State Farm Settles Car Repair Class-Action Suit

State Farm has agreed to settle a class-action lawsuit alleging the company cheated more than 2 million California customers by using inferior parts to repair their cars.

The lawsuit filed more than five years ago accused the state’s largest car insurer of using the imitation parts in repairs without telling customers their policies restricted the use of more-expensive factory parts.

Under the settlement announced Monday, about 2.3 million customers with policies between Feb. 1, 1987, and Sept. 25 are eligible for car repairs or $35 each.

“They can’t just put a cheap, inferior part into somebody’s car and not tell them,” said Howard Finkelstein, an attorney for the plaintiffs. “Disclosure is a key part of this settlement.”

State Farm spokesman Bill Sirola said the insurer will continue to base its estimates on the less-expensive parts as long as they are certified to be an equal or better quality than the manufacturers’ parts.

State Farm will also inform car owners of the practice by writing it into car insurance policies, he said.

The company does not anticipate a flurry of claims from its 2 million California policyholders.

“The number of cases this might affect is somewhere in the 1,000 range,” Sirola said.

The settlement was approved Thursday by Superior Court Judge James McIntyre.

People who believe they are eligible for settlement awards should call (800) 601-7890 for an application to file a claim.