Total Loss Car Accident Payouts May Not Fully Compensate Drivers

Insurance companies may not be paying consumers what they’re owed after a total loss car accident, according to class action litigation.

After a car accident, insured car owners are typically compensated for the cost of repairs to their vehicle. When a vehicle is “totaled”, the entire cost of the vehicle is reimbursed.

According to DMV.org, a damaged vehicle is labeled a “total loss” by the insurance company “when the cost to repair the vehicle to its pre-damaged state exceeds the cost of the vehicle’s worth, or actual cash value”. Determining whether a vehicle is a total loss depends on the car insurance company’s standards, the vehicle’s condition, and state laws.

GEICO, a popular auto insurer, states on their website that the total loss car accident process is fairly straightforward: the consumer reports a claim, schedules damage inspection and reserves a rental vehicle, learns that their vehicle is a total loss, finds the vehicle title, collects their belongings, releases their vehicle, signs paperwork, and receives payment.

However, allegations raised against the insurance company suggest that the process may not actually be that simple.

In a car insurance class action lawsuit, plaintiff Kerry Roth claims that she did not receive her full refund after filing a total loss car accident claim with GEICO in 2016. According to her complaint, the insurance provider failed to account for the state and local sales tax as well as title transfer fees when paying the total loss settlement.

Roth’s accident was reportedly in June 2016, during which her vehicle was allegedly totaled. Shortly after, she allegedly filed a claim with GEICO and was paid the total loss value of her leased vehicle. However, Roth claims that she was not reimbursed for sales tax or title transfer fees.

Due to this alleged underpayment, Roth filed a class action lawsuit against GEICO in August 2016 on behalf of herself and consumers who had similar experiences.

In June 2018, Roth won summary judgement in her favor when U.S. District Judge William P. Dimitrouleas determined that ambiguities in an insurance policy should be interpreted in the favor of the insured party under Florida law. The judge found that, because there are no separate policies for leased vehicles in GEICO insurance policies, the insurance company did not inform consumers of the value differences between owned and leased vehicles.

Judge Dimitrouleas also found that sales tax and title transfer fees are mandatory fees which should be covered by insurance companies under Florida law.

“Sales tax and title transfer fees are mandatory parts of the replacement cost under the GEICO Policy for Plaintiff Roth’s (and the class members’) leased total loss vehicle and therefore are components of ‘actual cash value’ under the Policy,” Judge Dimitrouleas determined. “Accordingly, GEICO’s failure to pay leased vehicle total loss insureds sales tax in the amounts of 6% of the value of the vehicle (plus any local taxes) and title transfer fees in the amount of $75.25 constitutes a breach of contract.”

The GEICO Class Action Lawsuit is Kerry Roth v. GEICO General Insurance Co., Case No. 0:16-cv-62942, in the U.S. District Court for the Southern District of Florida.

UPDATE: March 2019, a website has been established informing GEICO total loss class action lawsuit Class Members of their rights. Learn more here. 

Join a Free Total Loss Car Accident Class Action Lawsuit Investigation

If you were insured under an auto insurance policy, experienced a total loss car accident, and were not reimbursed for sales tax and other fees by your insurance company in the last 5 years, you may qualify to join a total loss car accident class action lawsuit investigation.

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