AAA Insurance $4.15M Class Action Settlement

Consumers who purchased a New Mexico automobile insurance policy with uninsured/underinsured motorist coverage from AAA or whom AAA reduced their underinsured motorist claim by the amount paid by an at-fault driver between Jan. 1, 2010, and May 4, 2022, may qualify to submit a claim for up to $25,000 or receive a partial premium refund from a class action settlement.

Interinsurance Exchange of the Automobile Club, also known as AAA, agreed to pay $4.15 million to settle a class action lawsuit. The plaintiff claimed AAA failed to properly inform policyholders that, under New Mexico law, it would reduce or offset underinsured motorist benefits by amounts received from the at-fault driver’s insurer.

Who is eligible for a AAA settlement payout?

Class members must meet one or both of the following criteria:

• AAA reduced or offset their underinsured motorist claim by the amount paid by the at-fault driver in an accident that occurred between Jan. 1, 2010, and May 4, 2022.
• They purchased a New Mexico automobile insurance policy from AAA that included UM/UIM coverage between Jan. 1, 2010, and May 4, 2022. They do not need to have made a claim.

The settlement is structured to provide different benefits depending on which group the class member belongs to:

• Those whom AAA reduced their UIM claim by the at-fault driver’s insurance payment may be eligible for a cash payment of up to $25,000.
• Those who only purchased UM/UIM coverage but did not have a reduced claim may be eligible for a partial refund of the premiums they paid during the class period.

How much will the settlement payment be?

• Class members who submitted a UIM claim that AAA reduced can submit a claim to receive a pro rata cash payment of up to $25,000. The settlement administrator will determine the final payment amount by the number of claims filed.
• Class members who purchased UM/UIM coverage but did not have a reduced claim can submit a claim to receive a partial premium refund. The settlement administrator will determine the final payment amount by the number of claims filed and other factors.

How to claim a class action rebate

Class members with a reduced UIM claim must file a claim online or print the PDF claim form to complete and mail to the settlement administrator.

Class members who purchased UM/UIM coverage but did not have a reduced claim do not need to submit a claim to receive a payment.

Settlement administrator’s mailing address: Smith v. AAA Settlement Administrator, PO Box 5339, Portland, OR 97208-5339

The claim deadline is April 29, 2026.

Required claim information

• To submit a claim online, class members must provide the unique ID and PIN from the settlement notice they received.
• Claimants must must certify under penalty of perjury that they made an underinsured motorist claim that AAA reduced by the at-fault driver’s insurance payment.

Payout options

• Check mailed to the address provided
• Electronic payment

$4.15 million AAA insurance settlement fund

The $4,150,000 settlement fund will include:

• Settlement administration costs: To be determined
• Attorneys’ fees: $1,383,195
• Attorneys’ expenses: Up to $5,000
• Service award to class representative: $10,000
• Payments to approved claimants with reduced UIM claims: Up to $1,400,000
• Payments to class members who purchased UM/UIM coverage: Remaining settlement funds

Important dates

• Deadline to opt-out from the settlement: March 30, 2026
• Deadline to submit a claim form: April 29, 2026
• Final approval hearing: To be determined

When is the AAA New Mexico UM/UIM insurance settlement payout date?

The settlement administrator will issue payments after it completes claim processing and the court grants final approval of the settlement.

Why is there a class action settlement?

This class action lawsuit alleged AAA breached its insurance contracts and violated New Mexico law by failing to properly inform policyholders that it would reduce underinsured motorist benefits by the amount the at-fault driver’s insurer paid. The plaintiff also claimed AAA was negligent, unjustly enriched, breached the duty of good faith and fair dealing, engaged in negligent misrepresentation and violated the New Mexico Unfair Trade Practices Act and Unfair Insurance Practices Act.

AAA denies any wrongdoing but agreed to settle to avoid further litigation and a possible trial.

Sources

1. Class action settlement notice
2. Settlement website
3. Settlement agreement