Does GEICO Pay Less When a Leased Car Is Totaled?

GEICO Insurance may not fully pay total loss claims, according to allegations which the insurance giant resolved with a settlement that recently secured final approval.

What is a Total Loss?

A total loss occurs when a vehicle is extremely damaged in an accident or other incident. In order to be considered “totaled,” repairs to a vehicle must meet a certain threshold. How total loss value is calculated varies from state to state. In some states, repairs must exceed the vehicle’s value while other states require repairs to exceed a certain percentage of the vehicle’s value.

When a vehicle is a total loss, an insured driver will typically be offered a total loss settlement to compensate them for the actual cash value of their damaged vehicle. However, some consumers say that GEICO fails to properly compensate policyholders for total loss accidents—especially if their vehicle is leased instead of owned.

Does GEICO Fully Compensate Total Loss Claims?

Several consumers filed GEICO total loss class action lawsuits after the company allegedly failed to include essential taxes and fees in total loss settlements. According to plaintiffs in the total loss cases, GEICO is contractually obligated to include sales tax, title transfer fees, and more in its total loss settlements, even if the vehicle is being leased instead of owned.

Although GEICO has not admitted any wrongdoing, the company agreed to a settlement with Florida consumers. One case covered by the settlement ended when GEICO policyholders won summary judgement against the insurer.

Under the settlement deal, Florida GEICO policy holders could collect an estimated $1,300. These projected payments include $79.85 in title and tag fees and Florida’s 6% sales tax plus local tax. This part of settlement payments varied depending on the vehicle’s adjusted value.

The deadline to file a claim with the GEICO total loss class action settlement was Dec. 28, 2020. The Florida GEICO Insurance class action settlement secured final approval on Feb. 8, 2021, after U.S. District Judge William P. Dimitrouleas found the deal to be fair, reasonable, and adequate.

Similar allegations have also been successful in seeking compensation from GEICO Insurance Company for subpar total loss payments.

Did GEICO Insurance Underpay Your Total Loss Settlement?

Although only Florida GEICO Insurance policyholders could benefit from the settlement, other drivers may be able to take legal action if they were denied full payment of total loss claims. Attorneys are interested in speaking to GEICO policyholders who believe they were denied full total loss payments due to leasing their vehicle rather than owning it.

The GEICO Insurance Class Action Settlement includes Joffe, et al. v. GEICO Indemnity Company, et al., Case No. 18-cv-61361, and Roth v. GEICO General Insurance Company, Case No. 16-cv62942, both in the U.S. District Court for the Southern District of Florida.