Published: Jun 10, 2026
If your vehicle was totaled between November 29, 2016, and October 18, 2021, you may be owed money.
According to Claim Depot, eligible policyholders can receive an average payment of $489, with claims due no later than August 19, 2026. The case, formally titled Chadwick v. State Farm Mutual Automobile Insurance Co., centers on a specific valuation tactic that plaintiffs say shortchanged drivers across Arkansas. The Save Max Quote Index, drawn from 3.3 million+ real quote requests, shows Arkansas drivers already carry some of the region's more competitive premiums, making any underpayment on a total loss claim a meaningful financial hit for affected households. For a deeper look at how Arkansas auto insurance costs compare statewide, SaveMaxAuto's state guide breaks down coverage benchmarks by driver profile.
State Farm Agrees to $15.6 Million Settlement Over Arkansas Total Loss Claims
State Farm Mutual Automobile Insurance Co. reached a settlement resolving allegations it underpaid Arkansas policyholders on total loss vehicle claims. The company agreed to the resolution to avoid continued litigation, though it denies all allegations underlying the lawsuit.
The class action, as detailed by Claim Depot, covers a defined window of total loss claims and a specific valuation method. State Farm identified most eligible class members through its own claims data and mailed or emailed them a settlement notice containing a unique ID and web registration code.
That notice is not just informational. It is your ticket to filing.
If you received a postcard or email with those credentials, you are likely already identified as a class member. The question is whether you act before the August 19, 2026, claim deadline.
The Negotiation Adjustment Tactic at the Heart of the Lawsuit
The lawsuit did not accuse State Farm of miscounting damages or disputing liability. The allegation was more specific: State Farm applied a "typical negotiation adjustment" (TNA) to the value of comparable vehicles when calculating total loss payouts, and that adjustment, plaintiffs argued, artificially deflated what drivers were owed.
State Farm used Audatex, a vehicle valuation platform, to generate these reports. Audatex applied the TNA to at least one comparable vehicle in each affected claim, reducing the baseline value used to calculate the actual cash value of the totaled car.
"The class action lawsuit claimed State Farm paid Arkansas insureds less than the actual cash value for total loss vehicles by applying a typical negotiation adjustment to the value of comparable vehicles."
The plaintiff alleged this practice breached State Farm's insurance contracts and the implied covenant of good faith and fair dealing. That is a significant legal claim: it goes beyond a simple billing dispute and argues the insurer violated the fundamental trust built into every policy.
State Farm disagrees. But rather than litigate further, it agreed to settle.
Who Qualifies and How the $489 Average Payment Is Calculated
Eligibility is not automatic. Class members must meet all three of the following criteria:
- They made a first-party claim on a State Farm Mutual Automobile Insurance Co. policy issued to an Arkansas resident.
- State Farm declared their vehicle a total loss between November 29, 2016, and October 18, 2021.
- State Farm based the claim payment on an Audatex report that applied a typical negotiation adjustment to at least one comparable vehicle.
If you meet all three, you are eligible to file a claim. The payment formula is straightforward:
Payment = TNA amount x 0.68
Your individual payout equals 68% of the typical negotiation adjustment amount State Farm applied to your specific claim, as determined by State Farm's records. The estimated average across all class members works out to $489, though your actual payment may be higher or lower depending on your vehicle's TNA figure.
Neighboring states have faced similar insurer disputes over valuation practices. Drivers in Tennessee and Missouri have seen comparable litigation patterns emerge around total loss settlements, underscoring that this is not an isolated Arkansas issue.
Where the $15.6 Million Actually Goes: Settlement Fund Breakdown
The total settlement fund is structured so that class member payments are ring-fenced from attorney fees and administrative costs. Here is how the money is allocated:
| Payments to class members | $15,583,700 |
| Attorneys' fees (up to) | $4,675,110 |
| Attorneys' expenses (up to) | $850,000 |
| Service award to class representative | $15,000 |
| Settlement administration costs | To be determined |
The critical detail: the $15,583,700 class member pool is not reduced by attorney fees or admin costs. Those amounts are drawn separately, meaning your payout is not diluted by the legal bill.
That ring-fencing is meaningful. In some settlements, attorney fees come directly out of the class fund, compressing individual payments. That is not the structure here.
