George Pappas has become the lead plaintiff in a class action complaint, filed in Illinois, against the Michigan-based insurance provider, Auto Club Insurance Association (ACIA). In the class action complaint, Pappas alleges the association is at fault for breaching a contract and for unjust enrichment. He is also seeking a trial by jury along with financial compensation.
Pappas, an ACIA customer, alleges ACIA failed to pay the full amount owed for fees associated with total loss vehicles. His complaint further alleges that the association is fully aware of and willingly underpays in certain insurance claims.
“When plaintiff (Pappas) suffered a total loss of his insured vehicle, the defendant (ACIA) failed to pay him the full amount to which he was entitled to receive for his first-party total loss claims under his ACIA insurance policy. More particularly, the defendant failed to pay the full amount of the title, registration and license plate fees involved with the purchase of a replacement vehicle. Title, registration and license plate fees are mandatory fees involved with the purchase of any vehicle, and therefore part of the actual cash value (ACV) and replacement cost of any vehicle,” a portion of the class action complaint reads.
According to Pappas, his ACIA policy was for private passenger auto insurance, which also included comprehensive and collision coverages for car damages. The policies require payment on total loss private passenger auto physical damage claims of either the ACV of the damaged vehicle or the “amount necessary to repair or replace” the damaged vehicle with another of “like make, model and year,” according to the class action complaint. Pappas is alleging the association breached its contract when it failed to pay the full costs associated with his claim.
“Simply stated, [the] defendant has systematically underpaid its insureds—including plaintiff and the other class members—who have suffered the total loss of their vehicles, by failing to pay the full costs of mandatory title, registration and license plate fees, despite being legally obligated to pay such costs. As a result, on information and belief, [the] defendant has unfairly and unjustly retained substantial sums that should have been paid to policyholders who suffered a total loss of their insured vehicles,” a portion of the class action complaint reads.
According to Pappas, ACIA paid the determined actual cash value of $8,892, with a 7.25% sales tax on that amount and a title fee amount of $120. After he purchased a replacement vehicle, Pappas says he was charged $251 for the mandatory title, registration and license plate fees. Pappas alleges the ACIA’s payment was $131 short.
“Plaintiff has been damaged in the minimum amount of $131.00 by ACIA’s failure to pay the mandatory replacement costs,” a portion of the class action complaint reads.
Due to the allegations mentioned in Pappas’s class action complaint, he is seeking a trial by jury. As of press time the ACIA has yet to respond to the class action complaint. Look to a future edition of glassBYTEs for more information on this suit.