First Acceptance Insurance Co. Accused of Underpaying Total Loss Auto Accident Claims

First Acceptance Insurance Co. has been hit with a proposed class action lawsuit, alleging the company has been failing to pay total loss auto accident claims. The claim alleges the insurance company has been underpaying “actual cash value” (ACV) claims for totaled calls for years.

Lead plaintiff Derrick M. filed the proposed class action lawsuit, which alleged the insurance company had been systematically underpaying potentially thousands of total loss auto accident claims.

According to Law360, the company allegedly failed to pay state and local title transfer, vehicle registration fees and sales taxes when calculating payouts for total loss auto claims.

According to the claim, Derrick submitted a total loss auto accident claim to First Acceptance for damages for his 2015 Nissan Sentra when he became involved in a June 2017 accident.

The lawsuit stated a third party vendor CCC Informations Services Inc. determined the total value of Derrick’s car at $12,493.34, which reportedly include a line item for taxes.

While the report did not include any lines for the title transfer fee or tag transfer fee, it did note that the $12,493 amount may differ from the settlement due to other expenses like “license and fees,” which would have been needed to be taken into account for the final settlement amount.

First Acceptance reportedly failed to pay the full total loss to Derick, who reportedly only received $11,239 after subtracting the $500 deductible and S754.32 from the $12,493.34 figure, which reportedly did not consist of title transfer and tag fees.

“Defendant’s payment of $11,239.00 did not include amounts for title transfer, tag transfer, or taxes (previously defined herein as FTLP) and was thus not an ACV in breach of its contract with plaintiff, which promised to pay the full market value of the total loss of an insured’s vehicle,” the complaint alleged.

Overview of Actual Cash Value Determination

According to Investopedia, the actual cash value of a vehicle is based on a number of contributing factors, including whether or not the car is actually totaled or if the cost to repair the car exceeded 60% to 70% of its value. An insurance adjuster is typically sent to confirm this, followed by the adjustor conducting an appraisal and then assigning a value to the vehicle.

The adjustor typically bases the ACV value on what a reasonable cash offer would be for the car before it was involved in a car accident.

The insurance company will then typically enlist a third party appraiser to conduct their own estimate, to minimize any alleged biases or attempts of undervaluing the vehicle.

The Balance suggests that consumers who get involved in a car accident should contact their insurance company as soon as possible, locate all necessary documentation for the insurer including the title and do their own research on what the value of their car may be.

According to Derrick’s claim, this is a breach of contract and that First Acceptance policyholders are unconditionally entitled to “full total loss payments” (FTLP) when submitting these claims. This includes any mandatory regulatory taxes, as well as costs or fees required that incur when replacing the vehicle.

The proposed class action suit pointed out that taxes for the car’s title, transfer fees, and tag transfer fees are mandated under Florida state law, which can come out of $754.34. This also includes the $75.25 license plate fee, a transfer fee of at least $4.50, and a 6% sales tax.

The proposed class action lawsuit states First Acceptance total loss policy includes the actual cash value of the policyholder’s vehicle during all times relevant to the claim and potential class members.

The proposed class action lawsuit is reportedly seeking damages for the unpaid fees, taxes, and other associated costs, along with prejudgment and post judgment interest and legal fees.

This proposed class action lawsuit is Case No. 8:19-cv-01101, in the U.S. District Court for the Middle District of Florida.

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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