Total Loss Vehicle Claim Amount May Need to Cover Taxes, Title Transfer Fees

If you’ve been in a car accident and your car has been deemed a total loss vehicle, your insurance company might not have paid you the full amount due.

Recent lawsuits have shed light on the fact that some insurance companies may be skirting their obligation to pay state and local taxes and title transfer fees after a car or truck was determined to be a total loss.

In one recent lawsuit in Florida, a plaintiff alleged GEICO failed to pay such fees on a leased vehicle that was destroyed in a crash. GEICO tried arguing the policy doesn’t cover such fees on a leased vehicle, only on an owned vehicle.

The judge found that on the contrary, GEICO’s policy makes it clear that owned and leased vehicles will be treated the same. Plus, Florida law dictates that if an insurance policy is ambiguous, the matter should be interpreted in the insured party’s favor.

The definition to determine whether or not a vehicle is totaled in an accident is usually different in each state. Roughly, if the damage to the vehicle is more than 70 to 80 percent of the vehicle’s actual cash value, the vehicle is totaled.

A common myth is if an airbag deploys in an accident, the car is always totaled. In many accidents in which airbags deploy, the vehicles are totaled. One reason is that an airbag can cost more than $1,000 to replace in most cars, so if an older vehicle has an airbag deploy, that extra $1,000 cost can affect the math, causing the vehicle to be totaled.

For example, if Susan carries comprehensive insurance on her 10-year-old Ford pickup truck that releases an airbag as she hits an elk on the freeway, her truck might be repairable, but still totaled. If the cost to replace the airbag combined with the front-end damage to the truck equals more than the actual cash value of the truck, the insurance company will total the truck.

Total Loss Vehicle Calculations

An insurance adjuster will evaluate the crash and the damage to your insured vehicle. The accumulated information is usually run through specialized computer software that determines whether or not the vehicle is a total loss.

The amount of money provided to the owner of a totaled vehicle, according to most insurance policies, should include sales tax and title transfer fees. If those monies are not provided in the total loss calculation, the consumer may be able to seek legal assistance for breach of contract.

If a vehicle is considered a total loss, the owner will not receive the amount of money they originally paid for the car. Some inexperienced drivers are shocked to discover how much their cars have depreciated since they bought them. A vehicle that is totaled, but is still not paid off, can leave the owner with extra financial pressure when having to replace their total loss vehicle.

Some insurance companies offer gap protection, an extra level of insurance that covers the difference between the settlement amount on a totaled vehicle and what is owed on the vehicle.

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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