member set to receive an average payout of $489.
U.S. District Judge D.P. Marshall Jr. granted preliminary approval to the settlement on March 27, 2026, after a federal jury sided with lead plaintiff Rose Chadwick last June. State Farm denies wrongdoing but agreed to pay rather than continue litigation through appeal.
State Farm has agreed to a $15.58 million class action settlement covering Arkansas drivers whose totaled vehicles were valued using Audatex appraisal reports between November 2016 and October 2021. The lawsuit alleged that a roughly 9% "typical negotiation adjustment" applied to comparable vehicle prices reduced payouts below true market value. The final fairness hearing is set for July 15, 2026.
- Settlement covers about 37,000 Arkansas State Farm policyholders with total loss claims paid via Audatex valuations from Nov. 2016 through Oct. 2021
- Each class member receives an average of $489; lead plaintiff Rose Chadwick was underpaid roughly $600 on a $4,700 Hyundai
- Plaintiffs argued Audatex applied an arbitrary 9% "typical negotiation adjustment" to comparable used cars, shaving the actual cash value
- State Farm dropped Audatex in October 2021 and denies all allegations
- Object-by deadline is June 15, 2026; opt-out deadline is June 25, 2026; final approval hearing is July 15, 2026
What the Settlement Covers
The class includes Arkansas drivers whose total loss claims were calculated using a market-based valuation report from Audatex North America during the five-year window from November 2016 through October 2021. Filed in November 2021 by Chadwick in the Eastern District of Arkansas, the suit alleged that Audatex pulled four comparable vehicles listed online, then automatically reduced each one by approximately 9% before averaging the prices to set the actual cash value.
Chadwick's 2011 Hyundai was deemed a total loss in December 2020. State Farm's Audatex report valued the car at $4,121 and paid her $1,383 net of her deductible. A federal jury in Arkansas found in June 2025 that she had been shortchanged by about $600 on a vehicle worth roughly $4,700, according to court testimony cited by CBS News.
Judge Marshall wrote in his March 27 preliminary order that "the use of the Audatex system was the common and predominant issue" tying the class together. State Farm has agreed to cover attorney fees, litigation costs, the service award to Chadwick, and notice administration costs separately from the $15.58 million class fund, meaning the full settlement amount flows to claimants.
What This Means for Arkansas Drivers
If you filed a total loss claim with State Farm in Arkansas between November 2016 and October 2021, check your mail for a settlement notice. Class members do not need to file a new claim if they receive direct notice; the settlement administrator will distribute payments after final approval.
Three deadlines matter. Objections must be filed by June 15, 2026. Drivers who want to opt out and preserve their right to sue individually have until June 25, 2026. The final fairness hearing is scheduled for July 15, 2026, in the Eastern District of Arkansas, and payments typically begin 30 to 90 days after final approval, depending on appeals.
Verify the dates of any past total loss claim by pulling your declarations page or claim records from the State Farm app. If your payout was based on an Audatex report and your loss occurred between Nov. 2016 and Oct. 2021, you are likely in the class. Contact class counsel listed on the official notice if you have not received one by mid-May 2026.
How This Fits the Bigger Picture
The Arkansas case is the second eight-figure settlement against a major auto insurer in 18 months over total loss valuations. In July 2024, Progressive agreed to pay $48 million to roughly 93,000 New York drivers who alleged that Mitchell International's WorkCenter Total Loss software applied an improper "projected sold adjustment" of 6.5%, generating $335 average checks under that deal.
Total loss claims now drive a record share of auto insurance payouts. CCC Intelligent Solutions reported on March 31, 2026 that 23.1% of all auto claims ended in a total loss in 2025, an industry high. For non-comprehensive losses alone, the figure climbed to 23.9%, and 10.4% of driveable claims were totaled, up from less than 8% in 2021.
| Insurer | Settlement | State / Class Size | Disputed Adjustment | Year |
|---|---|---|---|---|
| State Farm | $15.58M | Arkansas / 37,000 | ~9% Audatex TNA | 2026 |
| Progressive | $48M | New York / 93,000 | 6.5% Mitchell PSA | 2024 |
| State Farm | $20.93M | New Mexico (UM coverage) | Underpayment (UM/UIM) | 2024 |
| AAA | $4.15M | Multi-state class | Comparable vehicle adjustments | 2024 |
Source: court filings and Insurance Journal reporting through April 2026. "TNA" refers to Audatex's Typical Negotiation Adjustment; "PSA" refers to Mitchell's Projected Sold Adjustment.
State Farm dropped Audatex in October 2021 and now uses an alternative valuation vendor, court filings show. Similar class actions over Audatex or Mitchell adjustments are still pending in North Carolina, Alaska, Illinois, Tennessee, and West Virginia. Cases in Kentucky and Mississippi were dismissed in October 2025, and a Sixth Circuit panel agreed in February 2026 to reconsider class certification in a separate State Farm valuation suit, signaling that appellate scrutiny is intensifying.
