Liberty Mutual has faced multiple class action lawsuits across several states for failing to pay or fully remit required fees and taxes when settling total loss vehicle claims with policyholders. These omitted fees—which include title transfer fees, sales taxes, and vehicle registration costs—are mandated by state law and represent the insurance company’s responsibility to pay in full when calculating the Actual Cash Value (ACV) of a totaled vehicle. When Liberty Mutual withheld these required payments, thousands of policyholders were left shortchanged on their insurance settlements, unable to complete the vehicle transfer process or cover legitimate state-imposed costs.
The scope of these failures was significant enough to trigger class action litigation in Colorado, Florida, and New Mexico, each resulting in substantial settlements. For example, in Florida’s Glover v. LM General Insurance Company case, class members were entitled to receive $85.25 in unpaid title and registration transfer fees, plus prejudgment interest calculated at 5.46% per annum. These settlements acknowledge that Liberty Mutual’s systematic approach to calculating total loss payouts violated state insurance regulations designed to protect consumers.
Table of Contents
- What Are Required Fees in Liberty Mutual Total Loss Claims?
- The Colorado Trudgian Settlement and State Law Violations
- Florida’s Glover Settlement and Registered Trademark Issues
- New Mexico Underinsured Motorist Settlement and Broader Claim Issues
- Documentation Requirements and Claim Verification Challenges
- How These Settlements Were Discovered and Resolved
- What This Means for Current and Future Policyholders
- Conclusion
What Are Required Fees in Liberty Mutual Total Loss Claims?
When an insurance company settles a total loss claim, they are obligated under state law to pay not just the vehicle’s value, but also the associated costs required to transfer ownership and register a replacement vehicle. These mandatory fees vary by state but typically include title transfer fees, sales taxes, and vehicle registration costs. Colorado law explicitly requires that Liberty Mutual “pay title fees, sales tax, and any other transfer or registration fee associated with the total loss of a motor vehicle” when settling claims.
These aren’t optional add-ons—they’re legal requirements built into the insurance settlement process. The problem arose because Liberty Mutual calculated ACV without including these legally mandated fees. A policyholder in Colorado might receive a settlement check for $8,000 for their vehicle, but if the actual title transfer and registration fees totaled $200, they were short by exactly that amount. The insurance company’s calculation appeared complete on paper, but it left the consumer unable to properly complete the transfer process or forced them to pay these fees out of pocket when the law required the insurer to cover them.
The Colorado Trudgian Settlement and State Law Violations
The Colorado class action, Barbara Trudgian v. The Liberty Mutual insurance Company (Case No. 2019-cv-30732), filed in February 2019, became one of the first major cases challenging this practice. The settlement established an official website (libertymutualtotallosssettlement.com) to notify affected policyholders and process claims.
What made this case particularly significant was that Colorado had clear statutory language requiring full payment of these fees, yet Liberty Mutual had continued the practice of omitting them from settlements. However, a critical limitation of this settlement is that it only applies to Colorado residents. Policyholders in other states had to pursue separate legal action to recover similar omissions. The settlement timeline also matters: those who had claims settled years before the lawsuit was filed in 2019 may have already moved on or lack proper documentation. Additionally, the claim verification process required policyholders to provide proof of their total loss settlement, which some consumers may not have retained, effectively limiting who could actually collect even after the settlement was reached.
Florida’s Glover Settlement and Registered Trademark Issues
In Florida, the case Lessie Glover v. LM General Insurance Company (Case No. 2020-022973-CA-01) addressed the same issue with LM General, which is Liberty Mutual’s Illinois-based wholly-owned subsidiary.
The settlement entitled class members to $85.25 per claim for unpaid title and registration (tag) transfer fees, plus prejudgment interest at 5.46% simple per annum. Unlike some settlements that offer flat payments regardless of actual damages, this Florida settlement specifically calculated the typical title transfer and registration costs in that state. The defendant’s allegation—that they refused to pay the full Actual Cash Value including state and local title transfer and vehicle registration fees—documented a deliberate practice rather than isolated errors. A policyholder with a totaled 2014 Honda Civic might have received $6,500 in ACV from Liberty Mutual, yet when they went to transfer the title, Florida’s fees would amount to $85.25 or more, meaning the insurance company knowingly underpaid by that amount across potentially thousands of claims.
