by Guest » Sat Feb 18, 2006 10:21 am
My cousin Bob and another guy went for a long drive last Saturday evening and got struck by a rash driver from a distance. The bully escaped narrowly but was trapped later in the morning .The repair works for Bob would be somewhat around $4000. Bob's insurer had agreed to support him with aftermarket body parts for his vehicle, to which Bob's reaction was simple and stern. He did not want his insurer to provide him with aftermarket parts. He maintained that it was his insurer's job to collect the new parts from the tormentor. He had a hard time convincing the insurance representative till he revealed his other identity as an attorney.
Of late his insurance company has offered him new market parts, and also expressed their willingness to resolve matters soon. Could we ever look forward to a hassle-free world ?
Regards,
Blackberry
Of late his insurance company has offered him new market parts, and also expressed their willingness to resolve matters soon. Could we ever look forward to a hassle-free world ?
Regards,
Blackberry
Posted: Thu May 15, 2008 01:56 pm Post Subject:
I've paste the Texas Betterment information below:
FK,
==============
==============
==============
Case cite: You can't take "betterment"
Great Texas County Mutual Insurance Co. v. Lewis, 979 S.W.2d 72 (Tex.App. Dist.3 11/05/1998)
[1] Texas Court of Appeals
[2] NO. 03-98-00118-CV
[3] 979 S.W.2d 72, 1998.TX.42087
[4] November 05, 1998
[5] GREAT TEXAS COUNTY MUTUAL INSURANCE CO., APPELLANT
v.
EMMETT C. LEWIS, APPELLEE
[6] Before Justices Powers, Jones and Kidd
[7] The opinion of the court was delivered by: John Powers, Justice
[8] FROM THE DISTRICT COURT OF MILAM COUNTY, 20TH JUDICIAL DISTRICT NO. 24,602, HONORABLE CHARLES E. LANCE, JUDGE PRESIDING
[9] Great Texas County Mutual Insurance Co. ("the Company") appeals from a trial court judgment that awards Emmett Lewis, the Company's insured, a money judgment in his suit to recover on his automobile-insurance policy. We will affirm the trial court judgment. *fn1
[10] THE CONTROVERSY
[11] The facts are undisputed. While covered by a policy issued by the Company, Lewis's 1989 Dodge Caravan motor car sustained damage to the engine. The automobile had been driven 110,000 miles at the time. The Company inspected the automobile and calculated the cost of repairing the damage to be $3,608.27, which included the cost of a re-manufactured engine, replacement parts, and labor. From the $3,608.27, the Company subtracted the policy deductible of $527.00 and $2,031.72 for betterment or depreciation, leaving a net sum of $1,049.55. The Company offered Lewis that sum to discharge the Company's obligation under the property-damage section of the policy.
[12] Alleging his coverage did not authorize the $2,031.72 deduction for betterment or depreciation, Lewis sued the Company on his policy to recover the $3,608.27 estimated cost, less the policy deductible of $527.00, together with other sums not in dispute. The trial court concluded the policy did not authorize a deduction for betterment or depreciation and rendered judgment accordingly.
[13] In the Company's appeal, the sole issue is one of law: whether the language of the policy authorized the deduction of $2,031.72 claimed by the Company for betterment or depreciation.
[14] DISCUSSION AND HOLDINGS
[15] Concerning damage to a covered automobile, the policy provided as follows under the heading "Limit of Liability":
[16] "Our Limit of Liability for loss will be the lesser of the:
[17] "1. Actual cash value of the . . . damaged property; "2. Amount necessary to repair or replace the property with other of like kind and quality; or "3. Amount stated in the Declarations of this policy."
[18] In its first point of error, the Company complains "[t]he trial court erred in concluding as a matter of law that the phrase `like kind and quality' does not allow an insurer to deduct for betterment or depreciation." We disagree.
[19] "In arriving at the correct measure of damages in an action to recover under an automobile collision policy, it must be kept in mind that the action is not a suit for damages but one on the contract of insurance, and that therefore . . . the language of the contract sued upon must prevail . . . ." L.S. Tellier, Annotation, Measure of Recovery by Insured Under Automobile Collision Insurance Policy, 43 A.L.R.2d 327, 329 (1955) (emphasis added).
