State Farm Customers Get Class Status in Underpayment Lawsuit

State Farm Fire & Casualty Co. will face a certified class of Kentucky homeowners alleging the company underpaid them for property damage claims.

The lawsuit alleges State Farm had a common practice of depreciating labor costs in the calculation of actual cash value payments that applied to all Kentucky insureds. The class could include up to 11,800 Kentucky homeowners whose structural claims had depreciated labor costs withheld.

“Courts in jurisdictions where labor depreciation has been found to be unlawful have uniformly found that common issues predominate” in these kinds of cases, Judge Henry R. Wilhoit Jr. wrote for the U.S. ...