A class action lawsuit against Geico insurance company was filed in November 2022 alleging the company uses an unfair and deceptive practice of not paying sales tax on total loss vehicle claims. The lawsuit asserts Geico unlawfully keeps the sales tax that should legally be paid to the vehicle owner.
Geico Class Action Lawsuit 2022
In November 2022, a class action lawsuit was filed against Geico in Missouri federal court. The plaintiffs allege that when Geico declares a vehicle a total loss after an accident and agrees to pay the actual cash value to the policyholder, it does not include sales tax in the payment. This results in the plaintiffs receiving less money than they are owed according to their insurance policies.
The Geico class action lawsuit claims breach of contract, bad faith, and violation of state consumer protection laws. It seeks to represent all Geico auto insurance customers nationwide who received a total loss payment that did not include sales tax in the past six years. The plaintiffs estimate the class contains over 100,000 members. They are asking Geico to pay the owed sales tax amounts plus interest, as well as punitive damages.
Geico’s auto insurance policies state they will pay the actual cash value for total loss vehicles. The lawsuit contends sales tax is part of the actual cash value calculation under industry standards and state laws. By not paying the sales tax, Geico illegally profited while leaving plaintiffs without the full replacement cost promised in their policies.
The plaintiffs point out that most states require people to pay sales tax when replacing a totaled vehicle. So when Geico doesn’t reimburse the tax, the policyholder loses that money twice – once to Geico and again to the state. They argue Geico’s failure to pay sales tax constitutes a breach of contract and violates insurance regulations in the states named in the lawsuit.
Geico has not yet filed a response to the class action lawsuit allegations. The company gave no comment to the media about the pending litigation.
FAQs
What is the Geico class action lawsuit about?
The Geico lawsuit alleges the insurance company engages in an unfair practice of not paying sales tax on total loss vehicles. Plaintiffs claim this results in lower payments than Geico policyholders are entitled to receive under their policies.
What types of damages are the plaintiffs seeking?
The Geico lawsuit seeks to recover owed sales taxes not paid on total loss claims over the past six years. It also requests interest, punitive damages, attorney fees, and litigation expenses.
Who is eligible to join the Geico class action?
The potential class includes Geico auto insurance policyholders nationwide who received a total loss payment within the past six years that did not include state and local sales tax reimbursement.
What states are included in the Geico lawsuit?
While seeking to represent a nationwide class, the lawsuit specifically names plaintiffs from Utah, Arkansas, Idaho, Indiana, Kentucky, Mississippi, New Mexico, New York, Ohio, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas and West Virginia.
When was the Geico class action lawsuit filed?
The lawsuit was filed on November 2, 2022 in the U.S. District Court for the Western District of Missouri. The case number is 6:22-cv-03019.
Has Geico responded to the lawsuit allegations? As of November 2022, Geico has not formally responded to the pending class action lawsuit and declined media requests for comment due to the ongoing litigation.
How can I join the Geico class action lawsuit? The lawsuit is still in the early stages. Typically a plaintiff’s class action law firm will set up a website with information on how class members can register to receive updates and join the suit once the class is certified.
Has Geico paid sales tax on total loss claims in the past? The class action lawsuit alleges Geico stopped paying sales tax on total loss vehicles at some point over the last six years. Previously, the standard industry practice was including sales tax reimbursement.
How much money could Geico owe in sales tax? While not specified, the lawsuit claims over 100,000 Geico customers could be owed sales tax payments illegally withheld by Geico. Even at just 5% sales tax, that could easily exceed $50 million across the entire class.
While not the only auto insurance company facing legal action for deceptive business practices (a class action lawsuit was also filed against Orangeburg Pipe called Orangeburg Pipe Lawsuit for allegedly selling faulty PVC piping that led to property damage for homeowners), the sales tax allegations against Geico show another way insurers may be misleading consumers and profiting illegally off their own policyholders’ misfortune following accidents.
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