Auto Club Insurance Association Underpaid Total Loss Claims, Class Action Alleges

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A proposed class action lawsuit claims Auto Club Insurance Association failed to pay insureds for the full cost of certain fees required to replace vehicles that were declared total losses.

The case alleges that although Auto Club, which is affiliated with American Automobile Association (AAA), states in its insurance policies that it will cover the “actual cash value” of the damaged vehicle or the “amount necessary to repair or replace” the car with a comparable alternative, the defendant consistently underpays policyholders for mandatory title, registration and license plate fees. These expenses, the lawsuit explains, should be included in the cost of replacing a vehicle given that drivers are obligated to pay such fees in order to legally operate the vehicle.

The plaintiff says he submitted a total loss claim to Auto Club after an August 2019 car accident and was paid for the estimated value of his car, as well as 7.25-percent sales tax and a “title fee” in the amount of $120.00. After replacing his vehicle, the man was allegedly charged a total of $251.00 for the mandatory title, registration and license plate fees, which exceeded Auto Club’s payment by $131.00.

According to the lawsuit, the plaintiff’s experience was not merely an “isolated incident” but rather is a reflection of the defendant’s overall business practices that have likely affected “thousands” of potential class members.

The lawsuit, which echoes claims in similar suits filed against Geico and Liberty Mutual, seeks to cover the following proposed class:

The full complaint can be read below.