State Farm Personal Property Settlement

Frequently Asked Questions

Helpful Hint: Using the general subject of your question may provide the best search results. For example, enter the word "hearing" in the search box to find information about the Settlement's Fairness Hearing.

1. Why did I receive this Letter?

State Farm failed to follow California law in its method for calculating depreciation on the items that you elected not to replace. This failure to use the right method may have resulted in a significant underpayment of benefits to you. You may be entitled to receive additional compensation. You only need to sign and return the postcard to the address on the card to start the simple process to determine if you are owed more compensation.

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2. What is this Settlement about?

This is a class action lawsuit that was brought against State Farm in Santa Clara County Superior Court. The case challenged the way that State Farm calculated depreciation on claims for loss or damage to your personal property. It was proven at trial that State Farm violated California law by unfairly calculating depreciation based upon the age alone of a damaged item without considering its condition at the time of loss. This ultimately resulted in over depreciation and inappropriately reduced payouts. Further, the Court held that State Farm violated California law by failing to accurately notify its policyholders in writing of the basis or reasoning for its calculation of depreciation.

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3. What type of personal property claims are covered by this Settlement?

This settlement only applies to losses personal property for which you received the actual cash value for your loss (i.e., accepted a payment for items that you elected not to replace). This settlement does not apply to personal property you lost that you actually replaced and for which State Farm reimbursed you.

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4. What am I entitled to receive under this Settlement?

You are entitled to receive a new adjustment of any item(s) that you identify from the inventory list (sent to you by State Farm) that you believe were over-depreciated. State Farm owes you the new retail replacement cost value of the item, measured at the time of your loss, less a reasonable deduction for depreciation based upon the physical condition of the property when it was lost or damaged. This is known as Actual Cash Value or “ACV.”

For example, you paid $100.00 to purchase a bicycle 5 years before your loss and State Farm applied an 80% depreciation value to pay you $20.00. A similar bicycle cost $120.00 at the time the bicycle was lost. The new adjustment reveals you rarely used your bike and stored it so that it wasn’t damaged, so that the condition of your old bicycle justified applying a depreciation value of only 25%. State Farm should have paid you “ACV” of $120 (the new retail cost) minus 25% (the depreciation of your old bicycle) for a total payment of $90.00. Taking into account the $20 already paid to you for the very same item, today you are owed $70 plus interest.

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5. What is “depreciation” of personal property in the context of a personal property insurance loss?

Depreciation is a decline in value of an item from the date it was originally new based upon a change or compromise in its physical condition. Factors that may determine condition include how the item was used and how frequently it was used, as well as the level of care the item was given. In some instances, the age of an item may also play a role in assessing the appropriate measure of depreciation to be assigned to a lost or damaged item, but often the age alone of an item is not relevant to the depreciation calculation. The quality of the item may also be relevant to depreciation as higher quality items typically last longer.

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6. How does quality impact depreciation?

Typically, higher quality items are made with more durable materials and last longer than items of lesser quality. So higher quality items may be in better condition compared to items of lesser quality following the same type and frequency of use.

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7. How is depreciation of personal property measured?

In all but rare circumstances, it is the physical “condition” of an item at the time of loss that will primarily determine the amount of the depreciation that will apply in calculating your “Actual Cash Value” (ACV) payout. The percentage that the item has been “used up” should determine the amount of depreciation to be assigned. A simple way of analyzing depreciation is that if an item is 50% (or halfway) through its estimated useful work life when damaged, it should be depreciated 50%. If it is 30% on its way to being fully used, then depreciation of 30% will apply, and so on.

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8. What is the “use” of an item?

The term “use,” as a depreciation factor, means the frequency with which an item has been used, as well as the type of “use” to which an item was subjected. The use of an item affects its condition, making “use” relevant to the depreciation analysis.

The more an item is used, the more worn it will become. The greater the “wear” or signs of use, the greater the item will be depreciated.

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9. What Items are affected by age?

Age alone is not a relevant factor with the vast majority of household items, however, some items, most notably electronic items such as TVs, toasters, radios, curling irons, computers, and the like, often have useful work lives that do not directly depend on their outward physical condition or how frequently they have been used or cared for. They often have built-in life expectancies. In such circumstances, their age may be a relevant factor in determining how much depreciation should be applied, as their age alone may affect the estimated remaining useful work life of such items.

For instance, you may learn that a particular laptop computer or flat screen T.V. is expected to give the consumer 5 to 7 years of dependable use, whether used regularly or not. So a 6-year-old computer or radio that has been hardly used that still looks new may still be subject to substantial depreciation because of its age or anticipated remaining usefulness.

