Geico To Pay $24M To Settle Claims It Short-changed Customers With Totaled Cars

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Geico Total Loss Insurance Class Action Lawsuit Settlement Overview:

• Who: Geico 
• Why: Geico is settling claims with customers who say they weren’t paid enough on their claims when their cars were deemed total losses.
• Where: California

Drivers insured by Geico who received payouts due to their cars being deemed “total losses” could be receiving a $2,000 check from the company, thanks to a class action lawsuit settlement.

In a motion filed Oct. 8 in a California federal court, Geico asked the court to approve a $19.5 million settlement with policyholders who claim the insurer didn’t pay them the full amount of sales tax and regulatory fees after their cars were written off.

“This is an impressive result for Settlement Class Members. Indeed, on average, sales tax class members will be paid $2,000,” the settlement states.

Geico has also agreed to pay an additional $4.43 million to cover attorney fees, court costs and notice and administration.

The class action lawsuit has been contested in litigation for more than two years. In the original complaint, Plaintiffs Cindy Ventrice-Pearson, Poonam Subbaiah and Kristen Perez alleged that Geico’s insurance policies should have been paying customers for sales tax and regulatory fees when their vehicles were deemed total losses. 

This is because the policy defines actual cash value as the “replacement cost” of the auto, minus depreciation, and therefore requires payment of the sales tax and regulatory fees required to buy a replacement vehicle. 

Geico Will Pay Two Classes to Settle Class Action Lawsuit

There are two Classes – a sales tax Class and a regulatory fees Class.

The regulatory fees Class should get about $6.88 each, while the sales tax Class is estimated to get about $2,000 each, on average. Customers could be eligible if they were covered under a Geico California policy and made a claim in which their vehicle was deemed a total loss at some point from June 27, 2015 through August 2020.

In February, Geico made a similar deal worth about $79 million, ending claims it shorted drivers by failing to pay sales tax and transfer fees on totaled leased vehicles, Law360 reports.

Meanwhile, Geico is also facing another class action lawsuit claiming it unfairly profited off the coronavirus pandemic, raising premiums despite the fact there was a huge drop in auto accidents. 

Are you a Geico customer impacted by this settlement? Let us know in the comments! 

The settlement class is represented by Annick M. Persinger and Mallory Morales of Tycko & Zavareei LLP, Edmund A. Normand and Jacob L. Phillips of Normand PLLC, Michael Louis Kelly and Joshua A. Fields of Kirtland & Packard LLP, Andrew John Shamis of Shamis & Gentile PA and Scott Edelsberg of Edelsberg Law PA.

The GEICO Total Loss Class Action Settlement is In re: Geico General Insurance Co., Case No. 4:19-cv-03768, in the U.S. District Court for the Northern District of California.

Read About More Class Action Lawsuits & Class Action Settlements:

• Progressive Claims Include Erroneous Adjustments To Lower Value of Total Loss Vehicles, Says Class Action
• Metromile’s Negligence Led to Drivers’ Personal Info Being Stolen in Data Breach, Class Action Alleges
• Insurer Who Denied Autism Treatments Pays $1.7M Class Action Settlement to Policy Holders
• State Farm Applies ‘Baseless’ Rate Adjustments on Total Loss Vehicles, Says Class Action