State Farm Accused of Refusing to Pay Adequate Hourly Rates for Luxury Vehicle Repair

State Farm is at the center of a Florida lawsuit alleging that the insurance company refuses to pay for proper and necessary repairs on luxury vehicles, such as Porsche. According to the class action complaint filed on May 18, the plaintiffs argue that State Farm’s business model sees it refuse to pay “appropriate” hourly labor rates for those high-value vehicles, leaving insureds to make up the difference.

In May 2022, plaintiff Ada Sasson was driving her 2022 Porsche Taycan when she was involved in a collision. After submitting a claim to State Farm, Sasson was referred to a Porsche-certified body shop by a local Porsche dealership. The shop, Stuttgart International, provided a repair estimate of more than $8,300.

State Farm rejected that claim, according to the complaint, and provided its own estimate of approximately $6,300. The plaintiffs, which include Assaf Sasson, argue that the estimate provided by the insurance company was based on “alternative labor hourly rates that are not the prices charged in the repair market of certified facilities.”

“Despite plaintiffs’ demand and the carrier’s admitted collision coverage obligations, State Farm has refused to pay the collision benefits in the total amount of $8,360.87,” the complaint reads. “This is the amount (as reflected in the estimate created by Stuttgart International) that was required to repair the insured vehicle at the prevailing competitive price, pursuant to the subject policy.”

Ada and Assaf Sasson say they were then forced to pay the difference between the estimate and the coast to repair the vehicle. The plaintiffs allege breach of contract, and breach of implied covenant of good faith and fair dealing.

Those allegations are included in the proposed class-action complaint, a relatively new development in the lawsuit that was originally filed in August 2022 as a breach of contract. However, the plaintiffs argue that the discovery process yielded information that justifies the suit’s designation as a class action.

According to the complaint, State Farm uses a practice for determining collision benefits on high-value vehicles that “fails to honor the requirements of the State Farm auto policy.” The plaintiffs say that means hundreds, even thousands, of insureds may be affected.

“While State Farm knows of the prevailing competitive prices for that repair market, it has consistently refused to pay those hourly rates for necessary collision repairs despite its promises to ‘pay for loss caused by collision to a covered vehicle,’” the complaint reads.

Furthermore, the plaintiffs argue that hourly rates accepted by the insurance company “generally” do not distinguish between models or types of cars.

“So State Farm uses only one rate (whether it is a Porsche or a Hyundai) as the hourly rate for any vehicle in the same geographic area,” the plaintiffs continue.

In addition to Porsche, potential vehicles applicable to the lawsuit as named in the complaint include Mercedes-Benz, Bentley, BMW and Maserati. The plaintiffs demand a jury trial in the case, according to the complaint.

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