USAA nears settlement deal in Georgia underpayment class action suit

Judge grants preliminary approval

USAA nears settlement deal in Georgia underpayment class action suit

Insurance News

By Mika Pangilinan

A Georgia federal judge has granted preliminary approval to a deal settling a class action lawsuit accusing USAA of underpaying taxes in total loss claims.

Around 9,000 policyholders joined the suit, claiming that they were not properly compensated for title ad valorem tax (TAVT) under their USAA policies.

The plaintiffs have sought a settlement close to $2.3 million, according to Repairer Driven News, with each owed an average of $252.

The judge also ordered USAA to pay nearly $573,000 in attorney’s fees.

The lawsuit was initiated by Jahazel Black, who argued in her 2021 complaint that USAA failed to fully cover the TVAT on her insured 2009 Honda Civic Sedan LXS that was totaled following an accident in October 2018.

USAA deemed Black’s car to have a base value of $5,291 and an adjusted value of $4,345. However, the insurer issued a final payment of $4,277 after accounting for various fees.

Black’s complaint argued that the TAVT on her car amounted to 7% of its value, indicating that she should have received an additional $295.50 on top of the $49.25 that USAA reimbursed.

The lawsuit also claimed that USAA failed to compensate Black for license plate transfer fees, which amounts to a minimum loss of $5.

It went on to allege that USAA breached its policy with the plaintiff and violated Georgia law by not fully covering the TAVT and license plate transfer fees in the total loss claim.

Similar instances of underpayment were outlined by other plaintiffs in the class action suit.

A final hearing is scheduled for December 13, during which the suit is expected to be settled.

Last year, USAA was hit with a lawsuit by a policyholder in California over allegations that it charged excessive premiums during the last two years of pandemic-related lockdowns.

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