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Consumers who held a property insurance policy with American Family Insurance in Arizona and made a structural damage claim between June 24, 2018, and Nov. 4, 2022, may qualify to claim up to $200 from a class action settlement.
American Family Mutual Insurance Co. and Homesite Insurance Co. agreed to pay $2.4 million to settle a class action lawsuit alleging they improperly deducted nonmaterial depreciation from certain structural loss insurance claims in Arizona.
Who can file a claim?
Class members must meet the following criteria:
- They held a property insurance policy in Arizona issued by American Family Insurance between June 24, 2018, and Nov. 4, 2022.
- They made a structural loss claim under Coverage A or Coverage B of the policy.
- American Family used an Xactimate estimate to aid in determining the actual cash value payment.
- American Family issued an ACV payment but withheld nonmaterial depreciation or would have issued an ACV payment but withholding nonmaterial depreciation caused the loss to drop below the applicable deductible.
A “structural loss” is defined as physical damage to a home, building, manufactured home, condo, rental dwelling or other structure in Arizona covered by a qualifying policy. “Nonmaterial depreciation” refers to Xactimate software's calculation of depreciation of labor costs, overhead and profit or other nonmaterial items (excluding sales tax).
Individuals who received a notice about this settlement are likely class members. However, the settlement administrator will confirm eligibility by reviewing American Family’s records and the class member's claim form information.
Who is excluded from the class?
- Policyholders whose claims arose under policy forms, endorsements or riders that expressly permit nonmaterial depreciation by using the words “depreciation” and “labor”
- Claims related to roof damage under a residential American Family roof surface payment endorsement that American Family Insurance paid by schedule (i.e. not by deducting depreciation)
- Policyholders who received actual cash value payments that exhausted the applicable insurance limits
- Policyholders whose claims American Family denied or abandoned without an ACV payment for any reason other than the withholding of nonmaterial depreciation, causing the loss to drop below the deductible.
- Policyholders for whom American Family did not generate an Xactimate estimate
How much can class members get?
- For covered structural loss claims made between Nov. 2, 2019, and Nov. 4, 2022 (except for Homesite policies): Class members can receive 100% of the nonmaterial depreciation American Family withheld from ACV payments and did not subsequently pay or that would have resulted in an ACV payment but for the withholding plus simple interest at 4.75% per year from Jan. 1 of the year the loss was reported through Jan. 1, 2025.
- For claims made between June 24, 2018, and Nov. 1, 2019, or under a Homesite policy during the class period: Class members can receive 50% of the nonmaterial depreciation American Family withheld from ACV payments and did not subsequently pay or that would have resulted in an ACV payment but for the withholding plus simple interest at 4.75% per year from Jan. 1 of the year the loss was reported through Jan. 1, 2025.
If American Family subsequently paid the nonmaterial depreciation, class members are eligible for a flat payment based on the amount of nonmaterial depreciation:
- $1-$5,000.99: $10
- $5,001-$10,000.99: $20
- $10,001-$20,000.99: $40
- $20,001-$40,000.99: $80
- $40,001-$60,000.99: $120
- $60,001-$80,000.00: $160
- Greater than $80,000.00: $200
How to claim a class action rebate
Class members must complete the online claim form or download, print, complete and mail the PDF claim form to the settlement administrator The claim deadline is Dec. 1, 2025.
Settlement administrator's mailing address: Zubia v. American Family Administrator, P.O. Box 2734, Portland, OR 97208-2734
Class members who had multiple covered losses during the class period must submit a separate claim form for each loss.
What proof or documentation is required to submit a claim?
- Claimants must fill out all required sections of the claim form, including information about the insured party, policy number, claim number and details of the loss.
- If the policyholder is deceased or incapacitated, the legally authorized representative must provide documentation.
- If the claim was assigned to another party, the claimant must provide a copy of the assignment contract.
After submission, class members will receive a letter informing them if they qualify for a payment or explaining why they don't.
Payout options
- Paper check
Settlement fund breakdown
The settlement fund includes.
- Settlement administration costs: To be determined
- Attorneys' fees and expenses: Up to $2,400,887.50
- Service awards to class representatives: Up to $7,500 each ($15,000 total)
- Payments to class members: The remainder of the fund
Important dates
- Deadline for exclusion: Sept. 17, 2025
- Final approval hearing: Oct. 17, 2025
- Deadline to file a claim: Dec. 1, 2025
When is the American Family Mutual Insurance payout date?
The settlement administrator will mail payments to eligible class members approximately 20 to 50 days after the court grants final approval and resolves any appeals.
Why did this class action settlement happen?
The class lawsuit alleged American Family Insurance improperly deducted nonmaterial depreciation from certain Arizona property insurance claims, reducing the actual cash value payments to policyholders.
American Family denied wrongdoing but agreed to settle to avoid the costs and risks of continued litigation.
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