Originally published on OpenClassActions.com
A $6.5 million class action settlement has been reached with Liberty Mutual and Safeco over allegations that they sold “illusory” uninsured/underinsured motorist (UM/UIM) coverage to New Mexico auto insurance policyholders. If you had a Liberty Mutual or Safeco auto policy with UM/UIM coverage in New Mexico between October 1, 2010 and March 31, 2022, you may be entitled to up to $25,000 or an automatic premium refund.
Settlement Amount: $6,500,000 | Claim Deadline: April 30, 2026 (offset subclass) | Payout: Up to $25,000 | Premium Refunds: Automatic
What Is This Settlement About?
In New Mexico, the law requires every driver to carry at least $25,000 in liability insurance and at least the same amount in uninsured/underinsured motorist (UM/UIM) coverage. Most people assume that if they buy UIM coverage, they will get extra protection if they are hit by a driver who does not have enough insurance to cover their injuries.
However, because of the way New Mexico insurance law works under what is called the “Schmick offset rule,” if you carry the minimum $25,000 in UIM coverage and the at-fault driver also carries the minimum $25,000 in liability insurance, your insurance company subtracts what the other driver’s insurance paid from your UIM benefits. The result: $25,000 minus $25,000 equals zero. You paid premiums for UIM coverage that can never actually pay out in the most common accident scenario.
The New Mexico Supreme Court ruled that this type of minimum-limits UIM coverage is “illusory” — it misleads average consumers into thinking they have protection they cannot actually use. The court said insurance companies must clearly disclose this limitation to policyholders. The lawsuit alleged that Liberty Mutual and Safeco collected premiums for this illusory coverage without ever properly explaining the limitation. Liberty Mutual and Safeco deny any wrongdoing.
Who Is Eligible?
You qualify if you had an automobile insurance policy with Liberty Mutual Insurance Company, any of its affiliates, or Safeco Insurance Company of America that included uninsured/underinsured motorist (UM/UIM) coverage in New Mexico at any time between October 1, 2010 and March 31, 2022. You also qualify if you filed a claim for UIM benefits during that same period.
This settlement is for New Mexico policyholders only.
Two Settlement Groups — Which One Are You?
Offset Subclass (Claim Form Required)
If Liberty Mutual or Safeco reduced or denied your UIM claim because of an “offset” — meaning they subtracted what the other driver’s insurance paid from your UIM benefits — you need to file a claim form by April 30, 2026. You can receive up to $25,000. You must certify under penalty of perjury that your UIM claim was reduced and provide the date of the accident.
Premium Refund Subclass (Automatic — No Filing Needed)
If you simply paid premiums for UM/UIM coverage during the class period but never had a UIM claim reduced or denied, you do not need to do anything. Your payment will be sent to you automatically based on the premiums you paid. No claim form is required. The exact amount is calculated by dividing the total premiums you paid by the total direct premium refund fund.
If your mailing address or email has changed since you had the policy, contact the settlement administrator to make sure they can reach you.
How Much Can You Receive?
- Offset Subclass: Up to $25,000 per person (claim form required by April 30, 2026)
- Premium Refund Subclass: Automatic proportional refund of UM/UIM premiums paid (no filing needed)
The total settlement fund is $6,500,000. Up to $2,000,000 is allocated for offset claims. If total offset subclass claims are less than $2 million, the leftover money gets added to the premium refund fund, which means bigger automatic refund checks for everyone else.
Which Insurance Companies Are Covered?
This settlement covers policyholders of Liberty Mutual Insurance Company, its affiliates, and Safeco Insurance Company of America. Safeco has been part of the Liberty Mutual Group since 2008. If your New Mexico auto insurance policy was issued by either company or any Liberty Mutual affiliate and included UM/UIM coverage during the class period, you may be a class member.
How to File a Claim (Offset Subclass)
If you are in the offset subclass (your UIM claim was reduced or denied), you must file a claim form by April 30, 2026. You can file online at the settlement website or download and print the PDF claim form and mail it to:
Crutcher v. Liberty Mutual Insurance Co. et al.
Settlement Administrator
P.O. Box 5338
Portland, OR 97228-5338
Your claim form must include a certification under penalty of perjury that Liberty Mutual, its affiliates, or Safeco reduced your UIM claim by the amount the at-fault driver’s insurer paid, the date of the crash or loss, and your signature.
Visit OpenClassActions.com for full details and claim links.
Important Dates
- Claim Deadline (Offset Subclass): April 30, 2026
- Premium Refunds (Automatic): No filing needed — payments processed after final approval
- Class Period: October 1, 2010 – March 31, 2022
What Happens If I Do Nothing?
If you are in the premium refund subclass and do nothing, you should still receive an automatic payment. If you are in the offset subclass and do nothing, you will not receive a payment for your reduced UIM claim. In either case, you will remain a class member and give up your right to sue Liberty Mutual or Safeco over these same claims.
Case Information
| Case | Crutcher v. Liberty Mutual Insurance Co. et al., Case No. 1:18-cv-00412 (D.N.M.) |
| Court | U.S. District Court for the District of New Mexico |
| Judge | Honorable Judith C. Herrera |
| Settlement Fund | $6,500,000 |
| Defendants | Liberty Mutual Insurance Co., Liberty Mutual affiliates, Safeco Insurance Company of America |
| Offset Subclass Fund | Up to $2,000,000 (up to $25,000 per person) |
| Premium Refund Fund | Remaining balance distributed pro rata as automatic premium refunds |
Do I need to file a claim for the Liberty Mutual settlement?
It depends. If your UIM claim was reduced or denied because of an offset, you must file a claim form by April 30, 2026. If you simply paid premiums for UM/UIM coverage, your refund is automatic and no filing is needed.
How much money will I get from the Liberty Mutual settlement?
Offset subclass members can receive up to $25,000. Premium refund subclass members will receive an automatic proportional refund based on the premiums they paid during the class period.
Is this settlement open to all states?
No. This settlement is for New Mexico policyholders only. You must have had a Liberty Mutual or Safeco auto policy with UM/UIM coverage in New Mexico between October 1, 2010 and March 31, 2022.
What is “illusory” UIM coverage?
Illusory UIM coverage means the coverage appears to provide protection but cannot actually pay out in common scenarios. When both drivers carry minimum coverage ($25,000), the offset rule means $25,000 minus $25,000 equals zero — so the UIM coverage you paid for provides no benefit. The New Mexico Supreme Court ruled this type of coverage misleads consumers.
What is the deadline to file a claim?
The deadline for offset subclass claims is April 30, 2026. Premium refund subclass members do not need to file — payments are automatic. Visit OpenClassActions.com for full details.
Sources:
- OpenClassActions.com — Liberty Mutual / Safeco Settlement
- Court-authorized settlement notice (reviewed March 2026)
By Steve Levine | Published: March 9, 2026
Please submit only truthful information. Filing a fraudulent claim is subject to penalties of perjury. OpenClassActions.org is a consumer news site and is not a settlement administrator or a law firm.