Liberty Mutual Settles Auto Claim Underpayment Lawsuit for $6.5 Million
Liberty Mutual Insurance has agreed to a $6.5 million settlement to resolve a class action lawsuit alleging the company underpaid auto insurance claims by using unreasonably low labor rates when calculating repair estimates. The settlement covers policyholders in twelve states who had auto damage claims processed between January 2018 and December 2024.
According to court documents, Liberty Mutual allegedly used a proprietary labor rate database that consistently priced repair work below the prevailing market rates charged by body shops, resulting in claimants receiving less than the actual cost of repairs. The lawsuit was filed in the U.S. District Court for the District of Massachusetts and received preliminary approval in February 2026.
Which States Are Covered?
The settlement applies to Liberty Mutual auto insurance policyholders in the following states:
- California, Florida, Georgia, Illinois, Massachusetts, Michigan
- New Jersey, New York, Ohio, Pennsylvania, Texas, Virginia
If your policy was issued in one of these states and you had an auto damage claim processed during the class period, you are likely a member of the settlement class. Claims from other states are not included in this particular settlement.
Estimated Payments
Individual payments will depend on the number and value of qualifying claims. Based on the settlement fund and estimated class size, the claims administrator projects payments in the following ranges:
- Single claim during the class period: $75 to $200
- Multiple claims during the class period: $150 to $500
- Claims involving significant repair work (over $5,000): $200 to $750
These are estimates and actual amounts may be higher or lower depending on total participation. Claimants do not need to provide documentation of the underpayment amount, as the settlement administrator will calculate individual shares based on Liberty Mutual's claims records.
How to File
Liberty Mutual is required to send direct notice to class members using the contact information on file from their insurance policies. If you have not received a notice, you can still file a claim:
- Online: Visit LibertyMutualAutoSettlement.com and enter your policy number or name
- By phone: Call the settlement administrator at 1-800-555-0234
- By mail: Download the claim form from the settlement website and mail it to the address provided
The claim filing deadline is July 31, 2026. If you believe you qualify, do not wait for a direct notice. Check your eligibility and file your claim now to ensure you do not miss the deadline.
What Happens Next
The court has scheduled a final approval hearing for August 28, 2026. If the settlement receives final approval, payments are expected to be distributed in the fourth quarter of 2026. Class members who do not opt out or object will automatically release their claims against Liberty Mutual related to the labor rate issue.
Should You File?
If you had an auto insurance claim processed by Liberty Mutual in one of the covered states during the class period, there is no cost or downside to filing. The claim process takes approximately 10 minutes online, no attorney is needed, and you will not owe any fees. Even modest payments represent money you were already owed for repair costs that were underpaid.
If you are unsure whether your policy qualifies, the settlement website includes a lookup tool that checks eligibility using your name, policy number, or the last four digits of your Social Security number.
