Total loss car insurance claims: Are you getting all that you’re owed?

Total loss car insurance payouts may not always reflect the full replacement cost when a vehicle has been totaled, according to class action lawsuits.

These lawsuits allege that insurers violate their own contracts when they fail to reimburse policyholders for tax and licensing fees once a damaged vehicle has been declared a total loss.

Depending on the age, make and model of the vehicle in question, these fees can add up to thousands of dollars.

“Total loss car” claim, defined

Contrary to common perception, a “totaled” vehicle is not necessarily beyond repair. When an insurance adjuster declares a damaged vehicle to be a “total loss car,” it simply means that he or she has determined that it will be more cost effective for the insurance company to replace it as opposed to having it repaired.

In making this determination, the adjuster consults an authoritative valuation guide (such as Kelley’s Blue Book) in order to determine the fair market value of the vehicle at the time of the accident, taking into consideration overall condition, age, and mileage. If repair estimates (most insurers require the policyholder to get three) exceed that value, the vehicle is considered to be “totaled.”

At that point, the claimant should be entitled to compensation for the value of the total car. But in some states, the law requires insurance companies to pay more. These states recognize that the owner of a totaled car should not be on the hook for other necessary expenses related to their claims, such as taxes and title transfer fees.

Total car loss claims: cause of action

Plaintiffs in class action lawsuits against insurance companies argue that tax and license fees are part of a vehicle’s replacement costs and that claims should be paid accordingly.

In one class action filed against GEICO, a federal judge in Florida granted summary judgment in favor of plaintiffs who claimed the defendant acted in bad faith by failing to factor in registration, tax and licensing fees when they compensated her for the loss of the vehicle. GEICO attempted to get the verdict overturned by challenging the class certification, but the 11^th Circuit Court of Appeals denied the defendant’s petition.

Other insurance companies accused of acting in bad faith

Numerous other insurers have faced lawsuits over failing to act in good faith with their insureds. More than a decade ago, the American Association for Justice issued a report ranking Allstate as the “worst insurer for consumers,” citing its “Deny, Delay, Defend” strategy used to avoid paying the full value of claims. In 1997, State Farm was forced to pay more than half a million dollars to a family who alleged bad faith on the part of the insurer.

Filing a total loss lawsuit

If you bought or leased a car or motorcycle in the last five years that has since been totaled, you may be owed money. Even if your insurance company has given you a payout, they may have failed to pay all associated fees and taxes, and you may be eligible to file a lawsuit for insurance underpayment.

Filing a lawsuit can be a daunting prospect, so Top Class Actions has laid the groundwork for you by connecting you with an experienced attorney.

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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