[20] The contract provision quoted above gave the Company an election. The Company might pay Lewis (1) the actual cash value of the damaged property or (2) the amount necessary to repair or replace the property with another of like kind and quality. After inspecting the engine, the Company elected to pay the "[a]mount necessary to repair or replace the property with other of like kind and quality." The parties agree that the engine required repairs totaling $3,608.27 and that the Dodge Caravan had been driven 110,000 miles when the engine-original to the car-was damaged.
[21] The words betterment and depreciation are not found in the policy. The Company argues, however, that they are necessarily implied because the replacement engine costing $3,608.27 is tantamount to a new engine-it will carry a warranty even though it is re-manufactured. Thus, the rebuilt engine will have an expected useful life much longer than Lewis's used engine that had been driven 110,000 miles when it was damaged. Calculating that the 110,000 miles were equivalent to three-quarters of the useful life of the damaged engine,*fn2 the Company argues that Lewis will receive an equivalent windfall unless the Company is allowed its claimed entitlement to a deduction for betterment or depreciation. We should say, however, that the Company's interpretation must be one sanctioned by the language of the policy. We believe that is not the case.
[22] It is generally accepted that depreciation is a factor to be considered when an insurer elects to pay the "actual cash value" of the damaged property, which the Company declined to do here. See Wendy Evans Lehmann, Annotation, Depreciation as Factor in Determining Actual Cash Value for Partial Loss Under Insurance Policy, 8 A.L.R.4th 533, 539 (1981).*fn3 By electing to pay Lewis the "amount necessary to repair or replace" the engine with another "of like kind and quality," we believe the Company elected a measure of loss that does not allow for depreciation.
[23] The words "repair" and "replace" mean restoration to a condition substantially the same as that existing before the damage was sustained. See Northwestern Nat'l Ins. Co. v. Cope, 448 S.W.2d 717, 719 (Tex. Civ. App.-Corpus Christi 1969, no writ); Appleman, Insurance Law and Practice § 4004, at 710 (6th ed. 1972). Because Lewis's automobile was a functioning or operating automobile before the damage, the Company was required to pay an amount necessary for a repaired or replacement automobile of that character. The qualifying words "of like kind and quality" permit but do not require an engine of similar age, use, condition, or present cash value; they refer simply to repairing the damaged automobile so that it is suitable or fit for its intended purpose. See Rhodes, Couch on Insurance § 54:148, at 536-37 (2d. rev. ed. 1983); Appleman, supra, § 4005 at 724 ("If the insurer elects to repair, such repairs must make the car as serviceable as it was before the loss.").
[24] When an insurer elects to repair, the insured is entitled to the amount required to repair the automobile. Agricultural Workers Mut. Auto Ins. Co. v. Dawson, 424 S.W.2d 643, 645 (Tex. Civ. App.-Tyler 1968, no writ). The insurer's obligation in such a case is not discharged until the insurer pays the cost of repair less any deductible specified in the policy. Appleman, supra, § 4005 at 726. The only evidence in the record regarding the cost of repairing Lewis's automobile is the agreed sum of $3,608.27; the specified deductible is $527.00.*fn4
[25] If the Company may discharge its obligation by paying Lewis $1,049.55, he will not have, under the evidence, a sum sufficient to restore his engine and automobile to a functioning or operating state. He will be deprived of the protection ostensibly purchased in his policy-protection against the risk of having to pay out of his own pocket to restore his motor car and its component parts to a functioning or operating state in the event they were damaged.*fn5 See Farmers Mut. Protective Ass'n of Tex. v. Cmerek, 404 S.W.2d 599, 600-01 (Tex. Civ. App. -Austin 1966, no writ) ("The insurer is not entitled to a deduction for depreciation in the event of a partial loss, as distinguished from a total loss."); see also Implement Dealers Mut. Ins. Co. v. Cox, 376 S.W.2d 384, 387 (Tex. Civ. App.-Houston [1st] 1964, no writ) (when partially damaged property covered by an insurance contract can be repaired with new material of like kind and quality, no deduction for depreciation is required); Gulf Ins. Co. v. Carroll, 330 S.W.2d 227, 233 (Tex. Civ. App.-Waco 1959, no writ).
