What Is the Liberty Mutual Total Loss Process?

The Liberty Mutual total loss process involves documentation of damage, estimates of repairs, and an eventual total loss insurance settlement.

What Is A Total Loss?

A vehicle is generally declared a “total loss” after an accident if the cost to repair the damage would exceed a certain threshold in comparison to the vehicle’s actual cash value. In some states, damage must exceed the actual cash value while in other states damage must reach a percentage of the vehicle’s value – ranging from 50% to 100%. Other states use a total loss formula in which a vehicle is a total loss if the repair costs and also the salvage value exceed the actual cash value.

What Is the Liberty Mutual Total Loss Process Like?

The Liberty Mutual total loss claims process involves four steps. First, the damage to a vehicle will be reviewed by an insurance adjuster. Next, policyholders can rent a car at a discounted rate. Later, a vehicle may be declared a total loss after estimates are back from a repair shop. Finally, the paperwork for the claim is filed and completed.

According to Liberty Mutual, the insurance claims process may vary in length based on the type of claim and the severity of the claimed damage. However, the insurer’s website says that a Liberty Mutual claims representative will review claims and get back to policyholders within one to two business days.

The Balance recommends the following to speed up the claims process for any insurer and even maximize their payments:

• File a timely report: File your claim with your insurance company as soon as possible so it can be resolved quickly.
• Have your vehicle towed to a preferred shop: Your insurance company likely has several shops in your area with which they prefer to work on total loss claims. If you suspect that your vehicle is totaled, take your vehicle to one of these shops to expedite the process.
• Locate your vehicle’s title: Having your title on hand will be important for completing the total loss process as this title may need to be signed over to your insurer. If you’ve lost your title, file for a new one with your local DMV as soon as possible.
• Check your loan status: If you still have a remaining balance on your auto loan, you may need to pay the remaining value. Your total loss settlement may not compensate this full amount since payments are based on actual cash value not loan payoff amounts.
• Research your vehicle’s value: Use resources such as local listings and Kelley Blue Book to get an idea of how much your vehicle may be worth. This knowledge can help you determine if your insurer’s proposed total loss settlement is fair.
• Mail all of your paperwork ASAP: Getting your paperwork in the mail as soon as possible can help you resolve the total loss process as quick as possible.

Unfortunately, even when following these steps to maximize their total loss settlement, consumers may find that their settlement doesn’t compensate them for the full cost of replacing their vehicle. Some of these concerns have sparked legal action.

Have Liberty Mutual Total Loss Lawsuits Been Filed?

In October, two Liberty Mutual consumers filed a lawsuit against the insurance company challenging their total loss settlement.

According to Sharon Middleton and Charles Clendenin, Liberty Mutual fails to compensate their consumers for the sales tax, title transfer fees, and registration fees. The plaintiffs contend that these costs are owed to them under the terms of their auto insurance policies.

Liberty Mutual policy terms reportedly promise that the company will pay for “direct and accidental loss to ‘your covered auto.’” The plaintiffs argue that sales tax and transfer fees are part of the cost to replace a vehicle and should therefore be included in total loss settlement.

Despite these policy terms, Liberty Mutual has allegedly failed to pay policyholders the full sales tax, title transfer fees, and registration fees they are owed as part of their total loss settlement.

“Defendants’ failure to pay the [actual cash value] of total-loss vehicles, including Sales Tax and Transfer Fees, constitutes a material breach of contract as to Plaintiffs and every member of the putative Class,” the Liberty Mutual total loss class action lawsuit contends.

Middleton and Clendenin seek monetary relief from Liberty Mutual to compensate them for the costs that they say should have been included in their total loss settlement. The plaintiffs also seek this relief on behalf of a proposed Class of Ohio policyholders in a similar situation.

Can I File A Total Loss Insurance Lawsuit?

Although the class action detailed above specifically targets conduct by Liberty Mutual, you may be eligible to take similar action against your insurer. Attorneys are investigating several insurance providers for potential wrongdoing associated with their total loss policies.

If you believe you were the victim of unfair total loss policies and were denied reimbursement for sales tax, title transfer fees, tag transfer fees, and other costs as a part of your total loss settlement, you may be able to take legal action.

The Liberty Mutual Total Loss Class Action Lawsuit is Sharon Middleton, et al. v. Liberty Mutual Personal Insurance Company, et al., Case No. 1:20-cv-00668-DRC, in the U.S. District Court for the Southern District of Ohio.