In recent years there have been class action lawsuits filed claiming that insurance providers violate their own contracts by failing to reimburse policyholders for sales tax, title transfer fees, tag transfer fees, and more after what is considered a “total loss” car accident.1
What does this accusation entail? Under certain coverages, an insurance provider may be required to pay for all costs associated with a totaled vehicle, specifically the taxes and fees that are paid when the vehicle is purchased. The aforementioned cases are brought when a provider is accused of failure to cover the total cost of a “total loss”.
Actuaries are employed by insurance companies to reduce risk and make sure the company is making financial decisions that are in its own best interest. Actuaries are paid well to do so, with the 2018 median pay for an actuary coming in at over $100,000 per year.2 This means that when you are involved in an automobile accident, there are many well-trained and well-paid people working to put the insurance company’s interests first.
It is not uncommon to hear of an insurance provider offering quick payment to an accident victim in exchange for signing off on closing the claim. This, however, should not be done until you know you are being fully compensated per your coverage and rights.
It is recommended to regularly review your insurance coverage to:
1) Ensure that you have the proper coverage for your vehicle.
2) Refresh your knowledge of everything that is covered under your policy.
This second point is important to ensure that you aren’t getting taken advantage of when an insurance provider offers payment in exchange for closing the claim.