The insurance behemoth GEICO has struck a $5.1 million class action settlement over its management of Georgia’s auto loss taxes, which is a noteworthy move. The settlement comes in response to claims that GEICO broke Georgia law by not accounting for specific taxes and fees when determining the total amount of losses that policyholders would receive.
This lawsuit seeks to compensate impacted policyholders and emphasizes the significance of honest and open business procedures in the insurance sector.
GEICO was accused in the class action complaint of wrongfully withholding sales taxes and other fees from total loss payments issued to policyholders in the state. The lawsuit was initially filed in state court in Georgia.
The plaintiffs contend that to guarantee that policyholders are fairly compensated for their automobiles, insurers are required by Georgia law to incorporate these taxes and fees into their total loss payouts.
GEICO has agreed to pay qualifying class members who were impacted by the alleged misbehavior $5.1 million as part of the settlement. In addition, the settlement mandates that GEICO modify its procedures for calculating total loss compensation to conform to Georgia law. When estimating the value of a total loss car, this includes precisely accounting for all relevant taxes and levies.
For Georgia policyholders who might have been underpaid due to GEICO’s handling of motor loss taxes, the settlement is a triumph. The class action lawsuit reminds insurance firms that they must follow state laws and behave in the best interests of their clients by holding GEICO responsible for its actions.
It’s critical to remember that although this settlement compensates the impacted policyholders, it also draws attention to the larger problem of justice and openness in the insurance sector. Policyholders should always thoroughly read through their insurance plans and understand their legal rights in each state. To safeguard their rights, customers might need to seek legal counsel if they think their insurance has behaved unfairly or illegally.
All things considered, the way this class action lawsuit was resolved makes it very evident that insurance firms have a duty to respect policyholder rights and adhere to state requirements. It is a reminder of the value of transparency and equity in the insurance sector as GEICO attempts to alter its operations in Georgia.
To address allegations that it did not accurately compute and pay taxes when processing auto loss claims, Geico consented to a $5.1 million settlement.
Georgia Geico policyholders with auto insurance who had a covered total loss auto claim between April 29, 2014, and December 31, 2019, and received a total loss payment that did not include the full payment of title ad valorem tax (TAVT) will benefit from the settlement.
The class action lawsuit’s plaintiffs contend that Geico broke Georgia law by neglecting to include TAVT in its total loss payouts for cars. In Georgia, TAVT, a one-time fee paid on a title, takes the place of annual motor vehicle taxes and sales tax.
Geico is an insurance provider offering plans for vehicles, homes, renters, motorbikes, boats, and businesses.
Despite agreeing to a $5.1 million deal to end the insurance class action case, Geico has not acknowledged any wrongdoing.
Class members may be eligible to receive a cash payout under the settlement terms, which are dependent on the appropriate tax rate on the date of their losses. Class members who have already received a full tax payment will not get any more money, and those who have already received partial payments under the insurance process may have their settlement payments reduced.
May 3, 2024, is the deadline for objections and exclusions.
June 6, 2024, is the date of the Geico settlement’s final approval hearing.