Also, an item that has become technologically obsolete (such as an 8-track tape player) that is in excellent condition may be subject to 80% depreciation, because it plays music on a format that is hardly available to consumers.

There are other items made of materials that may deteriorate over time (unlike a towel or a frying pan) where the age of such items becomes relevant to the depreciation analysis.

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10. How is depreciation of clothing determined?

The condition of the item(s) of clothing you lost should determine the amount of depreciation assigned the item. This is a frequent area where insureds have been grossly underpaid during the claims process. The fact that a particular item was not one you ever intended to wear again, or was out of style, is not relevant to the calculation of depreciation. Insureds may have been pleased to receive “anything” for items of clothing they didn’t like or ever intended to wear. Yet the law requires that insureds receive much more than a garage sale payment.

So the ugly pair of cowboy boots that you received as a gift six years ago and worn only one time, and the robe you hardly used, if still in excellent condition should be assigned very little depreciation. Be aware that State Farm likely used a “depreciation guide” that very arbitrarily and aggressively assigned depreciation to items in general, and particularly clothing. As an example, the guide predicted the following items to have the following useful work lives:

  • 1) Men’s dress shoes, 3 years
  • 2) Bathing suits, 2 years
  • 3) Women’s formal dresses, 5 years
  • 4) Rain coats, 3 years
  • 5) Fabric Gloves, 1 year

Certainly if an insured wore only one pair of dress shoes to work for a year, the above prediction may be appropriate. But for the dress shoes worn infrequently, they would likely have a much greater useful life than 3 years.

To see more items listed on the age-based guide routinely used by State Farm, click here.

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11. How can I get my personal property claim reconsidered?

It is very easy. There are a few steps you will need to take, for your claim to be reconsidered:

Step 1: This is the most important step. Return the postcard that was included with the letter you received in the mail. The sooner you send the postcard the sooner State Farm can start the process of evaluating your request.
Step 2: Watch for a response from State Farm. After receiving the postcard from you, State Farm will send you a Contents Inventory Summary or a “CIS” form. The CIS form will show the quantity of a particular lost item, the type and description of item, the new retail replacement cost at the time of loss, the percentage of depreciation deducted, and the ultimate payout made to you.
Step 3: Review the CIS form and identify the item(s) where you believe State Farm applied unfair depreciation value to your property. Consider the rules for calculating depreciation described in this website. It is a pretty straightforward and logical process. However, a very simple rule of thumb is as follows, if you listed, for example, a sofa wherein State Farm calculated depreciation of 50% that you feel had more than half of its remaining useful work life remaining, then the item was probably over depreciated, entitling you to further compensation. Or a pair of dress shoes that were 3 years old that you hardly wore may have been depreciated 80%, for example, when you believe they were in great condition and experienced only about 20% of their useful life.
Step 4: For the items on the CIS Form that you believe may have been overly depreciated, describe the condition at the time of the loss and the frequency with which you used them. For example, excellent or very good at the time of the loss. You only comment on the condition of items that you believe were over depreciated (undervalued). Old photographs of the item may be used if you have any. If you have no photographs, your own truthful description of the condition of the item, based upon your personal knowledge is sufficient. Perhaps a friend or family member can also confirm for example, that you hardly ever used a particular item. After all, with the passage of so much time, it is difficult for most people at this late date to provide much more than their word on the condition of an item they lost years ago.
Step 5: You must respond to State Farm’s inquiries. State Farm may have questions for you. So just explain what you believe to be true. Thereafter, State Farm will most likely make you a new offer. Try to work out a fair compromise with your State Farm claims professional. You can request the input of an independent adjuster if State Farm determines that you are not entitled to receive a new offer or if the new offer presented is unsatisfactory and you are unable to come to a satisfactory compromise. State Farm alone will have to pay for the cost of the appraisal by an independent adjuster. The appraisal by independent adjuster will cost you NOTHING and the findings of the appraiser can only result in a payment to you. Under no circumstances will State Farm be able to claim a set-off or that they overpaid your claim originally.

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12. What should my claim include?

Make a photocopy of your CIS spreadsheet and circle the item(s) that you will would like to submit for adjustment. Alternatively, simply identify the item(s) by description and item number in your correspondence to State Farm. Whatever is easiest for you. For each item you identify, provide State Farm with any information that you have that you believe supports your claim that the item was originally over-depreciated by State Farm.

