There have recently been a series of successful class action cases filed in California and New York that deal with breach of contract by auto insurance companies for failure to pay “Actual Cash Value” (“ACV”) in the event of a total loss of an insured vehicle. Suits are being filed because insurance companies are not accurately calculating their ACV payouts. In these cases, the actual cash value does not include the sales tax, title transfer fee, or registration fee for a new vehicle.
Pursuant to the terms of the policies, ACV includes state sales tax and state-mandated regulatory fees. In violation of their policies, however, certain insurance carriers refuse to pay the mandatory regulatory fees (or, in some cases, underpays mandatory regulatory fees) when they pay out ACV to their insureds who have suffered a total loss of their insured vehicle.
Currently, we are aware of cases in which Allstate (in California), State Farm, USAA, and Geico (in NY) have been sued.
Claims are currently being filed in your area
In one case filed in New Jersey against American Famly Insurance on February 11, 2020, the plaintiff insured her 2009 Honda Accord with American. The policy included physical damage coverage. When she was in an accident on December 23, 2018, American declared the car a total loss. The complaint states that in calculating her vehicle’s ACV, American used the third-party vendor Autosource Market-Driven Valuation. Autosource began with a base value of just below $8,000. Then it made condition adjustments and subtracted the plaintiff’s $500 deductible to arrive at a Net Adjusted Market Value of $6,458. Autosource did not include any amounts for sales tax, title, or registration fees. According to the complaint, these items should be part of the ACV payout because they are mandatory when replacing a vehicle.
How Can We Help?
Do you live in Pennsylvania or New Jersey, and have been involved in an automobile accident resulting in total loss of your vehicle? If your insurance policy is written through any of the following carriers, you could be eligible for compensation:
Travelers Companies Inc.
Erie Insurance Group
NJM Insurance Group
Hartford Financial Services
Berkshire Hathaway Inc.
Nationwide Mutual Group
American Insurance Group (AIG)