AAA Class Action Lawsuit
AAA allegedly sold motorist insurance coverage without clearly warning it could be reduced or denied, making benefits misleading or effectively worthless.
What happens next with the AAA settlement
The claim deadline passed on April 27, 2026. New claims for this settlement are no longer being accepted.
Payments come after approval, and after any appeals. Anyone who objected to the settlement can ask a higher court to look at it again — an appeal — and that has to finish first. Eligible payments are sent once approval is final, and the stretch from a claim deadline to money in hand often runs a year or more. It varies from one settlement to the next.
Filed this claim with Chimo? The status of your claim is on the claims page in your account.
Settlements you can still claim in November 2026
Visa & Mastercard
$380
Wayne Memorial Hospital
$25
Jefferson-Blount-St. Clair Mental Health Authority
$100
AAA Class Action Lawsuit
Joshua Smith sued AAA (the Interinsurance Exchange of the Automobile Club) on May 4, 2022, in New Mexico’s Second Judicial District Court in Bernalillo County, saying it sold UM/UIM coverage that could be reduced or denied through a “Schmick offset” without clearly disclosing that limit. AAA removed the case to the United States District Court for the District of New Mexico (Case No. 1:22-cv-00447-WJ-JMR). AAA denies the claims, and the court did not decide who was right.
The AAA Motorist Insurance lawsuit asserted negligence, negligent misrepresentation, unjust enrichment, breach of the covenant of good faith and fair dealing, reformation of the policy, and violations of New Mexico’s Unfair Trade Practices Act and Unfair Insurance Practices Act. The complaint argued that policyholders were not adequately informed that UIM benefits might effectively be unavailable if the at-fault driver carried minimum insurance.
After litigation and mediation, the parties signed a settlement agreement on November 18, 2025—about 3.5 years after filing—with AAA agreeing to a $4.15 million fund. Class counsel included Kedar Bhasker, Corbin Hildebrandt, Geoffrey Romero, and Andrea Harris. The settlement resolves claims for affected policyholders between 2010 and 2022.
AAA Class Action Settlement - $4,150,000
The latest AAA Motorist Insurance settlement update confirms a $4,150,000 fund resolving claims that AAA failed to clearly disclose how UIM benefits could be reduced or denied. The AAA Motorist Insurance lawsuit settlement amount is split between two groups, with a capped pool of $1.4M specifically reserved for offset claims.
Under AAA Motorist Insurance settlement eligibility, you qualified if:
- You had a UIM claim reduced after an accident between 2010 and 2022.
- You paid premiums for UM/UIM coverage during that period.
Eligible class members whose UIM claim was reduced could claim up to $25,000 (subject to pro rata reduction). Eligible class members who did not make that claim were to receive a pro rata premium refund, based on the UM/UIM premiums they paid, with no claim required.
A standout detail: claims were validated against AAA’s internal data, which limited fraud but also meant only recorded claims qualified. Appeals required a $50 fee, refunded if successful.
Claims closed: April 27, 2026
Motorist Insurance Class Action Payout: Up to $25,000
The AAA Motorist Insurance settlement amount per person depended on which group an eligible class member was in. If you’re wondering how much could I get from the AAA Motorist Insurance lawsuit, payouts fell into two groups:
- Offset claimants: Eligible class members could receive one payment of up to $25,000, reduced pro rata if valid offset claims added up to more than the $1.4M pool.
- Premium refund group: Eligible class members who did not make an offset claim could receive a pro rata share of the premium refund fund, based on the UM/UIM premiums they paid from 2010 to 2022.
Payout range: Offset payments were capped at $25,000 each. The settlement sets no per-person amount for premium refunds, which depend on premiums paid and on what is left in the fund after fees, costs, and offset payments.
AAA Motorist Insurance settlement payout date: Payments are made to eligible claimants after final approval. Approved offset claimants were to be paid by check with their notice of determination, within 30 days of the effective date, and premium refunds were to follow later.
AAA Motorist Insurance Payout Timeline
Stage
What Happens
Estimated Timing
Final Fairness Hearing
Court decides whether to approve the settlement
Date set by separate court order
Final Judgment & Appeal Window
Approval entered, plus time for appeals
After the final approval hearing
Effective Date
Settlement becomes final after appeals period
After the time for appeals has passed
Offset Claim Payments
Payments of up to $25,000 to approved offset claimants
Within 30 days of the effective date
Premium Refund Payments
Pro rata refunds to eligible class members, with no claim needed
Later of 210 days after the effective date or 45 days after the refund fund is set
Misleading Coverage Class Action Payouts
Motorist Insurance Class Action Eligibility
Understanding AAA Motorist Insurance class action eligibility was straightforward because the claim process relied on AAA’s internal records—not detailed documentation from you.
What AAA Motorist Insurance class action claimants were actually asked:
- They gave their name, address, and contact details.
- They gave the date of their accident (the date of loss).
- They certified that they had submitted a UIM claim that was reduced (“offset”) during the class period.
Requirement
Why It Matters
UIM claim submitted
Confirms eligibility for compensation
Claim reduced by offset
Core issue in the lawsuit
Date between 2010 and 2022
Must fall within the class period
FAQ
It’s a rule from the New Mexico Supreme Court’s reading of the state’s UM/UIM statute: the at-fault driver’s liability coverage is subtracted from your UIM limits, so a minimum-limits UIM policy could pay nothing.
No—AAA’s internal records were used to verify claims, so most claimants didn’t need to upload proof.
The settlement set aside $1.4M for offset claims. If valid offset claims added up to more than that, each $25,000 offset payment was to be reduced proportionally (pro rata).
No. Under the settlement, a class member who received a $25,000 offset payment is not entitled to a premium refund. Eligible class members could receive one or the other, not both.
Claimants could appeal the decision, but it required a $50 fee (refunded if they won).
No. Under the settlement, eligible class members who paid UM/UIM premiums from 2010 to 2022 and did not make an offset claim were to receive a pro rata premium refund without filing a claim.
After a claim was submitted, the settlement administrator checked it against AAA’s business records to confirm that the claimant made a qualifying UIM claim during the class period. The form also required claimants to certify under penalty of perjury that the information was true and that their claim was reduced by the at-fault driver’s insurance payment, which helps screen out inaccurate or false submissions.
Sources
These are the court's own records for this case. They are hosted here unchanged, so you can check anything on this page against the documents themselves.
- Order Preliminarily Approving Settlement and Approving Notice to Settlement Class Members (PDF) Court order · Filed December 15, 2025 · United States District Court for the District of New Mexico · Case 1:22-cv-00447-WJ-JMR
The full case file is on the court docket: view the docket.