Two major insurers have agreed to multi-million dollar settlements in class action lawsuits that claim they reduced underinsured motorist claims by the amount paid by the at-fault driver.
Nationwide has agreed to pay a total of $2.65 million to customers who had an underinsured motorist claim reduced or offset by the amount paid by the at-fault driver between October 1, 2010, and March 31, 2022. The class also includes anyone who purchased a New Mexico auto policy from Nationwide that contained uninsured/underinsured motorist coverage between those dates.
The class action suit alleges Nationwide violated New Mexico law by failing to properly advise insured that UIM claims would be reduced by the amount paid by the at-fault driver's policy. This left insureds confused when receiving payouts from UIM claims that were lower than expected.
The final approval hearing for the Nationwide settlement has not yet been scheduled.
AAA has agreed to pay $4.15 million to settle a nearly identical class action lawsuit. The case against AAA also alleges the insurer violated New Mexico law by leaving insureds in the dark about UIM claim payment adjustments.
Class members for AAA's suit include customers who had a UIM claim with AAA reduced or offset by the amount paid by the at-fault driver between January 1, 2010, and May 4, 2022, or who purchased a New Mexico auto insurance policy containing UM/UIM coverage during that time period.
The final approval hearing for the AAA settlement is scheduled on or after May 13.
Neither Nationwide nor AAA has admitted to any wrongdoing in their respective settlements.
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