Two Texans Say Elephant Insurance Failed to Include Taxes in Total Loss Payout: Lawsuit

Two Texas residents say that Elephant Insurance failed to pay the full amount of their totaled vehicles, according to a class action lawsuit.

Plaintiffs Jessica Singleton and Tony Cooper are accusing of Elephant Insurance of failing to include the sales tax and mandatory transfer fees as part of the “actual cash value” that it is supposed to pay for totaled vehicles, according to its own automotive policies.

Both plaintiffs are Texas residents who allege similar experiences with Elephant Insurance Company.

Elephant allegedly issues standard policy language regarding its comprehensive and collision coverage for the actual cash value, which is generally defined as “replacement cost less depreciation.”

The insurance company has “an obligation to pay sales tax in Texas equal to at least 6.25% of the cash value of the insured vehicle at the time of loss (the ‘ACV Sales Tax’), along with state and local transfer fees for total loss vehicle comprehensive and collision coverage,” according to the total loss class action lawsuit.

In addition, the lawsuit says that some Texas counties impose a local sales tax of a maximum of two percent, which is allowed by state law.

Requirements for total loss claims vary by state. The state of Texas deems a vehicle a total loss if the vehicle is 100 percent non-repairable.

Total Loss Claim Money Received by the Plaintiffs

Singleton said she owned a 2007 Toyota Camry that was insured under a policy issued by Elephant. In October 2016, Singleton was in a car accident. She says her vehicle was determined to be a total loss with a base value of $6,509.

After adjustments, Elephant determined Singleton’s car had an adjusted vehicle value of $4,885, she says. A third-party vendor allegedly configured the valuation based on the cost of purchasing a similar car with similar mileage in that part of Texas. Singleton says the third party did not include dollar amounts for sales tax and title transfer fees or any other fees in its report.

She argues that when Elephant paid Singleton $4,885 for the loss of her vehicle, the company allegedly breached its own insurance policy by not paying her any sales tax or transfer fees.

Cooper makes similar claims against Elephant Insurance Company. He says he owned a 2003 Lexus LS 430 that he had insured through Elephant. In September 2017, Cooper says he was in a car accident while driving his Lexus, and the vehicle was determined to be a total loss. The base value was $7,080, and after adjustments, the third-party vendor said the car’s adjusted vehicle value was $7,181.29.

Again, Cooper claims, the third-party vendor did not include sales tax or transfer fees in the report, and Elephant did not provide the amount of sales tax or any fees in the total loss claim settlement amount.

Elephant allegedly “paid (at most) only the adjusted ‘base value’ of the vehicle minus the applicable deductible and did not include sales tax or tag/title transfer fee or any other amount,” according to the complaint.

The complaint goes on to say that no private passenger replacement vehicle can be purchased in the state of Texas without paying sales tax and mandatory regulatory fees.

Elephant Insurance is a subsidiary of the Admiral Group PLC, an insurance company from the United Kingdom that says it has more than six million customers worldwide.

The Total Loss Claim Lawsuit is Singleton, et. al. v. Elephant Insurance Company, Case No. 6:19-cv-00200, in the U.S. District Court for the Western District of Texas, Waco Division.

UPDATE: The Fifth Circuit ruled on March 18, 2020, that taxes are not included in total loss payouts. 

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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