On September 13, 2012, Sommers Schwartz attorneys Jason Thomson and Lance Young settled a nationwide class action insurance dispute against Allstate on behalf of policyholders whose covered property damage claims were previously underpaid. The plaintiffs, two Michigan Allstate policyholders, claimed that their insurance contracts and even Allstate’s website indicated that the company would pay covered losses using the conventional measure of “actual cash value,” which is the replacement cost of the damaged property less an appropriate deduction for depreciation. In some instances and in some states, Allstate did that. In other cases, for example in cities where real-estate values were depressed, Allstate used real-estate appraisals as the sole means of valuing the loss. As a result, people living in neighborhoods where real estate values were depressed received less than they should have and many of these policyholders could not afford to rebuild their homes.An Illinois State Court Judge granted final approval of the 38-state settlement, which covers more than 13,000 Allstate policyholders who sustained covered losses during the past 20 years. Under the settlement, each class member had the opportunity to file a claim and attest whether they believe their claim was undervalued. Those that attached a copy of the real estate appraisal to their claim form received 20% of the difference between the appraised value and their policy limits. If class members could not locate their appraisals, or weren’t sure if one was used, they still received a cash payment of up to 5.25% of the amount Allstate originally paid to settle their loss. Given the amounts involved in a typical house fire, these payments often amounted to several thousand dollars per class member.