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Liberty Personal Insurance Company intentionally bypasses automobile authorities when valuing cars, using a third-party vendor to “artificially, capriciously, and intentionally” devalue policy-holders’ vehicles, a new class action lawsuit alleges.
The class action lawsuit was filed in Louisiana on May 17 by lead Plaintiff Derrick Ursin, who alleges Liberty breached its contract with him and broke a number of state regulations in the process.
Ursin had a policy with Liberty for his 2014 Jaguar XF, the claim states. In August 2016, Ursin’s vehicle was involved in an accident and sustained damage that Liberty determined was a total-loss — meaning the company opted to replace the vehicle rather than pay for repairs.
Using third-party vendor Autosource to determine the car’s value, rather than local automobile authorities, Liberty determined that the vehicle was worth $36,431.00, to which sales tax was added and the deductible was subtracted for a total of $39,824.10, according to the class action lawsuit.
“This pre-tax amount of $36,431.00 is significantly less than value determined by ‘recognized used motor vehicle industry source’ such as NADA or KBB,” the claim states.
“For example, NADA values Defendant’s vehicle, with all optional equipment and packages, at a pre-tax amount of approximately $39,300.00.”
The claim alleges that Ursin was the victim of Liberty’s “general scheme of using arbitrary and capricious selection of some vehicles and not others,” through Autosource, as well as the “typical negotiation” adjustment – which ordered adjustments to be made to Ursin’s disadvantage, when they should have been adjusted in his favor.
The class action lawsuit says that Liberty compared Ursin’s vehicle to others from irrelevant markets or with artificially low values, while avoiding those that would have been favorable to Ursin, to arrive at an average price thousands and thousands of dollars below what an actual motor vehicle industry source would have arrived at.
Louisiana law has attempted to minimize the uncertainty surrounding total loss situations by prescribing regulatory requirements that all insurers must follow when reimbursing consumers after a total loss, the claim states. The statute requires payment of “the actual cost to purchase a comparable vehicle” and prescribes three methods by which insurers can derive such cost – two of which use retail cost as determinants.
“Louisiana requires use of ‘qualified retail’ car dealers and ‘recognized used motor vehicle industry sources’ to determine the ‘retail cost’ of comparable vehicles.”
However, the class action lawsuit alleges that Liberty’s use of third-party vendor Autosource “artificially, capriciously, and intentionally undervalues or devalues total-loss vehicles in order to pay less than the ACV amount required by its policy and Louisiana law.”
“In so doing, Defendant fails to compensate insureds for their loss and fails to pay the minimum amount required by its policy and Louisiana law.”
Ursin wants to represent Liberty policyholders in Louisiana who have suffered a total loss of their vehicles. He is suing for breach of contract and violation of state law, and seeks certification of the Class, damages, interest, legal fees and costs, and a jury trial.
Cases of auto insurance being allegedly underpaid often lead to class action lawsuits. Insurance provider GEICO is also facing a class action lawsuit for having allegedly “systematically and uniformly underpaid” thousands of consumers who suffered the total loss of their vehicle, while vehicles were insured with comprehensive coverage.
Do you have car insurance through Liberty? What has your experience been like? Let us know in the comments section!
Ursin is represented by Stephen J. Herman, Soren E. Gisleson, John S. Creevy, and Charles M. King of Herman Herman & Katz, LLC and Edmund A. Normand and Amy L. Judkins of Normand PLLC.
The Liberty Car Insurance Class Action Lawsuit is Ursin v. Liberty Personal Insurance Company, Case No 3:21-cv-00286-SDD-RLB, in the U.S. District Court Middle District of Louisiana.
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