New Mexico Underinsured Motorist Settlement and Broader Claim Issues
Beyond the total loss fee cases, Liberty Mutual also faced a separate major class action in New Mexico involving underinsured motorist (UIM) claims. The Crutcher case resulted in a $6.5 million total settlement, with up to $2 million allocated for offset claims on underinsured motorist claims reduced between October 1, 2010, and March 31, 2022. Class members could receive up to $25,000 in individual payouts, and some were eligible for partial premium refunds on UM/UIM coverage purchased during the class period.
This settlement represents a different but related problem: Liberty Mutual systematically reduced UIM benefits when calculating injury settlements, which is prohibited under state law. The comparison between the three settlements reveals a pattern: Liberty Mutual wasn’t making one-off mistakes but rather implementing systematic practices that undercut consumer protections. The New Mexico deadline for filing claims was April 30, 2026, which has now passed, meaning anyone who missed that date cannot recover through that settlement mechanism.
Documentation Requirements and Claim Verification Challenges
One of the most significant practical hurdles in these settlements is the documentation requirement. Policyholders must provide their original settlement documents to prove they were part of the affected class. For people who settled claims years ago—sometimes a decade or more before the settlements were reached—locating these documents can be difficult. Insurance companies typically don’t provide easy access to historical claim files without formal requests, and some policyholders may have discarded paperwork thinking it was no longer needed.
A critical warning: missing the claim deadline completely eliminates your ability to recover, regardless of whether you were eligible. The New Mexico UIM settlement already passed its April 30, 2026 deadline. The Colorado and Florida total loss settlements do not have published expiration dates on the publicly available information, but all class action settlements eventually close. Waiting too long to file a claim is the most common reason eligible consumers never recover compensation, even when they are legally entitled to it.
How These Settlements Were Discovered and Resolved
Class action lawsuits against Liberty Mutual for these fee omissions typically originated when individual policyholders discovered discrepancies between what they were paid and what the law required. The Trudgian case in Colorado gained traction because Colorado’s statutory language was unambiguous—the law explicitly required these fees to be paid.
Once one plaintiff’s attorney documented the pattern across multiple cases, the systematic nature of the practice became clear, supporting certification of a class action. Settlement negotiations in these cases resulted in the defendant (Liberty Mutual or its subsidiaries) establishing claim processes, creating dedicated settlement websites, and funding the distribution pool without admitting wrongdoing. This is typical of many insurance class actions where the defendant agrees to settle to avoid trial while maintaining they didn’t violate the law.
What This Means for Current and Future Policyholders
These settlements represent important wins for consumer protection, but they also highlight an ongoing question: has Liberty Mutual actually changed its practices going forward? While the settlements address past violations, policyholders who have total loss claims in 2026 or later need to verify that Liberty Mutual is now paying the full amount required by their state’s law. The existence of these settlements suggests the company was aware of its legal obligations but failed to meet them, raising concerns about whether policy changes have truly taken effect company-wide.
For future policyholders, the lesson is clear: review your total loss settlement carefully and compare it to your state’s requirements for title and registration fees. If you live in Colorado, Florida, or New Mexico, you may have the right to claim compensation through these specific settlements. For other states, if you suspect you were underpaid, consulting with a consumer protection attorney who specializes in insurance disputes is advisable before the statute of limitations expires.
Conclusion
Liberty Mutual’s class action settlements related to total loss payment omissions and unpaid required fees demonstrate a significant failure to comply with state insurance regulations. Across Colorado, Florida, and New Mexico, the company either failed to pay or underpaid legally required title transfer fees, registration fees, and taxes that should have been included in total loss settlements. The Colorado Trudgian settlement, the Florida Glover settlement providing $85.25 per claim plus prejudgment interest, and the New Mexico Crutcher UIM settlement totaling $6.5 million collectively represent millions of dollars in compensation to affected policyholders.
If you had a total loss claim settled by Liberty Mutual in Colorado, Florida, or New Mexico, check whether you’re eligible to file a claim through these settlements before deadlines pass. For policyholders in other states or with UIM-related disputes, these settlements serve as a reminder to carefully verify your insurance payouts against state law requirements. Class action settlements like these only help those who actively file claims, so taking action now is essential if you believe you were underpaid.
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