Sounds like a victory for the beleaguered consumer over a greedy corporation, right? Maybe not. On one hand, customers claim they were cheated by the company’s thrift. On the other, State Farm’s tight-fisted approach appears to have saved its customers by keeping costs down. What it all comes down to, says TIME legal correspondent Adam Cohen, is what the policyholder could reasonably have expected when he or she signed up. "When you take out auto insurance, you’re entering into a contract with the company, and you should be able to assume that your car will receive the standard level of service if and when it ever needs it." The Illinois case found that the standard level is original-manufacturer equipment. However, in three states — Massachusetts, New York and Hawaii — attempts to control auto insurance costs led to a measure actually requiring auto mechanics to use less expensive replacement parts "of like kind and quality" whenever they’re available. That's the right kind of neighbor for State Farm.
So much for being a good neighbor. On Monday, an Illinois jury awarded $456 million to State Farm policyholders because the insurance giant requires auto body shops to use less expensive, generic parts in accident repairs rather than the "genuine replacement" items made by auto manufacturers. The plaintiffs claimed that the cost-cutting measure decreases their cars' resale value and could compromise safety. While State Farm’s lawyers say they will appeal the verdict — and possible additional punitive penalties — the plaintiffs' lawyers say they are set to go forward with similar suits against Nationwide, Allstate and Geico.