Sage Datko  |  February 27, 2019

Category: Insurance

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A man makes a phone call after a car crash.The holder of a USAA car insurance policy says the company fails to reimburse policyholders for the taxes and fees associated with their total loss claims.

USAA Total Loss Lawsuit

In his car insurance class action lawsuit against United Services Automobile Association Casualty Insurance Company (USAA), plaintiff Lester Spielman claims that the insurance company systematically underpaid him and potentially tens of thousands of other policyholders.

Spielman claims to have purchased auto physical damage coverage, including collision, from USAA. This type of insurance requires payment of actual cash value after a car accident in which the covered vehicle is deemed to be totaled, or a total loss, by the insurance company.

On Oct. 7, 2017, Spielman says, his 2017 Genesis G80 RWD was totalled in a collision. After he filed a total loss insurance claim, USAA allegedly determined that the cash value of the vehicle was $45,295.

However, Spielman says this amount did not account for other costs associated with the loss of his car, including sales tax, the vehicle title fee, and registration fees. The amount originally stated in the settlement did include $4,303.03 in sales tax, but Spielman says USAA made a “manager adjustment” that deducted that amount prior to paying out the final settlement amount. The final amount also failed to include a $500 collision deductible, he claims.

What Does Actual Cash Value Mean?

The actual cash value is meant to be total cost to replace the damaged vehicle. Actual cash value is determined by an independent vehicle valuation company, in Spielman’s case, CCC One. The valuation is based on the cost of similar vehicles in comparable condition with similar mileage.

According to Spielman, USAA’s policy language states that the insurance includes physical damage coverage, collision coverage, and physical damage other than collision. As the state of California requires payment of sales tax, vehicle title and registration fees, and license plates and tags, Spielman’s lawsuit argues that these mandatory expenses must be covered by his insurance policy. His lawsuit additionally claims that in refusing to pay these fees, USAA violates its own policies and language.

About USAA

USAA provides insurance to members of the U.S. military, veterans, and family members. They provide services including property insurance, life insurance, banking, brokerage, investment management, and real estate development to approximately 12 million customers. According to USAA’s website, the insurance company was worth more than $30 billion as of 2017.

Who is Affected?

Total loss insurance lawsuits have been filed against many insurance companies, including GEICO, State Farm, and now USAA.

Refusing to pay taxes and fees is just one of many ways that insurance companies may be attempting to reduce their claims payouts. In 2018, Allstate and First National were accused of manipulating the way that car value was assigned, leading to lower payouts in total loss cases.

Policyholders may be eligible to join a total loss class action investigation if their vehicle was totalled after a car accident and their insurance company failed to pay associated and mandatory fees.

This Total Loss Lawsuit is Spielman v. United Services Automobile Association Casualty Insurance Co., Case No. 2:19-cv-01359, in the U.S. District Court for the Central 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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13 thoughts onTotal Loss Car Insurance Should Cover Taxes and Fees, Says Policyholder

  1. TODD FISHER says:

    Safeco total loss in 2020 AND NOT COMPENSATED FOR sales tax, registration and title fees.

  2. LAZETTE M HAMILTON says:

    I had a 2015 Buick SUV registered in NY state that was totaled December 2019. I never received sales tax or other fees.

    Please add my name to the list.

  3. Lisa R Shaw says:

    I had a car totaled in 2017 and don’t believe I was not compensated for taxes. Please include me in lawsuit.

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