Lawsuits Claim Drivers Were Underpaid on Total Vehicle Loss Claims
March 19, 2019 Last Updated on September 19, 2019
Important Information
Attorneys working with ClassAction.org are no longer investigating this matter. The information here is for reference only. A list of open investigations and lawsuits can be viewed here.
At A Glance
- This Alert Affects:
- Anyone who received payment from their insurance company for a totaled vehicle in the last 5 years.
- What’s Going On?
- Allegations have surfaced that some car insurance companies are failing to include the cost of sales tax and certain fees when paying out claims for totaled vehicles. A class action lawsuit could help policyholders get back the difference between what they were paid and what they should have been paid.
Case Update
September 19, 2019
Attorneys working with ClassAction.org have decided to close their investigation into this matter due to some unfavorable rulings, among other issues. If you have questions regarding a total loss payout, please contact an attorney in your area. The information below is for reference only. For an active list of investigations, please visit our lawsuit list page.
Attorneys working with ClassAction.org would would like to speak to anyone who submitted a claim to their insurance company after totaling their car.
Drivers may not be getting fully reimbursed for the true value of their cars because some insurance companies are failing to include the cost of sales tax and certain fees in their payouts.
GEICO has already been hit with a lawsuit over this alleged practice and now attorneys working with ClassAction.org are investigating whether other insurance companies can be sued.
Total Loss Claims: Were You Properly Reimbursed?
Recent class action lawsuits allege that some auto insurers’ total loss payouts don’t always reflect the full replacement cost of a totaled vehicle.
Specifically, the suits claim that insurers are failing to reimburse policyholders for sales tax, title transfer fees, registration fees, and tag transfer fees in direct violation of their contracts.
The suits argue that these costs are unavoidable when buying or leasing a new car and therefore should be included in the payout for a totaled vehicle.
Depending on the totaled car’s age, make and model, these fees can add up to hundreds – or even thousands – of dollars. For instance, in the lawsuit against GEICO, the plaintiff alleges that she had to pay at least $75 to transfer her title, along with six percent of her replacement car’s value in sales tax. The total amount added up to approximately $1,500.
How a Class Action Lawsuit Can Help
A class action lawsuit could help drivers get back the difference between what they were paid and what they should have been paid for their totaled vehicle. A successful lawsuit could also require auto insurers to change the way they calculate total loss payouts and serve as a warning to other auto insurers currently engaged in this practice.
What You Can Do
More people are needed to come forward to help determine which, if any, auto insurance companies are currently undervaluing their policyholders’ total loss claims. GEICO and Ocean Harbor Casualty Insurance Company have already been sued over this alleged practice; however, attorneys working with ClassAction.org believe that the problem extends far beyond these two companies.
Before commenting, please review our comment policy.