Smith v. Interinsurance Exchange of the Automobile Club, aka AAA

A class action is a lawsuit in which one or more individuals bring claims on behalf of other persons or entities. These persons or entities are referred to as a class or class members. In a certified class action, the Court resolves certain issues, legal claims, and/or defenses for all class members in a single action, except for those persons or entities who ask in writing to be excluded from the class.

The plaintiff alleges that AAA breached its automobile insurance policy contracts, was negligent, unjustly enriched, breached the duty of good faith and fair dealing, engaged in negligent misrepresentation, violated the New Mexico Unfair Trade Practices Act, violated the New Mexico Unfair Insurance Practices Act, and thus seeks damages, reformation of automobile insurance policy contracts, declaratory judgment, and injunctive relief for AAA failing to properly advise Plaintiff and other New Mexico insureds that any amounts payable on an underinsured motorist claim are required by law to be reduced, or “offset”, by amounts the insured received from the insurer of the driver who was at fault for the auto accident. AAA maintains that it complied with the terms of the automobile insurance policies and applicable law and denies that it acted wrongfully or unlawfully and continues to deny all material allegations.

1. The Settlement Terms of this class action include the following: Pay timely, valid claims submitted by Settlement Class Members who had an underinsured motorist claim reduced or “offset” by the amount paid by the at-fault driver in an accident between January 1, 2010 through May 4, 2022. These persons are referred to as “Offset Subclass Members.” Offset Subclass Members who submit a timely, valid claim will receive up to $25,000 for the claim. This amount may be reduced, pro rata, if the number of claims exceeds the amount set aside to pay these claims;

2. Pay all other Settlement Class Members who purchased UM/UIM motorist coverage between January 1, 2010 through May 4, 2022, a partial premium refund. The amount of the refund will be determined by the amount the Settlement Class Member paid in UM/UIM premiums during the Class Period, the cost of administering the Settlement Fund, the amount approved by the Court to pay Plaintiff’s attorneys’ fees, costs, and an Incentive Compensation Award to the Plaintiff, and the amount remaining, if any, of the portion of the Settlement Fund designated for payments to Offset Settlement Class Members;

You are a member of the Settlement Class against Defendant if you either: 1) had an underinsured motorist claim reduced or “offset” by the amount paid by the at-fault driver in an accident between January 1, 2010 through May 4, 2022, or 2) purchased a New Mexico automobile insurance policy containing UM/UIM motorist coverage between January 1, 2010 through May 4 , 2022.

Option 1: Submit a Claim Form for Payment

You may submit a Claim Form for payment of up to $25,000, if you submitted an underinsured motorist coverage claim from January 1, 2010 through May 4, 2022 that was reduced, or “offset,” by the amount you received from the insurer of the at-fault driver. NOTE, if the driver of the vehicle that was at-fault in the accident had no liability insurance, then you had an uninsured motorist coverage claim, not an underinsured motorist claim, and you are not eligible for payment under this option. You can submit a claim on this website by navigating to the Submit A Claim page or by printing a claim form found on the Documents Page, signing the Claim Form and mailing to this address:

You can call 1-877-268-1879 and request that the Settlement Administrator send you a Claim Form as described above.

If you submit a Claim Form, it must be postmarked no later than April 29, 2026. If the address you submit on your Claim Form changes up until 60 days after the Effective Date of the Settlement, you must contact the Settlement Administrator to provide a current address or you may not receive your Settlement Class Member Payment.

All claims will be verified by referencing AAA’s business records. Only valid claims will be paid. Knowingly submitting a false claim is a violation of federal law.

Option 2: Do Nothing.

If you do not submit a claim related to an accident during the class period, but you purchased a New Mexico automobile insurance policy with UM/UIM coverage during that period, you will automatically receive a check in the mail. The amount of that check will be based upon a portion of the total UM/UIM premiums you paid during the period, the number of class members, and the amount of the Settlement Fund available after paying claims under Option 1, attorneys’ fees, Incentive Compensation Award, and costs of Settlement Administration.

Option 3: Exclude yourself from the Settlement.

You have the right to not be part of the Settlement by excluding yourself or “opting out” of the Settlement Class. If you wish to exclude yourself, you must do so on or before March 30, 2026, as described below. You do not need to hire your own lawyer to request exclusion from the Settlement Class. If you exclude yourself from the Settlement Class, you give up your right to receive any benefits as part of this Settlement, and you will not be bound by any judgments or orders of the Court, whether favorable or unfavorable. However, you will keep your right to sue any AAA separately in another lawsuit if you choose to pursue one.

To exclude yourself from this lawsuit and/or preserve your right to bring a separate case, you must make a request to be excluded in writing and, with sufficient postage, mail the request to:

A request for exclusion must be postmarked on or before March 30, 2026.

