Liberty Mutual has failed to pay the full amount of certain taxes and fees as part of insurance payments to policyholders whose vehicles were declared a total loss, a proposed class action alleges.
The 82-page lawsuit claims the terms of defendant LM General Insurance Company’s auto insurance policies promise that the insurer, in the event of a total loss claim, will pay the “actual cash value” of a vehicle, an amount that should include sales tax and title and license plate transfer fees. According to the case, however, Liberty Mutual employs a policy of cheating Georgia policyholders by paying “an incorrect and insufficient amount” for the state’s title ad valorem tax (TAVT) and title and license plate transfer fees, and thus underpays total loss claims.
“Liberty Mutual breached its insurance policy with each Class Member by failing to pay the full TAVT, title transfer fee, and license plate transfer fee owed on the Class Member’s total loss claim,” the complaint alleges.
In March 2013, Georgia replaced sales tax on motor vehicles with a title ad valorem tax, which, for private purchases or those under a seller-financed sales arrangement, is determined based on the vehicle’s value as set by the Georgia Motor Vehicle Assessment Manual for Title Ad Valorem Tax, the case says. According to the suit, the TAVT due on most proposed class members’ vehicles is “thus easy to identify” given the cars’ values and percentage TAVT are listed in the manual.
The case goes on to state that Liberty Mutual’s auto insurance policies require the insurer to pay for a vehicle’s “actual cash value” on first-party total loss claims. Though the term “actual cash value” is not defined in the policy, it “reasonably includes” replacement costs that are likely to be incurred to replace the totaled vehicle, the suit says. Per the case, the terms of Liberty Mutual’s policy indicate that if the insurer pays for a policyholder’s loss in money, the payment “will include the applicable sales tax for the damaged or stolen property.”
Georgia law, the complaint relays, also requires insurers who pay for total losses in money to include in such payments “all applicable taxes, license fees and other fees incident to the transfer of ownership of a comparable automobile.” Within the past six years, i.e., the period covered by the lawsuit, Georgia law imposed a mandatory TAVT of between 6.6 and 7 percent of a vehicle’s fair market value (as determined by the TAVT manual), an $18.00 title transfer fee and a $5.00 license plate transfer fee, the lawsuit says.
According to the case, Liberty Mutual has failed to pay the full amount of taxes and fees on Georgia policyholders’ total loss claims.
The plaintiff, whose 2002 Lexus SC 430 was declared a total loss after an October 2017 car accident, says Liberty Mutual determined that she was owed $458.02 for “taxes and fees,” which included a seven-percent tax on the adjusted vehicle value and an $18.00 title transfer fee. Per the suit, however, the plaintiff should have been paid $616.00 for the TAVT as determined by seven percent of the vehicle’s value in the Georgia TAVT manual, a minimum $18.00 title transfer fee and a minimum $5.00 license plate transfer fee. Thus, Liberty Mutual underpaid the plaintiff by $180.98 for her total loss claim, the lawsuit argues.
According to the case, the plaintiff and other Georgia policyholders have been harmed by Liberty Mutual’s alleged breaches of its contracts with customers and violations of state law.
The lawsuit looks to cover the following class:
“All insureds under any Georgia policy issued by Liberty Mutual who, during the time six years before the filing of this lawsuit through the date of a class certification order, submitted a covered first-party physical damage claim, whose claim was adjusted as a total loss, and who received a total loss payment from Liberty Mutual that did not include all the TAVT, title transfer fees, and license plate transfer fees due under the policy and Georgia law.”
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