USAA Has Underpaid Total-Loss-Claim Policyholders for Georgia Ad Valorem Title Tax, Class Action Claims

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USAA Casualty Insurance Company is the latest insurer to face a proposed class action that alleges Georgia policyholders who’ve submitted total loss auto claims have been underpaid with regard to the state’s title ad valorem tax (TAVT) and license plate transfer fees. 

The 27-page breach-of-contract lawsuit against USAA further alleges the insurer’s underpayment of TAVT and license plate transfer fees has also resulted in the underpayment of car replacement assistance (CRA) for a proposed “sub-class” of policyholders in Georgia who had a CRA endorsement on their policies.

According to the complaint, the material terms of proposed class members’ USAA private passenger auto insurance policies require the payment of TAVT and license plate transfer fees on collision and comprehensive total loss claims. The USAA policies at issue, the suit says, require USAA to pay “actual cash value” (ACV) on total loss claims, an amount that should reasonably cover replacement costs likely to be incurred by policyholders to replace the vehicle, including TAVT and title and license plate transfer fees. 

Georgia law, according to the case, expressly requires private passenger auto insurers such as USAA who pay total loss claims based on ACV minus deductible to pay applicable taxes and fees based on the total loss vehicle. 

The lawsuit alleges the plaintiff, a Henry County resident, was underpaid for Georgia’s TAVT by more than $295 after submitting a total loss claim: 

“The TAVT at the time of Plaintiff’s loss was 7% of the value of the vehicle set by the 2018 Georgia Motor Vehicle Assessment Manual for Title Ad Valorem Tax (‘TAVT Manual’). Plaintiff’s total loss vehicle was valued at $4,925.00 by the TAVT Manual. As such, the TAVT due on Plaintiff’s claim was $344.75 (.07 x $4,925.00). But USAA paid only $49.25 in TAVT on Plaintiff’s total loss claim.” 

Moreover, the plaintiff was also underpaid by USAA by a minimum of $5 on license plate transfer fees, the case claims. Still further, the amount paid to the plaintiff by USAA on his total loss claim did not include 20 percent of the car’s ACV and title and license plate transfer fees as part of the consumer’s car replacement assistance coverage.

All told, the plaintiff does not dispute the value of the total loss vehicle as determined by USAA or whether his policy and Georgia law require payment of TAVT. The issue, the suit claims, is that USAA paid an “incorrect and insufficient amount” for Georgia’s TAVT. 

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