Rose Hill, NC asked in Tax Law and Insurance Bad Faith for Pennsylvania

Q: Accident in NC, from PA. The accident was both parties fault. My 3 WEEK SUV totaled. Does insurance pay Taxes on new car

27 Pennsylvania Bulletin 306131; Pa. Code § 62.3 (E)(4) states “A total loss is settled based upon the pre-loss fair market value of the damaged vehicle plus the state sales tax on the cost of a replacement vehicle.” My brand new 2018 Honda CR-V 1,800 miles 3 week old was totaled. Insurance only offered $27,000 for it. I paid $32,000 for it. I did not have gap insurance. I will be in need of a new vehicle. Is ERIE insurance required to pay my sales tax on new car?

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3 Lawyer Answers
Elizabeth Tarasi
Elizabeth Tarasi
Answered
  • Insurance Claims Lawyer
  • Pittsburgh, PA
  • Licensed in Pennsylvania

A: Yes they should. Ask them to pay taxes and transfer associated charges. If the car was financed the lien holder will be paid directly.

Elizabeth Tarasi
Elizabeth Tarasi
Answered
  • Insurance Claims Lawyer
  • Pittsburgh, PA
  • Licensed in Pennsylvania

A: The sales taxes is paid on the car that was damaged not a new car.

Peter N. Munsing
Peter N. Munsing
Answered
  • Wyomissing, PA
  • Licensed in Pennsylvania

A: I'll double check that but generally they pay the taxes on the value of the damaged car.

Next question is their damage value. You need to look at your contract --if the insurance says market value was 27 and you purchased for 32 something odd there. Or does the 32 include the tax? If you bought an increased warranty you are entitled to payment for the unused portion. If it's a valuation difference what you paid would be the value for the vehicle. You say the crash was both parties fault. Get the police report--you may have a claim.

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