in Newswire Published on November 3, 2021

Class Action Claims Mid-Century Insurance Underpaid Total Loss Claims in Georgia

Tyler v. Mid-Century Insurance Company

Filed: November 1, 2021 ◆§ 1:21-cv-04514

A lawsuit claims Mid-Century Insurance failed to properly calculate in accordance with state law the amounts owed to Georgia insureds for total loss settlements.

Defendant(s)

Mid-Century Insurance Company

Law(s)

State(s)

Georgia

Categories

Automotive

A proposed class action claims Mid-Century Insurance Company has failed to properly calculate in accordance with state law the amounts owed to Georgia insureds for total loss settlements.

The 18-page case more specifically alleges Mid-Century has underpaid policyholders whose covered vehicles were declared a total loss by calculating Georgia’s motor vehicle title ad valorem tax (TAVT) based on the insurer’s estimated value of the totaled car rather than its value as stated in the Georgia Motor Vehicle Assessment Manual.

The plaintiff, a DeKalb County resident whose vehicle was insured under a Mid-Century private passenger auto policy, stresses in the complaint that her dispute is not over the actual cash value of her totaled vehicle as determined by the defendant’s market valuation vendor or whether her insurance policy and Georgia law require the payment of TAVT as part of a total loss settlement. Instead, the plaintiff’s proposed class action challenges the amount of the TAVT as calculated by Mid-Century. From the complaint:

“The only issue before the Court is whether Defendant was required to pay TAVT based on the TAVT requirements of Georgia law, or whether Defendant could apply the TAVT rate of 7% to its valuation vendor’s determination of vehicle value (which is a method not permitted by Georgia law). The method of determining TAVT under Georgia law results in a TAVT of $395.50, whereas the different (outside Georgia requirements) method utilized by Defendant resulted in a lower TAVT of $342.72. Plaintiff was harmed in the amount of $52.78 plus interest due to Defendant’s underpayment of TAVT.”

According to the case, Georgia law requires auto insurers who pay total loss claims based on a covered vehicle’s actual cash value to include in the settlement “applicable taxes and fees based on the total loss vehicle,” including the TAVT, which replaced the state’s mandatory auto sales tax in 2013. The law stipulates, however, that between March 1, 2013 and December 31, 2019, the TAVT was determined by applying the applicable TAVT rate to the fair market value of the vehicle as stated in the Georgia Motor Vehicle Assessment Manual for Title Ad Valorem Tax, the suit explains.

Despite the clear requirements of state law, Mid-Century calculated the TAVT amount due to the plaintiff by applying the seven-percent TAVT rate to the value of her car as determined by the insurer’s vehicle valuation provider, the case claims. Because the vendor’s valuation of the plaintiff’s vehicle was lower than its value as stated in the Georgia Motor Vehicle Assessment Manual, Mid-Century underpaid the plaintiff by roughly $52.78, according to the complaint.

The lawsuit claims Mid-Century violated both the terms of its insurance policies and Georgia law by failing to pay the full amount of the TAVT on totaled cars in accordance with state law.

The case looks to represent insureds under any Georgia policy issued by Mid-Century who submitted a covered first-party physical damage claim that was adjusted as a total loss and who received a total loss payment from the defendant that did not include the entirety of the TAVT due under the policy and Georgia law between March 1, 2013 and December 31, 2019.

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