Industry Shocked By State Farm Aftermarket Auto Parts Decision.

Claims, November, 1999 by Anderson, Curtis

The recent $1.2 billion aftermarket parts class action decision against State Farm Mutual Automobile Insurance, handed down by an Illinois circuit court last month, has drawn heavy criticism from aftermarket auto parts manufacturers, insurance companies and legal and economic scholars -- not to mention State Farm, the country's largest insurer of automobiles.

A jury in the small town of Marion, Ill., decided on Oct. 4 that State Farm breached its contracts with its policyholders through its practice of repairing damaged vehicles with aftermarket replacement parts. In the class action, Snyder v. State Farm, the jury awarded damages of $456 million to the plaintiffs for State Farm's practice of using, when available, non-original equipment manufacturer (OEM)...

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