Consumers Allege Insurance Companies Give Incomplete Payments for Car Total Loss Claims

If you’ve been in an auto accident and had a car total loss determination made, you might not have received the full amount due you from your insurance company.

GEICO is just one insurance company that has faced multiple class action lawsuits filed by policyholders who allege they have been underpaid after a car accident.

In one Florida lawsuit, the plaintiff accused GEICO of failing to pay state and local sales taxes and title transfer fees after the plaintiff suffered a car total loss. GEICO tried to argue that its policy doesn’t say sales tax or title transfer fees are covered, and also attempted to argue that because the vehicle was leased, the value was determined differently than if the vehicle had been owned.

The judge said that the policy did not differentiate any differences between owned and leased vehicles to determine the amount due in the event a car total loss determination was made. The judge also said according to Florida law, an insurance policy’s ambiguities should be interpreted in the insured person’s favor.

The lead plaintiff in the Florida case said she had to pay a minimum of $75.25 for the title transfer and six percent of the replacement car’s value in sales tax, for a total of about $1,500. Sales tax rates vary from state to state, as do laws governing insurance coverage.

Consumers allege GEICO and other insurance companies, like State Farm, owe them hundreds or even thousands of dollars due to short-changing their total loss determinations. Policyholders accuse insurance companies of violating their own contracts by withholding payment for sales tax, title transfer fees, tag transfer fees and more after a car total loss determination has been made.

Car Total Loss Determinations

After a vehicle is involved in a car accident, an insurance adjuster evaluates the crash and the insured car’s damage. The collected information determines how much money the policyholder is entitled to.

When an insurance adjuster’s figures indicate the cost to repair the vehicle exceeds the car’s insured value, the insurance adjuster is apt to consider the damaged vehicle a total loss.

A car total loss determination means the policyholder is to be offered the fair market value of the vehicle as of the day the accident occurred.

If a vehicle is several years old, the fair market value might mean the vehicle’s owner will be back in a position of making car payments, something the policyholder wasn’t anticipating. Customers of GEICO and other insurance companies allege the car total loss value has not included sales tax and title transfer fees, which is a breach of contract.

The car total loss class action lawsuits allege that sales tax and title transfer fees “are components of ‘actual cash value’ under the policy.” By not providing full payment for a car total loss determination, plaintiffs say the insurance companies are improving the financial look of their own bottom line.

The Car Total Loss 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, you may qualify to join a total loss car accident class action lawsuit investigation.

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