21st Century Failed to Include Sales Tax in Payments for Totaled Vehicles in Missouri, Class Action Alleges

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A proposed class action alleges 21^st Century Centennial Insurance Company has breached its contracts with policyholders by failing to include sales tax in the amounts paid for totaled vehicles.

According to the 12-page case, 21^st Century represents in its standardized auto insurance policy that it will pay for “direct and accidental loss” to a covered vehicle and that such payment will include, “where required by law, the appliable sales tax for the damaged or stolen property.”

21^st Century has nevertheless failed to include sales tax in payments made to policyholders for their damaged vehicles, thereby breaching its contracts with policyholders, according to the complaint.

The plaintiff is a St. Louis, Missouri resident who says her 2007 Chevrolet Impala was insured under a 21^st Century policy when it sustained damage in an accident in July 2014. After the plaintiff filed a claim for property damage, the defendant determined that her vehicle was a total loss, meaning the insurer would pay for the car’s actual cash value instead of repairs.

Per the case, 21^st Century’s third-party valuation vendor CCC determined that the vehicle’s adjusted value was $7,248.00. The lawsuit alleges that the defendant then added $10.50 for fees to the vehicle’s adjusted value and subtracted the plaintiff’s $1,000 deductible for a total payment of $6,258.50. According to the suit, 21^st Century breached its contract with the plaintiff by failing to include the applicable sales tax in her claim payment.

“Nothing in the Policy unambiguously excludes sales tax or contradicts Defendant’s promise to pay sales tax where it pays for the loss in money,” the complaint contests. “To the extent the applicable limitation on liability is the vehicle’s actual cash value, such limitation does not operate to exclude or subvert Defendant’s explicit and unambiguous promise to include payment for sales tax in its loss payments.”

The lawsuit claims 21^st Century has similarly failed to pay sales tax to potentially thousands of other policyholders in Missouri.

The plaintiff seeks to represent Missouri residents insured under a 21^st Century policy covering a vehicle with private-passenger auto physical damage coverage for comprehensive or collision loss who, within the applicable statute of limitations period and through the date of class certification, submitted a first-party property damage claim determined by the defendant to constitute a covered loss claim and where the claim payment did not include sales tax.

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