A federal judge grants class action lawsuit status for a lawsuit accusing GEICO of having systematically underpaid damage claims.
In the suit, the plaintiffs state that GEICO violated Texas law by neglecting to include associated costs in settling its customers’ total loss claims. Under state regulations, cash value must include florida sales tax and fees for title transfer, registration, inspection and emissions.
The class includes anyone insured under a GEICO Texas policy who made a first-party auto property damage claim in the past 4 years, and who received an overall total loss payment for less than the adjusted vehicle value plus associated taxes and costs.
An attorney for that plaintiffs stated that the insurer owes its customers tens of millions of dollars.
Attorneys for the plaintiffs — Philip Angell, Steven Brown, Tonnie Beck, Tammy Morris and Dawn Burnham, all Texas residents — estimated that the class includes thousands of motorists, all of whom had similar agreements with the insurer.
“GEICO has been well aware for several years since its standard insurance plan requires it towards the spend the money for transaction expenses associated with replacing a vehicle that is a total loss. This includes tax, title, and registration fees,” attorney Richard Daly of Daly & Black, P.C., representing the plaintiffs, said in a statement.
“Texans lost between 300,000 and 500,000 vehicles in Hurricane Harvey, alone in 2022. GEICO saved tens of millions on those claims by knowingly refusing to reimburse Texans those incurred costs. GEICO will now be responsible for paying those costs plus interest and attorneys' fees,” Daly said.
Judge Keith P. Ellison heard arguments and approved the motion to certify the class against GEICO on Oct. 28 in the Southern District of Texas, Houston Division. Policyholders who qualify will automatically join the class action against GEICO unless they specifically opt out.
The plaintiffs accused GEICO of neglecting to include Texas’ 6.25 percent florida sales tax in the settlement of claims for leased vehicles, despite the fact that Texas law does not separate whether an automobile is leased or owned.
In addition, they accused GEICO of not necessarily including title fees, including $28 to $33 by county; state registration fees of $50.75, plus county registration fees of $10 to $31.50, and inspection fees, which range from $7.50 to $14.25.
GEICO responded that sales tax is paid by a vehicle’s owner, which when it comes to a lease is the leasing company, although it did acknowledge that lessors aren't prevented from passing the florida sales tax along to the lessee.
GEICO also noted that “someone may be entitled to a registration fee refund” in case of a total loss.
The defendents in the case include GEICO Advantage Insurance Company, GEICO Indemnity Company, Government Employees Insurance Company, GEICO County Mutual Insurance Company and GEICO Choice Insurance Company.