Ohio Total Loss Insurance Case Will Proceed Against Geico, Judge Rules

A motion by Geico to dismiss a total loss insurance class action in Ohio has been denied by the judge, and the case will move forward.

The lead plaintiffs, three women who carried auto insurance policies issued by Geico, had all filed claims following car accidents, resulting in each of their vehicles being declared a total loss.

However, they claim that Geico breached its own contract by failing to reimburse them for sales tax, license and registration fees, which they say should have been included in any settlement.

Total Loss Defined

Insurers declare a wrecked vehicle to be a total loss when an adjuster determines that the cost of repairs exceeds its value. This is where many disputes arise. A comprehensive auto insurance policy offers the replacement cost of the vehicle, minus depreciation and deductible – so the settlement is based not on actual replacement cost, but rather the fair market value of the vehicle at the time of the accident.

Under Geico’s policies, according to the lawsuit, if the insured and the company are in disagreement with this figure, either or both parties may demand an appraisal – but this is not a requirement. If both parties agree to an appraisal, the company and the insured hire their own appraisers; if the appraisers are in disagreement, the case goes to an independent third party for mediation.

The cause of action in the Ohio class action lawsuit centers around the question of whether or not the assessed value of the vehicle should include additional fees associated with its purchase – i.e., sales tax, title transfer fees, and the cost of licensing.

The Present Case

The current class action was filed in June 2019. In response, Geico invoked its own right to an appraisal under the terms of their policies. In its motion, defendant Geico asked the court to order the appraisal and/or throw the case out. Counsel for the defense also cited a federal rule to support the their allegation that the plaintiffs’ argument was not sufficient to demonstrate to the court that Geico had engaged in misconduct.

The court pointed out that the plaintiffs were not disputing the Actual Cash Value (ACV) figure as determined by the defendant – rather, the issue is whether or not that figure should include tax and license fees.

When the defendant took issue with the fact that the plaintiffs did not seek an appraisal before proceeding with their lawsuit, the plaintiffs noted that the terms of the policy state that either party may demand an independent appraisal, but are under no obligation to do so. This was an issue Geico faced in an earlier, similar case that ended in a $27 million settlement.

In short, this total loss class action is not about the actual cash value of the destroyed vehicles – it is about whether or not an insurer is obligated to include tax and licensing fees in its settlement.

More Litigation on the Horizon?

Currently, three other Ohio insurance companies – Allstate, Erie and USAA – are being investigated by law firms in anticipation of further lawsuits over the question of tax and license fees as part of a wrecked vehicle’s ACV.

The current Geico Total Loss Class Action Lawsuit is Case No. 2:19-cv-02477-GCS-EPD, U.S. District Court, Southern District of Ohio Eastern Division.

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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