Originally created 02/25/03

Court ruling against auto insurers means money for charities



ATLANTA -- A court ruling meant to make auto insurers compensate motorists for the diminished value of their vehicles after accidents has brought a multimillion dollar windfall to Georgia charities.

Insurance companies settled several class-action suits since the state Supreme Court ruled in November 2001 that insurers had to cover not only repairs to damaged vehicles, but also had to compensate owners for the loss in value that resulted from the collision.

But thousands of Georgians who were eligible to share in the settlements either couldn't be found or didn't claim their part of the money.

As a result, nearly $8 million will be given to organizations such as local chapters of the Boy Scouts and Girl Scouts of America, the Make-a-Wish Foundation and the Emory Health Care System at Emory University.

And that's from just two settlements - some $6.6 million left over from a suit against insurance giant State Farm and another $1.3 million from a settlement by GEICO.

Another 21 insurance companies are still distributing settlements to eligible members in similar class action suits.

Lawyers who filed the suits say they believe almost $1 billion will go to Georgians as part of the settlement and that unclaimed money sent to charities eventually will exceed $20 million.

Plaintiffs' attorney Neal Pope of Columbus said attorneys have made every effort to reach all 700,000 motorists eligible to receive settlement money as part of this class-action case.

"But that's not always possible because some don't cash their checks and some can't be found," Pope said, adding that 7 percent of those eligible - or 49,000 people - were not paid.

In the original lawsuit, policyholders argued and the court agreed that wrecked cars are worth less no matter how well they are repaired, and that State Farm should pay the difference.

Illinois-based State Farm, which writes at least one out of every five auto policies in the state, agreed to pay $100 million in reimbursements to policyholders who had filed claims since Dec. 22, 1993.

Policyholders received a minimum of $25 each and as much as several thousand dollars, depending on the amount of their original claim.

Soon after, Pope and others filed similar class-action lawsuits against 22 other companies, including Progressive, MetLife and Allstate. Together, the lawsuits affect about 70 percent of Georgia's drivers.

Emory University law professor Richard Freer said giving unclaimed settlement money to charity is rare but not unheard of.

"Some say the excess money should go back to the defendant," he said. "Others says that since the company agreed to pay the money to avoid going to litigation and risk having their head handed to them, it's not theirs to have anymore."

Insurance settlements paid to charities

STATE FARM

Class members: More than 700,000

Settlement amount: $150 million

Amount to charity: $6.6 million

Boy Scouts of America, Chattahoochee Council: $750,000

Girl Scouts of America, Concharty Council: $250,000

Emory Health Care System at Emory University: $1 million

The Emory Center for Heart Failure Therapy: $1 million

The University of Georgia Foundation: $1 million

River Keepers of Georgia: $70,000

Mercer University School of Medicine: $1.6 million

Our House: $200,000

State Bar of Georgia: remaining funds no less that $846,140

GEICO

Class members: 86,000

Settlement amount: $21 million

Amount to charity: $1.3 million

Emory Health Care System at Emory University: $500,000

Boys and Girls Club of Georgia: $600,000

Our House: $150,000

Make A Wish Foundation: $143,767

Source: The Atlanta Journal-Constitution