Drivers Say Geico Shorted Them on Their Total Loss Claim

Two California women claim Geico fails to pay enough for fees and taxes when paying a total loss claim.

Lead plaintiffs Martisha Munoz and Cindy Ventrice-Pearson, both California residents, filed the auto policy class action lawsuit alleging the insurance giant neglected to honor its own policies regarding the payment of a vehicle’s actual cash value.

According to court documents, Geico passenger automobile policies state the actual cash value includes state sales tax and state-mandated fees. Geico allegedly pays total loss vehicle claims as follows:

• Vehicle owners allegedly receive sales tax and a portion of mandatory fees, which the lawsuit says is “an insufficient amount.”
• Vehicle lessees purportedly do not receive sales tax or they receive an underpayment of sales tax.
• All insureds allegedly receive an underpayment of mandatory regulatory fees, whether a vehicle is owned, financed or leased.

The plaintiffs allege that all vehicle owners and lessees are owed sales tax as part of the actual cash value of the totaled vehicle, per Geico’s own policy statements.

The lawsuit contends that the amount of sales tax that should be paid should not be based on the originally paid amount of sales tax, but should be based on the underlying adjusted vehicle value at the time of its total loss.

The plaintiffs say that according to its policy’s language, Geico also is obligated to pay the full title, registration and regulatory fees imposed by the state of California. Geico allegedly has only paid prorated amounts of these fees to all insureds who have submitted a total loss claim.

Total Loss Claim Details

Plaintiff Munoz says she leased and insured a 2016 Honda Sedan LX. Her car was deemed a total loss after a February 2017 accident. She says an initial report included sales tax at a rate of 8.5 percent, but the sales tax allegedly was removed from the calculation after Geico saw the vehicle was leased and not owned. Geico did add state and local regulatory fees of $159, she claims.

Munoz alleges she is owed the sales tax amount of 8.5 percent based on Geico’s policy statement. She also alleges the state and local regulatory fees were closer to $250 total, and not the $159 awarded to her.

In Ventrice-Pearson’s case, she owned and insured a 2010 Mini Cooper. She was in an accident in November 2018 that resulted in her vehicle being deemed a total loss. Geico allegedly added sales tax and state and local regulatory fees, but she said Geico only paid $97 for state and regulatory fees. She said her real fees were about $215, not $97.

According to the lawsuit, “Geico’s underpayment of the [actual cash value] regulatory fees constituted a breach of contract.”

Geico’s website indicates the company is a wholly owned subsidiary of Berkshire Hathaway, Inc. Geico has current assets of more than $32 billion. Geico is the second-largest provider of auto insurance in the U.S., only behind State Farm.

The Total Loss Claim Lawsuit is Munoz and Ventrice-Pearson v. Geico General Insurance Company, Case No. 3:19-cv-03768-JSC in the U.S. District Court for the Northern District of California.

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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