How to Dispute a Low Total Loss Payout
The Arkansas settlement does not refund non-class drivers, but every U.S. auto policyholder has tools to challenge a total loss number that looks light. Industry data from Bankrate shows that roughly two-thirds of drivers accept the first total loss offer, leaving recoverable dollars unclaimed.
Demand the Underlying Valuation Worksheet
Ask your adjuster for the full Audatex, Mitchell, or CCC valuation report, including the comparable vehicles used and every line-item adjustment. State unfair claims settlement laws require insurers to provide this on request.
Flag Any "Typical Negotiation" or "Projected Sold" Reductions
Look for percentage reductions of 4% to 9% applied to each comparable vehicle. These adjustments are the same line items challenged in the Chadwick case and the Volino case against Progressive. Demand the data backing each one.
Pull Three Independent Comps
Search Kelley Blue Book, Edmunds, and CarGurus for the same year, make, model, and mileage within 100 miles of your zip code. Document the asking prices, since list price disputes are why Chadwick's case prevailed.
Invoke the Appraisal Clause
Most policies allow either party to demand a binding appraisal. You hire one appraiser, the insurer hires another, and an umpire breaks any tie. Independent appraisals routinely raise payouts by $1,500 to $4,000 on disputed claims.
File With Your State Insurance Department If Stalled
If the insurer refuses to share the worksheet or stalls past 30 days, file a complaint with your state Department of Insurance. Regulator complaints often unlock a higher offer within two weeks.
Chadwick's 2011 Hyundai was valued at $4,121. The jury determined the true actual cash value was closer to $4,700, a gap of about 14% on a single car. Across 37,000 Arkansas claims, that gap added up to $15.58 million.
What Comes Next
Final approval hinges on the July 15 fairness hearing, where Judge Marshall will weigh objections and rule on attorney fee allocations. Settlement payments to class members typically begin within 60 days of final approval, assuming no appeals. Class members who want full updates can register through the settlement website that class counsel will publish in the official notice.
For drivers in other states with active State Farm claims, watch for parallel rulings out of North Carolina and the Sixth Circuit. A pro-class ruling in either forum would expand pressure on State Farm to settle similar suits in Alaska, Illinois, Tennessee, and West Virginia, potentially adding hundreds of millions in additional consumer recoveries.
Frequently Asked Questions
Arkansas State Farm policyholders who filed a total loss claim between November 2016 and October 2021 and received a payout based on an Audatex valuation report qualify. The class covers approximately 37,000 drivers. Class counsel will mail direct notices; eligible drivers do not need to file a new claim to receive their share.
The average payout is $489 per class member, drawn from the $15.58 million settlement fund. Individual amounts vary based on the size of the original total loss claim and the percentage by which Audatex reduced the comparable vehicle prices. Attorney fees and administration costs are paid separately by State Farm.
The final fairness hearing is scheduled for July 15, 2026. If Judge D.P. Marshall Jr. grants final approval and no appeals are filed, payments typically reach class members within 60 to 90 days. Object-by date is June 15, 2026, and the deadline to opt out is June 25, 2026.
The typical negotiation adjustment, or TNA, is a roughly 9% reduction Audatex applies to the listed prices of comparable used vehicles, on the assumption that buyers negotiate dealers down from the asking price. Plaintiffs argued the adjustment lacked statistical support and underrepresented true market value, especially in tight used-vehicle markets where list prices already reflect heavy buyer competition.
The Arkansas settlement only covers Arkansas drivers. However, similar class actions are pending in North Carolina, Alaska, Illinois, Tennessee, and West Virginia. Drivers in those states should monitor case dockets and preserve their valuation paperwork. Anyone disputing a recent total loss payout can invoke the appraisal clause in their policy and request the underlying valuation report from State Farm.
- Insurance Journal - State Farm Agrees to $15M Settlement for Underpaid Vehicle Claims (April 17, 2026)
- Repairer Driven News - State Farm to Settle Arkansas Actual Cash Value Lawsuit for $15.6 Million
- Body Shop Business - State Farm Reaches $15.58M Settlement in Arkansas Total Loss Valuation Case
- Top Class Actions - State Farm Settlement Over Totaled Car Payouts Receives Preliminary Approval
- Justia - Chadwick v. State Farm Mutual Automobile Insurance Company, Document 288
- CCC Intelligent Solutions - Crash Course 2026 Report (March 31, 2026)
- Insurance Journal - Progressive to Pay $48M to New York Drivers Over Underpaid Total Loss Claims
- Bankrate - How to Negotiate With a Car Insurance Company After a Total Loss