Your request for exclusion must contain the following:

1. The name of the Action (Smith v. Interinsurance Exchange of the Automobile Club);

2. Your full name;

3. Your current address;

4. A clear statement that you wish to be excluded from the Settlement Class, such as: “I request exclusion from the Settlement Class”; and

5. Your signature.

The Settlement Administrator will file your request for exclusion with the Court. If you are signing on behalf of a Settlement Class member as a legal representative (such as an estate, trust or incompetent person), please include your full name, contact information, and the basis for your authority. A request for exclusion must be exercised individually and not on behalf of a group.

IF YOU DO NOT EXCLUDE YOURSELF FROM THE SETTLEMENT CLASS BY THE POSTMARK DEADLINE OF MARCH 30, 2026. YOU WILL REMAIN PART OF THE SETTLEMENT CLASS AND WILL BE BOUND BY THE ORDERS OF THE COURT IN THIS LAWSUIT AND BY THE TERMS OF THE SETTLEMENT IF IT IS APPROVED BY THE COURT, EVEN IF YOU DO NOT SUBMIT A CLAIM FORM FOR PAYMENT. IF YOU DO NOT WISH TO BE BOUND BY DECISIONS OR SETTLEMENT IN THIS CASE, YOU MUST REQUEST EXCLUSION FROM THE CLASS ACTION.

Option 4: Object to the Terms of the Settlement.

If you think the terms of the Settlement are not fair, reasonable, or adequate to the Class Members, you may file a Notice of Intent to object to the terms of the Settlement. If you object to the terms of the Settlement, you cannot request exclusion from the Settlement. If you object to the terms of the Settlement and your objection is overruled, you will be bound by the terms of the Settlement and all rulings and orders from the Court.

To properly object to the terms of the Settlement, you must send, with sufficient postage, a Notice of Intent to object to the terms of the settlement and to appear at the Fairness Hearing (described below) to the following:

The Notice of Intent must include all of the following information:

1. The name of the case and case number;

2. Your name, address, telephone number, email address (if any) and signature;

3. The specific reasons why you object to the terms of the Proposed Settlement;

4. A written statement of all grounds for objection, accompanied by any legal support you care to submit;

5. The name, address, bar number, and telephone number of any attorney who represents you related to your intention to object to the terms of the Settlement;

6. A list of all persons who will be called to testify at the Final Fairness Hearing in support of the objection;

7. A statement confirming whether you and/or your attorney intend to personally appear and/or testify at the Final Fairness Hearing; and

8. Your signature, or the signature of any attorney representing you.

Notices of Intent to object must be postmarked by March 30, 2026. Any Notice of Intent that is not postmarked by the deadline set forth above or which does not comport with the requirements listed above may waive the right to be heard at the Final Fairness Hearing. If you file a Notice of Intent, you waive the right to request exclusion from the Settlement Class and will be bound by any decisions and orders from the Court and by the terms of the Settlement if it is approved by the Court. If you do not want to be bound by the decisions and rulings by the Court, you must file a request for exclusion and not a Notice of Intent.

If the postcard notice you received included a Unique ID and PIN, you submitted an underinsured motorist coverage claim from January 1, 2010 through May 4, 2022 that was reduced, or “offset,” by the amount you received from the insurer of the at-fault driver, and you are entitled to file a claim. If you did not receive a Unique ID and PIN, you are eligible for a pro rata payment for a portion of your premium and do not need to do anything to receive a check. If you did not receive a Unique ID and PIN but believe you should have, you may print out a copy of the claim form and submit it by mail.

The Court has preliminarily approved Plaintiff Joshua Smith to be the Class Representative of the Settlement Class. The Court has also preliminarily appointed the following lawyers as Class Counsel for the Settlement Class.

Class Counsel will file an application for attorneys’ fees of $1,383,195.00 and no more than $5,000.00 in costs.

As a part of the Settlement, Class Members agree not to sue AAA for any claims premiums charged for UM/UIM coverage during the class period, any claims disputing the value of UM/UIM coverage or premiums based on or relating to the Schmick offset (which is reducing underinsured motorist coverage benefits by the amount available from the at-fault driver’s liability insurance) or New Mexico being a “gap theory” state with respect to the payment of UIM benefits, any and all claims related to or arising out of UIM benefits being reduced or denied due to a Schmick offset, any and all claims for penalties arising from or relating to late payment, non-payment, or underpayment of benefits for UM/UIM claims, and any and all claims arising from or relating the charging of premiums for Underinsured and Uninsured Motorist insurance coverage. Full terms of the Released Claims and Released Parties can be found in the proposed Settlement Agreement and Release on the Documents page of this website.

If you have any questions, you can review the rest of this website, including the Documents page. You can also contact the Settlement Administrator at 1-877-268-1879. You also may contact Class Counsel, whose contact information and websites are provided above.

PLEASE DO NOT CONTACT THE COURT, THE COURT CLERK’S OFFICE, OR DEFENDANT TO INQUIRE ABOUT THIS SETTLEMENT OR THE CLAIM PROCESS.