Key Deadlines: What Has to Happen Before You Get Paid
The settlement follows a court-supervised timeline with several milestones before any money changes hands.
- June 25, 2026: Deadline to request exclusion from the class. If you opt out by this date, you preserve your right to sue State Farm independently but forfeit any settlement payment.
- July 15, 2026: Final approval hearing. A court will review the settlement terms and decide whether to grant final approval.
- August 19, 2026: Deadline to submit a valid claim form. Missing this date means forfeiting your payment entirely.
After final approval, the payout timeline depends on payment method. Electronic payments will be issued no later than 45 days after the court resolves any appeals and grants final approval, or when State Farm delivers the settlement funds, whichever is later. Physical checks follow within 60 days of the same trigger.
If the final approval hearing on July 15 goes smoothly and no appeals are filed, eligible claimants who chose electronic payment could see funds within roughly six to eight weeks of that date.
The SMQI data reflects that Arkansas policyholders are rate-sensitive, making timely recovery of underpaid claims especially valuable for household budgets already stretched by insurance costs. Drivers in neighboring Mississippi face similar dynamics, where total loss disputes can leave families without a vehicle and without fair compensation for weeks.
What this means for you
If you had a State Farm total loss claim in Arkansas between November 29, 2016, and October 18, 2021, locate your settlement notice and retrieve your unique ID and registration code before August 19, 2026. File your claim online or mail your completed form to the Settlement Administrator at PO Box 2798, Faribault, MN 55021-9798. Choose electronic payment if you want your money within 45 days of final approval rather than 60. Act now, the exclusion deadline of June 25, 2026, passes before the claim deadline, so if you want to stay in the class and get paid, do not request exclusion by mistake.
FAQ
How do I know if I am included in the Arkansas State Farm total loss settlement?
State Farm identified most eligible class members through its own claims records and sent notices by email or postcard containing a unique ID and web registration code. If you received that notice and your total loss occurred between November 29, 2016, and October 18, 2021, under a policy issued to an Arkansas resident, you likely qualify. Review your email and physical mail for a notice from the settlement administrator.
What is the typical negotiation adjustment and why does it matter?
The typical negotiation adjustment (TNA) is a reduction Audatex applied to the value of comparable vehicles when generating total loss valuations for State Farm. Plaintiffs alleged this adjustment lowered the actual cash value State Farm paid out, meaning drivers received less than their vehicles were worth under their policy terms. Your individual settlement payment equals 68% of the TNA amount applied to your specific claim.
What happens if I miss the August 19, 2026, claim deadline?
Missing the deadline means you will not receive a settlement payment, even if you are otherwise eligible. The claim deadline is firm, and no late submissions are described in the settlement terms. If you want to preserve your right to pursue State Farm independently instead, you must request exclusion by June 25, 2026, which is a separate and earlier deadline.
Can I get a physical check instead of electronic payment?
Yes. Unless you actively select an electronic payment method, the settlement administrator will default to mailing a physical check to the address you provide on your claim form. Physical checks are issued no later than 60 days after final court approval and resolution of any appeals, compared to 45 days for electronic payments.
Does filing a claim affect my current State Farm policy?
The settlement terms described by Claim Depot do not address any impact on active policies. Filing a claim is a separate legal process from your ongoing insurance relationship. Consult a licensed insurance attorney or your state's insurance department if you have specific concerns about your current coverage.
About Brooke Grissom
Brooke Grissom is an Independent Insurance Analyst at SaveMaxAuto, licensed in Property & Casualty and Health insurance. She covers data-driven market trends, cross-state premium comparisons, and carrier financial analysis. Read more from Brooke Grissom →
Edited by Taleah McGuire.
Methodology
This article is grounded in the source linked above. SaveMaxAuto data points referenced here are drawn from the Save Max Quote Index (SMQI), a proprietary instrument reflecting 3,364,317 real consumer quote requests submitted to savemaxauto.com. State and carrier rankings reflect the lifetime dataset; year-over-year shifts reflect a rolling 12-month window. The index is refreshed monthly. External authority figures referenced (NAIC, NHTSA, state regulators) reflect the most recent public data releases available at time of writing.
Sources
- Primary source: Claim Depot, "State Farm Arkansas Total Loss Claims Settlement"