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GEICO Can’t Shake Claims Over Fee Coverage on Totaled Cars

July 22, 2021, 5:26 PM

GEICO General Insurance Co. must defend a proposed class action seeking coverage for regulatory fees its insured drivers need to pay after a total-loss claim to get back on the road, the District of Connecticut ruled.

Named class member Alan McNichols may proceed with breach of contract claims because the insurance policy is ambiguous, the U.S. District Court for the District of Connecticut said Wednesday.

The policy commits to reimburse policyholders for the “actual cash value” of the property, which it defines as “the replacement cost.” But the term “replacement cost” is itself ambiguous, the court said.

The dictionary definitions ...