American Family Insurance Vehicle Actual Cash Value Class Action

When an insured passenger vehicle is declared a total loss, the insurance company will pay the owner or lessee the actual cash value (ACV) of the vehicle. The complaint for this class action alleges that American Family Insurance Company does not properly calculate the ACV, because it does not include the sales tax, title transfer fee, or registration fee for a new vehicle.

Plaintiff Iliana Perez insured her 2009 Honda Accord with American. The policy included physical damage coverage. When she was in an accident ono December 23, 2018, American declared the car a total loss.

In calculating the ACV, the complaint says, American used the third-party vendor Autosource Market-Driven Valuation. Autosource began with a base value of just below $8,000. Then it made condition adjustments and subtracted Perez’s $500 deductible to arrive at a Net Adjusted Market Value of $6,458.

Autosource’s figuring did not include any amounts for sales tax or for title or registration fees. According to the complaint, these items should be part of the ACV payout because they are mandatory when replacing a vehicle. The complaint claims that American should have added in $452.27 for sales tax (at 6.25%), $95 for the title transfer fee, and $25 for the tag transfer fee.

American’s policy papers say that its liability for the loss of the vehicle will not exceed the lesser of either “the actual cash value of the stolen or damaged covered property” or “the amount necessary to repair or replace the stolen or damaged covered property.” In declaring the car a total loss, American has determined that there will be no repairs and no replaced parts. The policy does not specifically define ACV, but it does not specifically exclude or defer payment of sales taxes or regulatory fees, and it does not require the subsequent purchase of a replacement vehicle.

The class for this action is all persons (a) who insured a vehicle for physical damage under an Illinois auto insurance policy issued by American Family Insurance Company that provided for an ACV payment for vehicles declared a total loss, (b) who made a claim for physical damage, (c) where the claim was adjusted as a total loss, between February 11, 2010 and the date of the class certification order in this case, (d) whose total loss payout for the vehicle did not include sales taxes or mandatory regulatory fees.

The complaint alleges breach of contract and asks for declaratory relief.

Article Type: Lawsuit
Topic: Insurance

Most Recent Case Event

American Family Insurance Vehicle Actual Cash Value Complaint

February 11, 2020

When an insured passenger vehicle is declared a total loss, the insurance company will pay the owner or lessee the actual cash value (ACV) of the vehicle. The complaint for this class action alleges that American Family Insurance Company does not properly calculate the ACV, because it does not include the sales tax, title transfer fee, or registration fee for a new vehicle.

American Family Insurance Vehicle Actual Cash Value Complaint

Case Event History

American Family Insurance Vehicle Actual Cash Value Complaint

February 11, 2020

When an insured passenger vehicle is declared a total loss, the insurance company will pay the owner or lessee the actual cash value (ACV) of the vehicle. The complaint for this class action alleges that American Family Insurance Company does not properly calculate the ACV, because it does not include the sales tax, title transfer fee, or registration fee for a new vehicle.

American Family Insurance Vehicle Actual Cash Value Complaint
Tags: Actual Cash Value, Auto Insurance, Insurance