Insurance
Home›Insurance›Property Insurance›State Farm loses bid over $6,500 repair underpayment d…
State Farm loses bid over $6,500 repair underpayment dispute
An appellate court reversed summary judgment for the insurer and sent a collision repair underpayment case involving a 2018 Audi Q7 back to trial after State Farm failed to produce the competitive-rate survey it relied on.
State Farm Mutual Automobile Insurance Company faced a setback in New York over a collision repair underpayment dispute tied to a $6,500 repair shortfall, after an appellate court reversed summary judgment for the insurer on September 23, 2026. Insurance Business reports the court sent the underpayment case back to trial, with the dispute arising after the insurer relied on a competitive-rate survey to justify the repair amount.
The case stemmed from a February 2023 accident involving a 2018 Audi Q7, which the policyholder took to Prospect Auto Sales and Repairs for restoration. Before work began, the policyholder signed several documents including a repair authorization and an assignment of claim that gave the shop the right to negotiate repair costs with the insurer and pursue underpayment.
The shop sued State Farm for breach of contract, arguing the insurer was required under the policy to cover reasonable and necessary repairs at the shop selected by the policyholder and failed to negotiate in good faith over procedures, parts, and costs, in violation of Insurance Law section 2601 and 11 NYCRR 216.7. State Farm sought dismissal, arguing there is no private right of action under those provisions, but the appellate court ultimately reversed the trial court’s decision to throw the case out.