State Farm Payout: Millions for ‘Illusory’ Coverage Exposed!

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One of the largest insurance outfits this side of the Mississippi has gone and agreed to hand over millions to its customers, after folks started gossiping that the coverage they sold was about as useful as a screen door on a submarine. Bless their hearts, the claimants might just notice a payout before they notice their own shadows.

State Farm will rustle up a fund of $20.93 million to settle a class action that was first filed back in February of 2018. The suit charged State Farm with “intentional misrepresentation” of its wares and, as a consequence, sold New Mexico motorists insurance that amounted to nothing more than “illusory” coverage, like a promise from a game show host with a slick mustache and a thinner conscience.

The settlement class includes all those who purchased State Farm’s U Coverage insurance policies in New Mexico between January 1st of 2010 and December 31st of 2021. The compensation offered will be determined by the amount in premiums that each settlement class member paid and then calculated on a pro rata basis depending on the total number of claims.

“If you are a Settlement Class Member, you may be eligible for a Settlement Payment in an amount representing up to 21% of premiums you paid for minimum limits U Coverage purchased between 2010 to 2021 and 13% of premiums you paid for non-minimum limits U Coverage purchased between 2010 to 2021.”

To lay hands on a payout, claims must be turned in on or before July 2nd. The final settlement hearing will be held on June 8th.

Despite agreeing to the settlement, State Farm denies any wrongdoing. No court of law has weighed in on the matter, neither in favor of State Farm nor the plaintiffs.

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2026-04-10 10:22