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Farmers Insurance Class Action Lawsuit Overview:
- Who: Farmers Insurance Company has been hit with a class action lawsuit.
- Why: Policyholders allege that the company fails to pay out taxes and fees when reimbursing policy holders for the value of their vehicles, violating policies and breaking state laws.
- Where: The class action lawsuit seeks to represent Oklahoma consumers.
Farmers Insurance Company fails to pay out taxes and fees when reimbursing policyholders for the value of their vehicles, violating policies and breaking state laws, a new class action lawsuit alleges.
The lawsuit was filed in Oklahoma on October 19 by lead plaintiff Jaelea Chance who says that the company’s failure to pay out sales tax and registration and title fees to policyholders after a total vehicle loss amounts to a breach of contract.
Chance, who had a 2002 Honda Civic insured with Farmers, says in the claim that she had paid a premium in exchange for Farmers’ promises under its automobile policy.
But when the car was damaged on March 4, 2017, she was denied the benefits of paying that premium, she says.
Following her claim, Farmers Insurance determined through a third party company that the vehicle was a total loss with value of $1,369, the class action states.
Chance adds that the third party company said: “The total may not represent the total of the settlement as other factors (e.g. license and fees) may need to be taken into account,” as no amount for the Vehicle Title and Registration Fees was included in the amount listed.
In its standardized policy, Farmers Insurance promises to pay for “loss to your insured car caused by accidental means” or “caused by collision,” Chance says in the class action lawsuit.
Farmers Insurance Violates Laws Requiring Taxes and Fees, Says Class Action
Courts throughout the country have recognized that “actual cash value,” when undefined in an insurance policy, should be defined as the repair or replacement cost minus depreciation – a definition which would include fees necessarily incurred upon replacement of the insured vehicle, including Sales Tax and Vehicle Title and Registration Fees, the lawsuit argues.
“Nevertheless, Defendant failed to include Sales Tax and/or Vehicle Title and Registration Fees in making ACV payments to total loss insureds, thereby breaching its contracts with insureds.”
Farmers agreed to pay Chance only the adjusted vehicle value of $1,369 minus the deductible of $500 for a total payment of $869.00.
“By failing to include sales tax in making payment for the loss, Farmers breached its contract with Plaintiff,” the claim alleges.
According to Chance, Oklahoma law requires that all vehicles be properly titled and registered to be legally driven on Oklahoma roadways. The fee to transfer title to a vehicle is, at minimum, $17, plus a $10 notice of transfer filing fee. All vehicles are subject to a Vehicular Sales Tax of 1.25 percent, in addition to Sales Tax imposed by the County and the State, she adds.
Chance wants to represent anyone in Oklahoma with a Farmers Insurance policy who has not been reimbursed taxes and fees on a total vehicle loss. She is suing for breach of contract and seeks certification of the class, damages, legal fees and costs, interest, and a jury trial.
Farmers isn’t the only insurance provider facing a lawsuit over ACV payments. Today, American Family Mutual Insurance Co. was hit with a class action lawsuit for allegedly deceptively undervaluing total-loss vehicles to reduce payments to claimants.
Similarly, in August, GEICO was accused of failing to pay fees for claims made by policyholders.
Let us know in the comments section if you have insurance with Farmers and what your experience has been like!
Chance is represented by Andrew J. Shamis of Shamis & Gentile.
The Farmers Insurance Class Action Lawsuit is Chance v. Farmers Insurance Company, Inc., Case No. 6:21-cv-00314-KEW in the U.S. District Court Eastern District of Oklahoma.
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2 thoughts onFarmers Insurance Violates Insurance Policies by Refusing To Pay Fees, Class Action Alleges
I have had farmers insurance for 5 years and suddenly I was canceled because I had two water claims resulting from the same pipe which was replaced and rerouted.
I have had farmers for seven years. Only had one claim and had to pay deductible never looked at fees or taxes but will.