[26] The decisions cited by the Company for the opposite proposition are not persuasive. In Whitson v. Western Agric. Ins. Co., 1995 Ariz. App. LEXIS 66, 186 Ariz. Adv. Rep. 10 (Ariz. App. March 14, 1995, no pet.), the court interpreted "like kind or quality" to mean that damaged parts should be replaced with parts of similar age, condition, or cash value. On this basis, the court suggested that the insured would not be entitled to new replacement parts without a deduction for the vehicle's depreciation. Because "like kind or quality" refers to parts fit for their intended purpose rather than parts similar in age, condition, or value to the parts damaged, the Company's reliance on this decision is misplaced. See Maryland Motor Car Ins. Co. v. Smith, 254 S.W. 526, 528 (Tex. Civ. App.-Texarkana 1923, no writ).
[27] The Company also relies upon General Accident Fire & Life Assurance Corp. v. Judd, 400 S.W.2d 685 (Ky. 1966). This decision is inapplicable because no evidence was introduced that the insured's car could be put in substantially as good physical condition as it was before the accident.
[28] Finally, Tomes v. Nationwide Insurance Co., 825 S.W.2d 284 (Ky. Ct. App. 1991) involved a dispute over whether an insurance company could employ used parts in repairing an eight-year-old car. The court held it was "not reasonable to expect the insurer to pay for new parts when less expensive materials can be obtained to restore the car to its former condition." Tomes, 825 S.W.2d at 286 (emphasis added).
[29] We do not disagree with the Tomes court's Conclusion; we fail to see, however, how it supports the Company's position. Neither the Company nor Lewis have disputed whether it was proper for the Company to base its payment to Lewis on the value of a re-manufactured or new engine rather than a used engine. Moreover, in concluding that the insurer was not obligated to pay for new parts, the court based its decision on evidence that less expensive materials sufficient to restore the car to its former condition were available. Tomes, 825 S.W.2d at 285. In the present case, no evidence was introduced to suggest that Lewis could make the necessary repairs to his automobile for $1,049.55.
[30] By reducing its payment to Lewis by "betterment" or "depreciation," the Company failed to provide Lewis with an amount of money sufficient to make his vehicle as serviceable as it was before the loss.
[31] We overrule point of error one.
[32] In its second point of error, the Company argues that the evidence was legally insufficient to support the trial court's finding that it violated article 21.21 of the Texas Insurance Code. Since the trial court did not award Lewis treble damages for the Company's violation, the finding is moot. We overrule point of error two.
[33] We affirm the trial court judgment.
[34] Affirmed
[35] Publish
Opinion Footnotes
[36] *fn1 After a trial without a jury, the court rendered judgment against the Company in the principal sum of $3,608.27, less a policy deductible of $527.00, or $3,081.27, together with $840.00 for storage costs, $2,968.00 for loss of use of the automobile, $2,700.00 in attorney's fees, and costs of court.
[37] *fn2 The Company introduced evidence that the expected useful life of a re-manufactured engine is 100,000-150,000 miles. An insurance adjuster testified that a 75% "betterment" figure was an industry average for an engine driven over 100,000 miles.
[38] *fn3 The Annotation declares that it is a matter of "true controversy" whether the "cash value" recoverable for a partial destruction of insured property may be reduced by depreciation when an insurer elects to repair or replace a damaged part. Lehmann, 8 A.L.R.4th at 539 n.28, 550.
[39] *fn4 The evidence adduced at trial focused on the cost of a re-manufactured engine and the issue of "betterment" or "depreciation." Nothing in the evidence pertains to the issue of whether Lewis could acquire and install an operating engine, whether used or of lesser quality, for $1,049.55.
[40] *fn5 See Appleman, § 3883, at 65, 66 (Supp. 1997) (criticizing two out-of-state courts for allowing deductions for depreciation under insurance policies).
