Outcome: $6.2 Million Settlement
In Re GEICO General Insurance Company, Case No.: 4:19-cv-03768-HSG in the United States District Court for the Northern District of California
In this consumer class action, the plaintiffs filed a lawsuit against GEICO General Insurance Company, claiming that the company violated the terms of private passenger auto insurance policies issued to them and other policyholders. The allegations revolved around GEICO’s failure to properly include or calculate sales tax for leased vehicles and regulatory fees for all vehicles. The specific accusations include GEICO’s alleged failure to appropriately incorporate or compute sales tax concerning leased vehicles and regulatory fees for all vehicles covered under the insurance policies. According to the plaintiffs, GEICO’s insurance policies stipulate the payment of actual cash value (ACV) in the event of a total loss of a covered auto.
The plaintiffs had two main arguments: First, that GEICO is obligated by the insurance policies to factor in sales tax when settling claims related to leased vehicles. Second, that registration fees for the “remaining term of the loss vehicle’s current registration” should be calculated on an end-of-month basis (contrary to GEICO’s position advocating a beginning-of-month calculation) or, as an alternative, on a daily basis rather than a monthly one.
After multiple mediation sessions, plaintiffs and the insurer reached a settlement. As a part of the settlement agreement, GEICO has agreed to pay $6.2 million to the affected class members, and through changing their practices regarding sales tax on leased-vehicle insureds, this settlement provides $4.8 million in injunctive relief.
Outcome: $3.05 Million Class Action Settlement
In 2022, TZ secured a settlement for consumers in another class action lawsuit against a major property and casualty insurance company. The insurance company agreed to pay $3,050,000 to settle claims that they underpaid thousands of consumers for total loss vehicles that were insured by failing to pay the full actual cash value (ACV) for the lost vehicles. These actions went against the insurance company’s policy that required the payment of ACV for such vehicles. The ACV includes sales tax and other vehicle fees, which the insurance company allegedly ignored.
In addition to the monetary settlement, the insurance company agreed to pay Sales Tax and Title and Registration Fees on total loss vehicles in California.