For example, a picture of a dining room area in your home while explaining that the dining room would only be used for holidays and special occasions, etc. and that the furniture and related items in that room, although 12-15 years old at the time of your loss, were in seldom used excellent condition, will be helpful. If you do not have photographs, your description about your infrequent use or the overall condition of these items should also suffice. Simply provide State Farm with a description of how the item was used and why you believe it was in a condition that should not have been depreciated as much as it was. A sample resubmission claim letter can be found on the website at

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13. What is a Contents Inventory Summary (CIS)?

The Contents Inventory Summary is a spreadsheet prepared by State Farm and taken from the personal property inventory form that you submitted in connection with your old claim. State Farm will mail you a copy of this form. It is the same form that State Farm sent you at the conclusion of your claim.

For items that you elected not to replace and instead requested to be paid actual cash value, under the column, “settlement option”, the actual cash value option will be indicated. For items that you replaced, the settlement option will state “Insured replaced”. There will be no review here of replaced items, as this lawsuit has addressed only items for which you have received an actual cash value (ACV) payout.

A Sample Content Inventory Summary can be found here.

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14. What is the minimum and maximum depreciation allowable by law?

There is no minimum amount of depreciation that must be applied to the loss of any of your items. So damaged items in new condition that are not affected by age, should not be depreciated. On the other hand, as long as an item remains to be useful, even if heavily worn, your insurance company may not depreciate the item more than 80%. So you are entitled to receive, at minimum, 20% of the item’s retail replacement cost at the time of your loss.

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15. How will State Farm respond to my re-submission?

When State Farm responds to your request for a readjustment of actual cash value on any particular item, State Farm must provide to you, in writing, an explanation supporting its depreciation calculation. You may demand this from your claims professional. State Farm will provide its assessment on the claimed item, but for the most part will not be able to refute or dispute your description of the condition of the items you have challenged.

State Farm is not allowed by the terms of this settlement to offset the amount they claim to have overpaid you against the amount you were underpaid. In other words, you will be paid in full on the amount for each item where you have been underpaid, with no offsets.

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16. Can State Farm cancel or fail to renew my policy or increase my premiums if I re-submit my claim?

No. State Farm cannot cancel your insurance policy for resubmitting your claim, nor can State Farm increase your insurance premiums on any insurance you have with State Farm.

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17. Who represents the State Farm policyholder? Do I have a lawyer in this case?

Counsel for the policyholders are: Robert Buccola and Steve Campora of Dreyer Babich Buccola Wood Campora LLC, and C. Brooks Cutter and John R. Parker of Cutter Law, P.C. : If you have any questions about this offer or about your rights in general, please call 888-377-9637 or email us at

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18. When will the settlement be final?

The Court has tentatively scheduled a final settlement fairness hearing to be held on February 8, 2018 at 10:00 a.m. in Department 19, to decide whether to approve the settlement. The court is located at 161 N 1st Street, San Jose, CA 95113. The hearing may be rescheduled to a later time without further notice to you. You may, but do not have to, attend the final approval hearing.

After the court rules on the final approval, and either the time to appeal has expired or any appeal filed has been resolved, the settlement will become final.

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19. Can I appear at the settlement hearing?

Yes. However, your appearance is not required. If you appear, you may participate and speak for yourself in the settlement hearing. This is called making an appearance. If you wish to be represented by a separate lawyer, you'll have to pay for the lawyer yourself.

If you want to appear or if you want your own lawyer to participate and speak for you regarding the settlement, you must first file a timely objection to the settlement, (as described below in question 21). You must also include in the objection the statement, “I intend to appear at the hearing.”

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20. Who is part of the class?

California residents insured under a State Farm homeowners or commercial insurance policy between December 31, 2004 and the summer of 2014 who made a claim for damage or loss to personal property and accepted payment from State Farm of less than the applicable policy limits, or whose claims are still pending and have not been offered the policy limits.

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21. Can I tell the Court I do not like the settlement?

You may tell the Court you do not like the settlement or some part of it by submitting an objection. You may object to any terms of the settlement.

You must file written statements describing your objection and any reasons supporting your position with the Santa Clara County Superior Court by no later than October 1, 2018.

You must also send your objections to each of the following individuals, postmarked no later than October 1, 2018:

ATTN OBJECTION Robert A. Buccola Dreyer Babich Buccola Wood Campora LLP 20 Bicentennial Circle Sacramento, CA 95826

ATTN OBJECTION C. Brooks Cutter Cutter Law PC 401 Watt Avenue Sacramento, CA 95864

ATTN OBJECTION Michael O’Neill SHAVER, KORFF & CASTRONOVO, LLP 16255 Ventura Boulevard, Suite 850 Encino, CA 94136

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