Total Loss Car Accident Class Action Lawsuits

When your car is a total loss, it means that the cost to repair the vehicle exceeds its actual cash value (ACV). The ACV represents the amount the car would sell for in the current market, accounting for depreciation. Insurance companies use this assessment to determine a total loss. If the repair costs surpass the vehicle’s value, the car is classified as a total loss.

After your car is declared a total loss, your insurance company will typically provide a settlement based on the value of the vehicle before the accident. This settlement amount is known as the Actual Cash Value (ACV), which is calculated by considering the market value of your car, minus any applicable deductibles.

Total loss car accident class action lawsuits filed against insurance providers claim that the companies violate their own contracts by failing to reimburse policyholders for sales tax, title transfer fees, tag transfer fees, and more after a total loss car accident. The total loss car accident class action lawsuits argue that sales tax and other fees “are components of ‘actual cash value’ under the policy.”

Policyholders can argue that costs such as sales tax and title fees are mandatory when purchasing or leasing a replacement vehicle to replace a total loss vehicle.

You may qualify for this investigation if:

1. Your vehicle was totaled after a car accident
2. Your insurance company paid for the total loss and not the other driver’s insurance company.

If you were insured under an auto insurance policy, experienced a total loss car accident, and were not reimbursed for sales tax and other fees by your insurance company in the last 5 years, you may qualify to join a total loss car accident class action lawsuit investigation.

Yes, depending on the coverage of the policy. The coverage on a rental is usually limited to a maximum of 30 days, seldom long enough to resolve a total loss claim, especially where the insured can’t accept the insurance company’s offer.

According to DMV.org, a damaged vehicle is labeled a “total loss” by the insurance company “when the cost to repair the vehicle to its pre-damaged state exceeds the cost of the vehicle’s worth, or actual cash value”. Determining whether a vehicle is a total loss depends on the car insurance company’s standards, the vehicle’s condition, and state laws.

After a total loss car accident, owners may have to pay costs like the car’s sales tax, title transfer fees, and other costs. The car’s value is usually assessed as the fair market value of the car on the day of the accident. After an accident occurs, the insurance company assesses the damage done to a car so they can make a determination of how much the insurance company should reimburse the policyholder. Car insurance policies should cover the cost of all of the fees and expenses associated with a total loss car accident. However, some companies may just be covering the cost of the car itself after a total loss car accident, in an effort to pay out less money in a claim.

If you disagree with the settlement, you can dispute and challenge the amount. You can also sue if you are treated unfairly. Insurance companies will generally ask you to provide documentation to back up the reason for your disagreement. Insurance companies then review the documentation for accuracy and applicability to the total loss vehicle. If there is still disagreement, state law and the terms of your policy describe how an appraisal process will resolve the differences.

Your insurance company will hire an appraiser to appraise your vehicle. If you do not hire your own appraiser, then the insurance company will pay you what they deem is appropriate. In effect, you will be stuck with the insurance company’s valuation of your vehicle. Once both appraisers have compiled their reports, they try to reach an agreement on the value of your vehicle before scheduling a formal hearing, and make a determination as to which appraiser is right about the vehicle’s value.

Low-Ball Offer.

Compelling a policyholder to institute litigation to recover amounts due under an insurance policy by offering substantially less than the amounts ultimately recovered in actions brought by insureds, when the insureds have made claims for amounts reasonably similar to the amounts ultimately recovered, is an unfair practice. [Insurance Code § 790.03(h)(6)] The California Insurance Commissioner Regulations states in part: “No insurer shall attempt to settle a claim by making a settlement offer that is unreasonably low.” [California Code of Regulations Title X, Chapter 5, Subchapter 7.5, § 2695.7(g)]

“Forcing” appraisal.

An insurer’s delay in payment of first party benefits could be found to have been made unreasonably, thereby “forcing” the insured to go through an appraisal procedure. If such a finding is made, that would constitute a breach of the implied covenant of good faith and fair dealing, which will support a claim for bad faith. [Bernstein v. Travelers Ins. Co., 2006 WL 2567875, pg. 6-7 (N.D. Cal. 2006)

Delay in making payments.

The actionable withholding of benefits may consist of unreasonably delaying payments when due. [Major v. Western Home Ins. Co., 169 Cal. App. 4th 1197, 1209, 87 Cal. Rptr. 3d 556 (4th Dist. 2009)] Insurance Code section 790.03 defines as deceptive acts or practices in the business of insurance certain acts performed by an insurer towards its insured. An insurer: “Not attempting in good faith to effectuate prompt, fair, and equitable settlements of claims in which liability has become reasonably clear is an unfair practice.”