Travelers UIM Settlement Refund Offers 29% for Illusory Underinsured Coverage Claims

This class action stems from allegations that Travelers Indemnity Company sold auto insurance in New Mexico that included underinsured motorist (UIM) coverage but, in practice, did not provide what policyholders reasonably believed they were paying for. Specifically, the lawsuit claimed Travelers used a “Schmick offset” to reduce UIM benefits—an approach that can affect how much a driver or passenger receives when the at-fault party’s insurance is insufficient. The case focused on Travelers policyholders who had UIM coverage between January 1, 2015 and August 16, 2022, including passengers and authorized drivers under those policies, even if they never previously filed a UIM claim. The lawsuit was filed to challenge those alleged practices as violations of New Mexico insurance requirements and consumer-protection principles, arguing that the coverage was “illusory” or misleading and that the offset was improperly applied. Its significance is reflected in the settlement structure: qualified class members can receive a premium-refund offer of 29% of the UIM premiums paid to Travelers during the class period, or—if a prior UIM claim was reduced with the Schmick offset—ask for reevaluation without that offset. Broader implications extend beyond one insurer, because similar UIM disputes can hinge on how insurers calculate benefits and comply with state rules on policy terms and reasonable coverage expectations, an area where regulations and court interpretations can materially change outcomes for accident victims; in this settlement, the claim deadline is September 27, 2026, and the process includes an opt-out deadline of June 29, 2026, with final approval scheduled for July 29, 2026