If an insurance company has to include sales tax, title and registration fees will depend on state laws. If there are no governing laws regarding this, the insurance company's own guidelines will determine if as part of your settlement you will receive monies to cover these taxes and fees.
Some insurance companies will automatically include in their settlement amount the vehicle's actual cash value, so that you can buy a vehicle comparable to the one declared a total loss, and the amount needed to cover sales tax, title and registration fees. Other insurance companies do not include these expenses as part of the settlement costs.
Many states leave it up to the insurance company and their internal guidelines to determine if these items will be covered. Others, such as Illinois, request insurance companies to pay.
According to the Illinois Department of Insurance if you can prove that you bought or leased another vehicle within 30 days of your settlement, your insurance company must reimburse you for the applicable taxes, title and transfer fees. You are reimbursed partial or fully for these expenses depending on if the value of the car you purchased was more or less than your settlement amount.
Negotiating An Insurance Claim Settlement is an article in our learning center that is helpful when working with an insurance adjuster on your claim.