Lincoln judge OKs class-action settlement in suit over insurer covering sales tax on totaled cars

A Lancaster County judge has approved a class-action settlement in a lawsuit by a Lincoln woman who said her insurance company should have to cover sales tax on a vehicle that's been totaled.

In February, the settlement administrator mailed 7,995 notices and 4,474 email notices to class members eligible for a portion of the $4.2 million settlement collectively.

In 2023, Shelly Burklund sued Farm Bureau Property & Casualty Insurance Company on behalf of herself and others like her who suffered damages due to Farm Bureau's refusal to pay ACV (Actual Cash Value) Sales Tax and Regulatory Fees for total-loss vehicles.

In 2020, Burklund's 2011 Acura RDX sustained damage in a crash, prompting her to file a claim with her insurance company.

Farm Bureau determined the cost to repair the damage exceeded the value of the vehicle and deemed it a total loss, making the company contractually obligated to pay the actual cash value of the totaled car.

But Farm Bureau removed $951 in sales tax from the adjusted value of $13,118 when making the payment to Burklund.

Her attorney said her insurance also should have paid for the sales tax and all regulatory fees imposed by the State of Nebraska, like registration, title and license plate fees, which all needed to be replaced.

In September, Lancaster County District Judge Kevin McManaman certified Burklund's lawsuit as a class-action suit, allowing her to seek money for others in a similar position.

And in December, McManaman gave preliminary approval of the settlement agreement, which would obligate Farm Bureau to create a settlement fund to pay class members up to $4.2 million collectively, and up to $1.26 million in attorneys' fees.

The judge entered final approval of the settlement this month, allowing for Nebraska class members to be paid the state sales tax and local sales tax on the value of his or her total loss vehicle, as well as motor vehicle tax, fee, local wheel tax and registration and plate fees.

A website provides class members additional information at nebraskatotaledcarlawsuit.com.

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