===================================
Posted By: Maverick
Date: Saturday, 18 September 2004, at 5:47 a.m.
Thursday, September 16, 2004
Texas Attorney General Gets Consumer Refunds For Betterment Charges
Texas Attorney General Greg Abbott has filed court-approved settlements with two auto insurers to refund more than $3.4 million to Texas policyholders who paid more out of pocket on claims for auto repairs in certain years than their policies required.
Progressive County Mutual Insurance Co. agreed to pay $2.35 million, including interest, in refunds to about 11,000 policyholders who had repair claims from January 1996 through May 1999.
Old American County Mutual Fire Insurance Co. will pay refunds of $1.07 million to an estimated 4,500 policyholders who had repair claims from January 1996 to September 2001.
The companies, along with others in the industry, engaged in the practice known as "betterment," in which they claimed that the use of better or newer parts to repair the vehicle increased its value. Companies then charged the amount of this supposed "increased value" to the policyholders, thus reducing the amount the company paid for the repairs. Policyholders were then forced to make up the difference, in addition to their deductible, to the repair shop.
The Attorney General has successfully settled 17 betterment cases since 2000, alleging that insurance companies merely increased the value of the replaced part, and not the entire vehicle. Texas law does not permit such a charge or deduction, and auto insurance policies require that the companies fully pay for the repair, less the deductible, even if the parts used were better than the ones they replaced.
Under the terms of the agreement, the companies agreed not to engage in this practice and will refund the total amount of overcharges, plus interest, to customers who had claims involving betterment deductions.
Since 2000, the Texas Attorney General's office has obtained betterment settlements with State Farm, Nationwide, USAA, Geico, Travelers, Safeco, Sentry, Liberty Mutual, Allstate, Home State County Mutual Insurance Co., Consumers County Mutual Insurance Co., Farmers, Texas Farm Bureau, Trinity, and CNA for an estimated $16.4 million in total auto repair refunds to date.
Posted: Fri May 16, 2008 11:10 am Post Subject:
Great info Fred...so Texas allows no betterment...good to know! thanks fred!
Posted: Fri May 16, 2008 02:23 pm Post Subject:
Great info Fred...so Texas allows no betterment...good to know! thanks fred!
The case does not say that at all. It stated that the insurance policy/contract did not allow betterment to be taken. All of those polices were changed year ago to allow betterment to be taken.That is, the polices used to read something like, "we will pay to return your vehicle to the same condition is was prior to the accident". The courts ruled that this did not allow for betterment to be applied. Again, those policies (along with all other carriers policies) were changed after that.
Posted: Fri May 16, 2008 08:20 pm Post Subject:
The case does not say that at all.
What do you read this as tcope?The Attorney General has successfully settled 17 betterment cases since 2000, alleging that insurance companies merely increased the value of the replaced part, and not the entire vehicle. Texas law does not permit such a charge or deduction, and auto insurance policies require that the companies fully pay for the repair, less the deductible, even if the parts used were better than the ones they replaced.
So you are saying then that although Fred failed to provide this information.....That after that ruling they changed their policys to read that betterment IS now allowed? (MO policys are clear on this)....Is that right tcope? Is what you are saying is this is all OLD news and the carriers have since changed their policys to reflect betterment ? If so Fred...sure needs to know this too... :wink:Posted: Fri May 16, 2008 11:23 pm Post Subject:
Keep in mind that this happened 8 years ago. It's not new news.
The argument was that the policy, while it allowed for salvage parts, did not make mention betterment or depreciation by name. As such, the insurance company was certainly allowed to pay for salvage parts... it just could not take a new part and depreciate it to make the cost of what a salvage part _would_ be. To use an example in the case, the insurance company could place a LKQ engine in a vehicle but they could not take the price of a new engine and depreciate in order to _match_ what a LKQ engine _would_ cost. The policy did not specifically allow for this.
