This class action against State Farm Fire and Casualty Insurance Company involves calculations for roofing repair claims on properties in Louisiana. The complaint alleges that the Xactimate software used to calculate claims is set to a default setting that underestimates the costs for roof demolition labor.
The class for this action is all persons and legal entities insured under a State Farm Fire and Casualty Insurance Company homeowner policy who, between April 27, 2012 and the present, received from State Farm Fire and Casualty payments that were supposed to be actual cash value payments for roofing repair work on a home or residential structure in Louisiana under a homeowner’s insurance policy claim.
On May 27, 2020, the home of the plaintiff in this case, Michael Stelly, suffered storm damage that the complaint describes as “severe damage to the entire roof, gutters, window screens, downspouts, drip edges, roof vents, flashing and chimney flashing.” The complaint alleges this was a covered loss under Stelly’s State Farm Fire and Casualty insurance policy.
When State Farm Fire and Casualty receives a claim for roof damage, the complaint alleges, it first assigns an adjuster who verifies and assesses the damaged roof. These adjusters then enter the information in the Xactimate software program, which the complaint says “assigns a default price for each line item of roofing repair to be undertaken.”
This is where the complaint takes issue with the software: “For one of the areas of labor costs—removal costs for roofing repairs—the system is set to an erroneous default which does not reflect the actual labor burden for this type of work.”
According to the complaint, the default labor cost setting for this type of work is “demolition,” coded as DMO, which is priced as unskilled labor. But roofing work entails certain risks not present in most demolition, and the complaint therefore claims the workers who do this kind of work must be roofers, coded as RFG, according to workers compensation providers. All companies in Louisiana (with a few inapplicable exceptions) must have workers compensation, so this classification matters.
The RFG work has a higher pay rate, and higher workers compensation premiums, than DMO work.
State Farm Fire and Casualty has the largest part of the homeowner’s multi-peril insurance market in Louisiana, the complaint claims, with more than 26 percent of market share. The state has a significant number of weather-related events that cause damage to homes, such as hurricanes and severe rainstorms, both of which often lead to roof damage.
Article Type: LawsuitTopic: Insurance
Most Recent Case Event
State Farm Fire and Casualty Roof Damage Labor Costs Louisiana Complaint
April 27, 2022
This class action against State Farm Fire and Casualty Insurance Company involves calculations for roofing repair claims on properties in Louisiana. The complaint alleges that the Xactimate software used to calculate claims is set to a default setting that underestimates the costs for roof demolition labor.
State Farm Fire and Casualty Roof Damage Labor Costs Louisiana ComplaintCase Event History
State Farm Fire and Casualty Roof Damage Labor Costs Louisiana Complaint
April 27, 2022
This class action against State Farm Fire and Casualty Insurance Company involves calculations for roofing repair claims on properties in Louisiana. The complaint alleges that the Xactimate software used to calculate claims is set to a default setting that underestimates the costs for roof demolition labor.
State Farm Fire and Casualty Roof Damage Labor Costs Louisiana Complaint