Sales Taxes, Fees Must Be Compensated in Motor Vehicle Total Loss Settlements, Kansas Insurance Commissioner Reminds
Nov 20, 2013
Kansas Insurance Commissioner Sandy Praeger advised in Bulletin 2013-1 issued today, November 20, 2013, that the Kansas Insurance Department (“KID”) has recently received complaints from motor vehicle owners that insurers are refusing to compensate them for sales taxes and fees in settlements for total loss of their property. In response, the KID surveyed a number of insurance companies and confirmed that this regulatory requirement has not been uniformly followed.
Today’s Bulletin reminds property and casualty insurers of their obligation to include sales taxes and fees in all settlements for motor vehicle total loss claims. It also explains how these settlements should be calculated.
When an insurer declares a motor vehicle to be a total loss, Kansas Administrative Regulation 40-1-34 requires the insurer to: (1) offer the owner a comparable replacement motor vehicle, “with all applicable taxes, license fees and other fees incident to transfer of evidence of ownership . . . . ” or (2) pay the owner a cash settlement equal to the actual cost required to purchase a comparable motor vehicle “including all applicable taxes, license fees and other fees incident to transfer of evidence of ownership . . . .”
To view the complete Bulletin, click here.
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