Several class action lawsuits have been filed against multiple insurance companies, including GEICO, State Farm, Allstate, Progressive and First National, over their total loss auto coverage.
These lawsuits cite many claims, including that the companies violated their own policies and have not fully reimbursed customers for the total value of their vehicles following a car accident total loss insurance payout.
The lawsuits against GEICO and State Farm claim that the companies fail to include sales tax and title transfer fees in their valuation, wrongfully deflate values following car accident total loss insurance claims, and rely on invalid and outdated methods to assign a value to vehicle damages.
Sales tax and title transfer fees vary by state but can often add up to hundreds or thousands of dollars. Policyholders claim that insurance companies should be responsible for paying these fees after a total loss car accident claim. One policyholder named as a plaintiff in a class action lawsuit against GEICO claims that she was forced to pay around $1,500 in title transfer and sales tax fees after the total loss of her vehicle.
Car Accident Total Loss Lawsuits
A Florida class action lawsuit filed against GEICO in 2016 claims that the company’s refusal to include sales tax and title transfer fees in total loss valuations violated its own policy language. The plaintiffs in that case argued that sales tax and title transfer fees are mandatory costs associated with replacing a total loss vehicle and that under GEICO’s own policy, the insurer is responsible for all costs associated with replacing or repairing the damaged property. The plaintiffs are suing for breach of contract.
A recent class action lawsuit filed against State Farm claims that the methodology used by the insurance company to assign a value to vehicles after total loss claims is not based on any industry-standard valuation method. The plaintiffs in this lawsuit claim that the company intentionally deflates vehicle value estimations in order to pay out less than the actual pre-loss value of the vehicle. The plaintiffs in the State Farm lawsuit estimate that the insurance company has made millions of dollars from this alleged scheme at the expense of policyholders.
What is a car accident total loss claim?
After a car accident, an insurance adjuster examines vehicle damage and investigates the circumstances of the crash. They use this information to make a value estimate in order to reimburse the policyholder for the damages.
If the adjuster estimates that the cost to repair the vehicle is more than the insured value of the vehicle, the insurance company may “total” the car, or deem it a “total loss.” Often after a total loss is assessed, policyholders are offered the fair market value of the car as estimated on the day of the accident.
If your vehicle was in a car accident and was deemed a total loss by your insurance company, you may be entitled to join a car accident total loss investigation or loss suit if the company did not pay the sales tax or title transfer fees associated with replacing the vehicle.