MetLife $1.2 Million Settlement for Underinsured Motorist Coverage Offsets in New Mexico

In New Mexico, underinsured motorist (UM/UIM) coverage is meant to help policyholders when the driver at fault has not provided enough liability insurance to fully cover the damages. The MetLife class action alleges that, between October 1, 2010, and January 31, 2022, Metropolitan Direct Property and Casualty Insurance Co. improperly limited or “offset” UM/UIM payments—specifically by reducing a claim by the amount the at-fault driver paid—and in some cases allegedly failed to clearly disclose these limitations when selling or servicing policies. As a result, an estimated 27,000 current or former policyholders may have received less than they believed their coverage entitled them to, while other purchasers may be eligible for a partial premium refund. The lawsuit was filed to challenge those alleged misrepresentations and the way offsets were applied, raising claims such as breach of contract, negligence, unfair trade practices, and violations of New Mexico state law. Its significance is that it provides a defined pathway for affected policyholders to seek compensation through a settlement rather than individual litigation: offset subclass members can claim up to $25,000 (with a total cap of $360,000 for those cash payments), and premium refund class members may receive a partial refund automatically based on the premiums paid. This kind of dispute also fits a broader pattern in the insurance industry, where UM/UIM coverage rules and offset practices are tightly connected to state insurance statutes and consumer-protection requirements—issues that frequently surface in similar lawsuits when insurers’ benefit calculations and disclosure language differ from what policyholders reasonably understood under the law and policy terms.