According to several recent lawsuits filed by consumers, many car insurance companies may be violating their own policies by refusing to pay the taxes and fees that policyholders are charged after a total loss insurance claim.
USAA Total Loss Car Accident Lawsuit
A recent lawsuit filed by plaintiff Malaika Coleman of Illinois claims that insurance company USAA failed to pay her the full amount owed after she suffered a total loss car accident.
Coleman says she was a customer of USAA and held an insurance policy for private passenger auto insurance, including comprehensive and collision coverage. After her vehicle was deemed a total loss following a car accident on Sept. 7, 2018, Coleman claims that the insurance company did not fully reimburse her for the amount of money she was owed.
According to the lawsuit, Coleman’s comprehensive and collision policies both state that she is eligible to receive a payment of “actual cash value” in the event that she files a total loss insurance claim. Coleman says her vehicle was determined by USAA to be worth $3,466. However, USAA allegedly did not include the $95 cost of transferring her title, or the 6.25 percent sales tax associated with the purchase of a new vehicle.
The USAA lawsuit claims that Coleman’s situation is not uncommon and that USAA systemically underpays its policyholders by refusing to pay sales tax and title transfer fees.
What Does Actual Cash Value Mean?
According to Coleman’s policy, USAA defines actual cash value as the amount it would cost to purchase a comparable vehicle. Although USAA may have paid out the value of her car before it was totaled, they allegedly failed to pay for the sales tax and title transfer fees that Coleman says are a mandatory cost associated with replacing a vehicle in Illinois. Under Illinois law, vehicles must be properly titled and have proper license plates or tags in order to be legally driven.
At the time of her accident, Coleman says the minimum fee associated with transferring a vehicle title was $95. The national average sales tax on vehicles is almost 6 percent. The cost of these fees may quickly add up, resulting in up to thousands of dollars owed by the consumer.
Who is Affected?
Several insurance companies have been accused of manipulating car valuations, refusing to pay title transfer fees or sales tax, and violating their own policies regarding total loss insurance claim payouts. GEICO, State Farm, Allstate, First National, and USAA have all been hit with lawsuits filed by policyholders over fee structures and reimbursement policies.
If you have filed a total loss insurance claim and have not been reimbursed by your insurance provider for the costs of mandatory sales tax and title transfer fees, you may be able to pursue compensation for these costs.
Coleman’s Total Loss Insurance Claim Lawsuit is Case: 1:19-cv-01745 in the U.S. District Court for the Northern District of Illinois.
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.
ATTORNEY ADVERTISING
Top Class Actions is a Proud Member of the American Bar Association
LEGAL INFORMATION IS NOT LEGAL ADVICE
Top Class Actions Legal Statement
©2008 – 2025 Top Class Actions® LLC
Various Trademarks held by their respective owners
This website is not intended for viewing or usage by European Union citizens.
Washington residents: Did you receive a ‘refer a friend’ text for Capital One, Venmo, Tesla, Coinbase, or another company?
September 23, 2025 | Legal News
15 thoughts onTotal Loss Insurance Claim Lawsuit Says USAA Underpaid Claims
I have had TWO major issues with USAA. First was a 2001 GMC Suburban K2500 (3/4 ton tow and rear a/c 9 pax 45,000mi). It was being driven by an employee which is allowed by my policy. We have been USAA clients for 51 years (my husband was an Army captain in 1972 as those were the requirements then).
There was damage to the front fender. There were two accidents. One was a non-accident bumping the front bumper on a post, but the airbags deployed. They paid for that and the damage was fixed. About 2 months later, there was a “fender bender”. Modest damage to bumper, fender and grill. USAA decided to TOTAL the truck. Since it was in Nevada, the limited comparables and they found a scam “used car dealer” in Oregon which was a decommissioned gas station and the vehicle had more than 150,000. The true comps were in Colorada and Michigan which were $25,000 and $22,500, higher mileage. USAA paid $11,000 HALF. I kept the truck and had it fixed for $2,500 including a complete repaint and detail. Their plan was to screw me for over 50% of the replacement value. The total was illegal since the damage for a TOTAL in Nevada requires frame damage beyond repair, more than 2 “units” damaged… i.e. Two fenders, engine damage and rear bumper etc.
NOW 2 years later I have a very high-end BMW, 760 LI (12 cylinders) with Executive Suite Rear seating. So BMW only makes a few 100 of these every 2-4 years and the Executive seating is even rarer. The MSRP of the 760 is $144,000. Their comps were for a 750 (8-cylinders) and standard interior for $15,000. They generously offered $16,000 but there are no comparable cars for under $25-30,000.
(NOTE: The executive seating is reclining and heated/cooled massage seating, DVD and computer system and airline-style tables, center armrest with control over the car computer, separate complete air-conditioning system and a drinks refrigerator, electric side and rear curtains, and control over the front passenger seat from the rear (giving 30″ of leg room).
THERE ARE NO YEAR/MODEL EQUILIVANT MODELS FOR SALE IN THE USA. There was one for $27,000.
The loss contract is unclear when there are no comps available but suggests up to a 2-year younger model may be used. They have refused. I now am convinced this is a chronic problem with RARE models.
From the above other issues, this is endemic and chronic. ALSO about 10 years ago there was an accident in my husband’s Mercedes 600CL. They totaled it for $30,000 even though he’d bought it 2 years earlier for $62,000. (AGAIN 50% LESS) He took a $28,000 buyout and had the car fixed at the same shot as USAA got the “TOTAL ESTIMATE” from for <$20,000. AGAIN A RIP OFF.