2026 Q2 Insurance Class Action Update: Key Rulings on Total Loss Valuation, Wildfire Claims
Insurance in-house counsel and litigation teams must track these rulings because the en banc Sixth Circuit resolved a circuit split to uniformly bar class certification in total loss auto valuation class actions, while new decisions also limit misrepresentation class theories, enforce appraisal clause mootness, and prohibit sales tax depreciation in California wildfire claims.
The second quarter of 2026 produced four key rulings impacting insurance class action and claims practices. First, the en banc Sixth Circuit reversed its prior panel precedent to join all other federal circuits in holding that individualized issues of each totaled vehicle’s unique value predominate over common issues, making class certification impermissible under FRCP 23(b)(3) for total loss valuation class actions challenging third-party valuation service adjustments. Second, the Northern District of Illinois rejected an attempt to certify a total loss valuation class under misrepresentation theories, finding individualized injury inquiries would predominate. Third, an Ohio appellate court held that a policy’s contractual appraisal clause that results in a higher plaintiff payment moots putative class claims. Fourth, a California federal court held that state law bars insurers from depreciating sales tax when calculating actual cash value for wildfire fire insurance claims, as sales tax is not a physically depreciating property component. In-house counsel should update class action defense strategies, review policy appraisal clause enforceability, and adjust California wildfire claims valuation practices to align with the new ruling.