Liability limit question

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PostPosted: Mon Dec 22, 2008 11:59 pm   Post subject: Liability limit question  

If there are multiple vehicles involved and one negligent party, how does one determine the limit of property liability from the negligent party's coverage and is their insurer required to inform the harmed party of the limits. What if the insurer states "our insured does not have enough coverage for your loss, we recommend you file a claim with your own company." Is the insurer obligated to pay proportionally the limits of the coverage of the two claims?



Does the first little piggy at the trough or first to file a claim, get their share regardless of other party's involved. What if there is only 10,000 min liability coverage and 25,000 in damages among the other damaged vehicle owners property? Does the quick brown fox that jumps over the lazy dog get paid if they had 10,000 in damages and the slow claimant or lazy dog with 15,000 in damages fails to act quickly to seek damages.



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PostPosted: Tue Dec 23, 2008 12:11 am   Post subject:   

In that case the insurance company still needs to protect their insured with the limits of the policy. So no money is going go out the door until all parties agree to settle for the policy limits.



So all parties need to be known of.



This is usually done by determining the amount of each and every person's loss. The adjuster then tells them the proportionate amount of the policy that they will be paid and sees if everyone agrees. If they do, releases are signed so that payments can be made.



The policy limits are pro-rated based on the person's loss. On a $10k policy, if one person had a $8000 loss and another had a $5000 loss, each person would get paid 76% of their loss amount. ($10,000 / $13,000 = 76%).



There are two reason's why it's recommended that the parties file with the own carriers if possible 1) they will get paid more this way and 2) because the adjuster for the person with low limits cannot issue any payments until they fully understand everyone's loss amounts.

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PostPosted: Tue Dec 23, 2008 12:56 am   Post subject:   

I thought though that you could not file with your own company until you used the other persons insurance company first ?

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PostPosted: Tue Dec 23, 2008 1:06 am   Post subject:   

Nope. You always have the ability to file under your own policy. That is why you are paying for collision or comprehensive coverage. You then assign your right of recovery to your carrier.

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PostPosted: Tue Dec 23, 2008 1:14 am   Post subject:   

Oh okay. I didn't relize that option was there as a first decision. I thought the other had to turn down first..thanks

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PostPosted: Tue Dec 23, 2008 2:13 pm   Post subject:   

Quote:
Is the insurer obligated to pay proportionally the limits of the coverage of the two claims?


yes, they are once ALL the damage numbers are in, and not a cent can be paid until this happens...Tcope explained it perfectly (of course)...it's the pro-rata of each parties loss..being quick doesn't work, or help, unless the adjuster is stupid, or doesn't know there are others with property damage.



Also the adjuster did the exact correct thing by saying this:
Quote:
our insured does not have enough coverage for your loss, we recommend you file a claim with your own company."




Somebody get caught with low limits in ole MO Mike?


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PostPosted: Tue Dec 23, 2008 3:45 pm   Post subject:   

No it was just a wondering question.



We do have a lot of Kansas and Oklahoma insureds driving in Missouri with very low limits of liability if they're insurerd at all. It happens occassionally that the damages exceed their limits of liability.



It peaked my curiosity because I had a Kansas new car dealer ask about DV on two new vehicles that were hit on their lot by a teen driver that veered off the highway. Damages exceeded 5000 on each; one a new Enclave and the other a loaded Pickup.



I suggested they determine the amount of Liability the driver carried before they pursue a DV claim. Even if the limits are exhausted, unless it is excluded in Kansas policies, they may be able to file with their own carrier in Kansas which is one of three states that allow first party DV.



Even if the damages exceed the limit of the negligent driver, the dealer would be entitled to claim any losses of value that are the unrecovered or unreimbursed losses to their property for the tax year including costs to determine according to the IRS. This is an option that many overlook that do not pursue the loss in value against the insured. A 5000 to 10,000 loss in value may net corporate or individual tax savings to first or third party filers who file the long form. LaughingIdea



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PostPosted: Wed Dec 24, 2008 12:59 pm   Post subject:   

Wonder what you have to have to prove your number (dv amount) to the IRS?



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PostPosted: Wed Dec 24, 2008 4:21 pm   Post subject:   

Quote:
Wonder what you have to have to prove your number (dv amount) to the IRS?




I would say simply any documentation that would withstand a court test and uses language consistent with court cases of the state. How are they going to disprove it or disallow something the courts say exist.



found this at the IRS site regarding dimunition of the value of a loss regarding timber losses. I would suspect they would use it as a basis to apply to other losses.



