GEICO Class Action Says Insurer Doesn’t Pay Actual Cash Value

GEICO faces a class action lawsuit alleging that the insurance company does not pay taxes and fees to consumers when their cars are totaled.

Plaintiff Nathan Sigler alleges he had a vehicle insurance policy through GEICO which provided collision and comprehensive coverage. The policy allegedly said that GEICO would pay “the actual cash value of the property at the time of the loss.” However, Sigler says that GEICO breached the terms of their contract with him and other policy holders by failing to pay the actual cash value of totaled vehicles.

Although the insurance company pays the value of the vehicle itself, it fails to pay sales tax, title transfer fees, and tag transfer fees to consumers whose vehicles were totaled, according to the class action lawsuit. In Illinois, where Sigler is from, these fees can add up to a significant amount. Title transfer fees in the state are a minimum of $95 and the fee to transfer license plates or tags is at least $25. Adding in sales tax for the value of the totaled vehicle, the amount allegedly unpaid by GEICO can be hundreds of dollars.

“GEICO…breaches its contracts with Plaintiff and the other Class members and violates Illinois law, by refusing to pay sales tax, title transfer fees, or tag transfer fees upon the total loss of an insured vehicle,” the GEICO class action lawsuit claims. “Indeed, rather than abide by its contractual obligations and the applicable law, GEICO forces its insureds to first replace the vehicle before GEICO considers the payment of taxes and fees.”

Sigler says he experienced this when his 2001 Dodge Ram was totaled in June 2013. The total loss was determined to be $3,151.95 as calculated by a third party. However, this amount which GEICO paid allegedly failed to include sales tax, title transfer fees, or tag transfer fees. Sigler alleges he was owed $196.99 in sales tax, $95 for the title transfer fee, and $25 for the tag transfer fees.

“Defendant breached its contract with Plaintiff by not including the cost of sales tax, title transfer fees, or tag transfer fees in making the Actual Cash Value payment for Plaintiff’s total loss,” Sigler claims in his GEICO class action lawsuit.

Sigler seeks to represent a Class of consumers who insured a vehicle for physical damage coverage through GEICO, who made a claim under their policy for physical damage, whose claim was adjusted as a total loss within the last ten years, and who were not paid the full total loss vehicle value sales tax, title transfer fees, or tag transfer fees.

The GEICO class action lawsuit seeks compensatory damages, other damages, court costs, and attorneys’ fees.

Sigler is represented by Joel E. Brown; Adam J. Levitt and Daniel E. Ferri of Dicello Levitt & Casey LLC; and Edmund A. Normand and Jacob Phillips of Normand PLLC.

The GEICO Class Action Lawsuit is Sigler v. GEICO Casualty Co., et al., Case No. 1:18-cv-01446-MMM-JEH, in the U.S. District Court for the Central District of Illinois.