State Farm Ordered to Pay $277K to TX Policyholder


In June, a jury in Rusk County District Court in Texas found State Farm had “knowingly or intentionally engaged in unfair and deceptive acts or practices” when it undervalued and then totaled a policyholder’s pickup truck in 2020, the Auto Body Association of Texas (ABAT) said.

Joseph Collins had taken his hail-damaged Toyota Tacoma to Burl’s Collision Center in Henderson, TX, wanting the truck repaired. Instead, State Farm decided it was a total loss. 

In Texas, to declare a total loss, the cost to repair the vehicle must exceed 100% of the vehicle’s cash value. The shop owner, Burl Richards---who is also the president of ABAT---did not think the hail damage met that threshold and told Collins to contact Robert McDorman at Auto Claim Specialists. McDorman found the insurance company had undervalued the truck.

Meanwhile, State Farm paid Collins for the totaled truck---after deducting $1,750 in blueprint fees and other charges---and then sold it at auction with a clean title, Richards said.

Collins hired a lawyer and took the case to the Fourth Judicial District Court of Rusk County, where the jury found State Farm had knowingly and intentionally engaged in unfair and deceptive practices---a charge that carries a more than $175,000 penalty. With court fees, State Farm was ordered to pay Collins $277,048.


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