Quote:
B. Accepted Appraisal Techniques



Widely accepted appraisal theory suggests that market value can be estimated using one of three methods: the sales comparison approach, the cost approach, and the income capitalization approach. When properly applied all three approaches should be reconciled to one value conclusion. If inaccurate assumptions are used in any of the approaches, the range of value indicated by the three approaches can be very wide.



1. Sales Comparison Approach



The sales comparison approach is founded on the principle of substitution, which holds that a buyer would pay no more for the property than the price at which he could obtain a substitute property having similar utility. Estimates of before and after market values are based on open market prices recently paid for similar properties in the market area. Prices of the comparable sales must be adjusted to account for value differences attributable to the influences of financing, time, location, physical characteristics, and conditions of sale, size, and other factors that drive sale price. The transactions used in the analysis should be arm's length transactions.

The sales comparison approach is particularly useful for undeveloped land, in active timberland markets, and where intangible non-timber values are important to the marketplace. In the United States, it is the most commonly used approach to timberland appraisal, particularly for smaller properties. It is generally considered superior to the other approaches where abundant sales of recent origin are available, and where one or more comparable sales have marked similarity to the subject property. The sales comparison approach is generally preferred by the courts because of its empirical character.



2. Cost Approach



The cost approach consists of the summation of two components: vacant land and the depreciated replacement cost of improvements. Like the sales comparison approach, it is founded on the principle of substitution: a buyer would pay no more for the subject property than the cost to purchase a comparable parcel of land and construct improvements having similar utility. When applied to timberland, it can be useful if there are several distinct economic units that can be valued separately. The bare land component can be valued from sales of cutover land, or from land allocations in timberland sales. Timber is treated as an improvement, and is valued by comparing it with open market stumpage sales of similar timber.



The cost approach is applied by extracting the value of these separate economic units from different sales transactions, and then “assembling” the value components into an indication of total property value. First, bare land values are derived from either sales of bare land or sales of stocked timberland in which appropriate allocations have been made to the bare land component. Reproduction and premerchantable timber values are derived from sales of land and timber and pre-merchantable stocking where appropriate allocations have been made using sales of merchantable timber; or by capitalizing the start up cost at an appropriate rate for the age of the reproduction (a cost forwarding method). Merchantable timber values, i.e. stumpage values, are derived from actual timber sales or through conversion return analysis. Conversion return consists of taking delivered log prices, at the first point of delivery, and subtracting all cost associated with the harvesting and hauling of the logs. The residual value from that computation is then attributable to stumpage. Just remember that cost associated with profit and risk should be a part of the logging cost. The sum of the land, reproduction, premerchantable timber, and merchantable components should be compared to the market sales as a check for reasonableness.



3. Income Capitalization Approach



The income capitalization approach is based on the principle of anticipation, which states that value is derived from the anticipation of future benefits (net income). It is most appropriate for properties that are regularly bought and sold on the basis of their ability to generate a sustainable net income stream.



Of the three approaches to valuation, the income approach is the most complex and most difficult to apply to timber properties. This is due not only to economic fluctuations over time but also due to an ever-changing forest products industry. Many of these changes are due to technological advances and many are due to global market supply and demand. It requires many assumptions on the part of the appraiser, who must integrate these assumptions mathematically to produce a value estimate. The value estimate is derived from projecting net operating income from the property, where income is the net of revenues from owning the property less the costs of ownership.



A key aspect of the income capitalization approach is that it recognizes the time value of money. This concept underlies much of investment analysis, and in general terms takes into account the fact that a dollar received today is worth more than a dollar received in the future. Where the income approach is used it should reconcile to the market data and cost approaches. If there is a significantly different amount indicated by the income approach it is highly possible that errors were made with some of the assumptions.


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PostPosted: Thu Dec 25, 2008 11:25 am   Post subject:   

great info mike, thanks



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PostPosted: Fri Jan 30, 2009 4:47 am   Post subject: math  

computer please give me the some question of even and odd


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PostPosted: Fri Jan 30, 2009 11:15 am   Post subject:   

Quote:
computer please give me the some question of even and odd




EVEN 2468

ODD 369 AND your post


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PostPosted: Fri Jan 30, 2009 8:27 pm   Post subject:   

Quote:
EVEN 2468

ODD 369 AND your post




How can 6 be both odd and even (he asks with a puzzeled look on his face).
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PostPosted: Fri Jan 30, 2009 8:49 pm   Post subject:   

I think those are two numbers... not 2,4,6 and 8 etc.



(or was that your "odd, even question"?) Laughing

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PostPosted: Fri Jan 30, 2009 9:41 pm   Post subject:   

Thats what I get for staring blankly at my computer screen all day looking like I'm working....and I work out of my house. Shocked

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