When an insurance company must pay the actual cash value (ACV) of a total-loss vehicle, what should that include? The complaint for this class action alleges that Imperial Fire and Casualty Insurance Company does not include amounts for sales tax or title and registration fees in calculating ACV. Its refusal to pay these amounts, the complaint says, is a breach of contract.
The class for this action is all insureds with a Florida policy issued by Imperioal Fire and Casualty Insurance Company for a vehicle with private-passenger physical damage coverage for comprehensive or collision loss, who made a first-party claim for a total loss and who received an ACV payment from Imperial that did not include amounts for sales tax or title or registration fees, within the applicable statutes of limitations up to the date of the certification of the class in this case.
Plaintiff Stephany Carvajal had a 2017 Audi A4. It was insured by Imperial, with physical damage coverage, including collision or other than collision coverage. The Audi was involved in an accident on May 28, 2019 and Imperial declared it a total loss.
Imperial used Kelley Blue Book Co., Inc. to create a report on the value of the vehicle. Based on that report, Imperial came up with a base market value of $26,148. It subtracted $349.20 for towing or storing overages and subtracted Carvajal’s $1,000 deductible for a total payment of $24,798.80. No sales taxes or transfer fees were included in this amount.
According to the complaint, because these fees are mandatory and the vehicle cannot be replaced without paying them, they should be included in the ACV settlement amount.
The complaint says, “Controlling case law from the Florida Supreme Court, Florida’s appellate courts, the Eleventh Circuit Court of Appeals, and Florida’s federal district courts hold that the term ‘actual cash value,’ when undefined in an Insurance Policy, should be defined as the repair or replacement cost minus depreciation—a definition that would include the sales tax necessarily incurred upon replacement of the insured vehicle.”
Other cases’ findings are quoted in the complaint. One says sales tax “should be included in an ACV payment if it is ‘reasonably likely’ that the insured would incur” that cost in replacing a vehicle. A second says that “the court concludes that [sales tax and title transfer fees] are components of actual cash value under the Policy and are therefore due to be paid to the insured…” Finally, a third says that “state and local taxes are part of the cost of replacing an item” and so should be part of the ACV.