Grinnell Wrongfully Excludes Sales Tax from Total Loss Payments, Class Action Claims

New to ClassAction.org? Read our Newswire Disclaimer

A proposed class action alleges Grinnell Select Insurance Company has unlawfully failed to include sales tax as part of payments issued for total-loss claims.

The eight-page case alleges Grinnell has breached the terms of its auto insurance policies by excluding sales tax from payments for “direct and accidental loss” to covered vehicles. Per the case, no language in the insurer’s policies “unambiguously excludes” sales tax from total loss payments or contradicts Grinnell’s express promise to pay the sales tax on damaged or stolen property.

The lawsuit claims that the insurer has underpaid possibly thousands of Missouri policyholders whose property damage claims did not include sales tax.

The plaintiff in the case is a Missouri resident who says his 2008 Chevrolet Impala was insured under a Grinnell policy. Per the suit, the plaintiff’s policy stated that Grinnell promised to pay for “direct and accidental loss” to the covered vehicle, and specified that the insurer may decide to pay for the loss in either money or repairs. Moreover, the plaintiff’s policy expressly stated that if Grinnell decides to pay for the loss in money, the payment “will include the applicable sales tax for the damaged or stolen property,” the case relays.

The suit goes on to state that when the plaintiff filed a property damage claim with Grinnell after his vehicle sustained loss or damage in January 2021, the insurer determined that his car was a total loss with a base value of $5,799.91.

The case alleges that Grinnell paid the plaintiff only the car’s value of $5,800.00 minus his $500.00 deductible, for a total payment of $5,300.00. According to the suit, Grinnell breached the terms of its contract with the plaintiff by failing to include sales tax in its property damage 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 argues. “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 plaintiff looks to represent Missouri insureds who, under a policy issued by Grinnell covering a vehicle with private-passenger auto physical damage coverage for comprehensive or collision loss, submitted within the applicable statute of limitations period a first-party property damage claim determined by Grinnell to constitute a covered loss claim where the claim payment did not include sales tax.

Get class action lawsuit news sent to your inbox – sign up for ClassAction.org’s newsletter here.