GEICO likely to pay policyholders more than $19 million across claims

A federal class action lawsuit was filed in 2019 and was combined last year with a second lawsuit filed in 2020. The compound complaint alleges that GEICO violated private auto insurance policies by improperly calculating or not including sales tax for the purpose of purchasing a replacement vehicle. Total loss claim. Some plaintiffs also allege that GEICO failed to pay local and state regulatory costs. At least one of his plaintiffs alleges sales tax was not paid because his car was leased rather than owned, which he claims violates policy terms. .

Settlement classes are divided into two types of plaintiffs – those who are obligated to pay sales tax and those who are obligated to pay regulatory fees. Class Members shall be entitled to a claim under Section III (Inclusive or Collision Coverage) of the Carrier’s Policy during the period of the class in which GEICO paid the total loss claim and the policyholder did not retain the salvaged vehicle. Includes adjusted GEICO Personal Passenger Motor Vehicle Physical Accident Policyholders. The class period is June 27, 2015 if you have GEICO General insurance, October 23, 2016 if you have GEICO Indemnity insurance, GEICO Casualty or Government Employees Insurance Company insurance. from June 30, 2017 to August 27, 2020 if you are a member of

The majority of class members include those who are allegedly obligated to pay regulatory costs. The interim settlement agreement was approved in July. He has scheduled a hearing on the final settlement terms on December 15th. In the meantime, claim forms to be included as a class member must be submitted by November 11th. A policyholder who wishes to be excluded from the class must submit his application by October 27th. , 2022. Request forms and information regarding the class exclusion process are available here.

The interim agreement estimates the average sales tax class bill to be $2,051.98. This is based on an average vehicle price of $23,318.00 and an average sales tax rate of 7.25% plus local sales tax. More than 218,000 members of the regulatory fee class are expected to receive $6.88 each, according to court documents. This equates to half the average monthly payment for regulatory fees. Class members of 25% to 30% of sales tax and 20% to 25% of regulatory fees are expected to claim a settlement.

GEICO initially asked the court to dismiss or stay both cases pending the outcome of calling an assessment under the affected policy. Many automobile insurance policies contain valuation clauses that allow the policyholder and/or insurer to conduct a third-party valuation if a vehicle valuation agreement cannot be reached. A low valuation often leads to a total loss of a vehicle that could have been repaired. Both the carrier and the policyholder employ independent appraisers, and if the appraisers disagree, a umpire is selected to make the final decision.

GEICO has also agreed to change its business practice to prorate regulatory fees included in total loss claim payments on a daily rather than monthly basis. A hearing is scheduled for his Dec. 15 to determine whether to grant final approval of the settlement.

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