So we were recently ran off the road in our new van (owned less than 2 hours) and was deemed a total loss. Payout is their value of the van + tax from the initial loan. Everyone around me keeps telling me they are also required to pay tax on a replacement vehicle if we purchase it within 30 days. Is this accurate? I can't seem to find a straight answer anywhere.
Ohio – Does insurace have to cover tax of new vehicle after an accident?
byu/OSU_Tryhard inInsurance
Posted by OSU_Tryhard
3 Comments
They’ll pay you taxes for your totaled vehicle. If they don’t when paying out your settlement then they will when you submit a purchase agreement for a new vehicle.
Ohio Administrative Code 3901-1-54 (H)(7)(f)
>(f) If within thirty days of receipt by the claimant of a cash settlement for the total loss of an automobile, the claimant purchases a replacement automobile, the insurer shall reimburse the claimant for the applicable sales taxes incurred on account of the claimant’s purchase of the automobile, but not to exceed the amount that would have been payable by the claimant for sales taxes on the purchase of an automobile with a market value equal to the amount of the cash settlement. If the claimant purchases an automobile with a market value less than the amount of the cash settlement, the insurer shall reimburse only the actual amount of the applicable sales taxes on the purchased automobile. If the claimant cannot substantiate such purchase and the payment of such sales taxes by submission to the insurer of appropriate documentation within thirty-three days after receipt of the cash settlement, the insurer shall not be required to reimburse the claimant for such sales taxes. In lieu of reimbursement, the insurer may pay directly the applicable sales taxes to the claimant at the time of the cash settlement.
Why would 30 days matter? I’ve never seen that it would. Whether or not sales tax is owed depends on the state laws/statute. You can search online for something like ” insurance sales tax on total loss by state” and click on a website that starts out like “Mathis…”