" The trial court concluded the policy did not authorize a deduction for betterment or depreciation and rendered judgment accordingly. "
"it must be kept in mind that the action is not a suit for damages but one on the contract of insurance, and that therefore . . . the language of the contract sued upon must prevail "
So is betterment legal? YUP! Is it appropriate? YUP... but it's application can be restricted by the wording of a contract. As I've mentioned, carriers have had ample time to correct the wording of their policies. But the bottom line is that the case has nothing do do with the legality of applying betterment in general.
Posted: Sun May 18, 2008 10:57 am Post Subject:
I got the policy language part and that was the problem in the inital one but was throw by the
Texas law does not permit such a charge or deduction, and auto insurance policies require that the companies fully pay for the repair, less the deductible, even if the parts used were better than the ones they replaced.
Thanks for clearling it up, clearly I am no TEXAS ins. expert...so then all of Fred's posting is moot...right?Posted: Tue May 20, 2008 03:00 am Post Subject: Just shows what a good lobbyist can do for an industry
You buy a policy of insurance that promises to put you back to where you belong, be a good neighbor, be on your side, hold you in good hands, and you are told that you must pay the deductible portion of the claim before your coverage will apply. What a comforting feeling that must be. You have a claim and you pay your deductible and then you find that your insurer believes that now that you have a new battery, or a new tire, or a new strut, that now you are in a better position and your car is more valuble than it was prior to the wreck, so you must pay the portion of the claim that made your vehicle or that part more valuable but we will not pay for any loss that lessens the value of your car because of the damage history.
It would make more sense that if your insurer had to buy a new part because they could not find a part that was equal to your damaged part that they would bear the cost of putting you back to where you belong after you paid your share of the claim. You as the policy holder did not ask to be made better, you purchased the policy in order to restore you to the pre-loss condition.
Betterment is baloney and is only legally owed because lobbyists of insurers convinced your department of insurance and regulaters that the damaged part they replaced put you in a better position than you were in prior to the loss.
Just like John Stossel would say, "give me a break".
Posted: Tue May 20, 2008 03:14 am Post Subject:
Betterment is baloney and is only legally owed because lobbyists of insurers convinced your department of insurance that the damaged part they replaced put you in a better position than you were in prior to the loss.
I don't know if you could be more wrong.Betterment is allowed because of statutory and case law... insurance companies can't buy judges and juries. It's not controlled by the DOI. It's also allowed on 1st party claims under the terms of the contract.
The only reason is was now allowed as mentioned above is that the policy was not written clear enough to allow the intended application of betterment.
We all understand that you think insurance companies should just give out blank checks... dam the contracts and laws. But you fail on every occasion to mention the simple outcome... people's insurance rates would go through the roof as the premiums will _always_ match the exposure and risk.
But to even think what you posted makes sense, let me ask... if the at fault person only owes (by law) to put the person back in the same condition they were prior to the accident and this is not possible due to issues beyond the at fault person's control, why should the _at fault_ person need to pay more then they owe to correct the situation? Why not the person _getting_ something better? Hmmmm, now there is a novel idea. Wait... that is the way it is now.
I can somehow figure these simple things out because I see the big picture, take into consideration the legal aspect of the situation and don't have a one track mind.
Posted: Tue May 20, 2008 09:48 am Post Subject:
ahhhhh tcope once again, you've hit the nail directly, squarely on the head.....
I don't know if you could be more wrong.
We all understand that you think insurance companies should just give out blank checks... dam the contracts and laws
But to even think what you posted makes sense,
see the big picture, take into consideration the legal aspect of the situation and don't have a one track mind.
I just wish that folks with this (lack of) thought process would have to pay the claim out of their own pocket, and see if they would (for example) think it is just fine and dandy to put a full set of (let's say) brand new tires on a vehicle that is driving around with all of 2/32nd's and the cords showing....betterment would some how seem to make a little more sense and have a 'fairer' ring to it then I'll bet.Posted: Tue May 20, 2008 02:04 pm Post Subject:
...would have to pay the claim out of their own pocket, and see if they would (for example) think it is just fine and dandy to put a full set of (let's say) brand new tires on a vehicle that is driving around with all of 2/32nd's and the cords showing
EXACTLY!Add your comment