State Farm agrees to pay $250 million

ATLANTA -- State Farm Mutual Automobile Insurance Co. has agreed to a $250 million settlement in which it must pay as many as 700,000 Georgia motorists for the lost value of cars damaged in collisions.

The settlement of a class-action lawsuit announced Friday calls for Bloomington, Ill.-based State Farm to pay $100 million in diminished value reimbursements for accident claims filed since Dec. 22, 1993.

The company also agreed to pay all future claims in Georgia, which both sides in the lawsuit say will reach another $100 million over the next six years.

Another $50 million will be paid for court costs and attorneys' fees.

Eligible policyholders will receive at least $25 and up to several thousand dollars, depending on the amount of the original claims.

The settlement ends a lawsuit filed in Columbus two years ago in which policyholders contended their vehicles were worth less after a wreck no matter how well they were repaired.

State Farm responded that properly repaired cars did not diminish in value.