diminished value

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PostPosted: Mon May 25, 2009 12:08 am   Post subject: diminished value  

I reported a hit-and-run claim to State Farm a few days ago. There's maybe $3, 500 damage to the bumper and rear quarter panel of my 2008 Frontier. After I mentioned to a claims rep that I thought this should be handled under the umpd coverage, she vounteered that I could call back when repairs were complete to discuss "diminished value." Truth to tell, this would never have entered my head if she hadn't brought it up. I was under the impression they were resisting such claims. Wonder what I can expect? (This is in Texas.)


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PostPosted: Mon May 25, 2009 1:59 am   Post subject:   

I know that I have received a diminished value settlement from State Farm Auto Insurance in the past, but I was not the insured. It was their insured's fault and they almost totalled my car. I received a couple thousand dollars, and truth be told...I was like you. It never crossed my mind until someone at the body shop made a comment about how unfortunate it was that I had a nice vehicle and now would have a harder time selling it!

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PostPosted: Mon May 25, 2009 11:57 am   Post subject:   

Quote:
she vounteered that I could call back when repairs were complete to discuss "diminished value.
Texas must be one of the few states that either are allowing first party DV claims or since it's being paid under UMPD, although technically still first party (your policy) since it's caused by another their policy language must be different...well good for you! Wink



It all depends on the yr/make/model, type of damage etc...Mike, is a regular poster with a lot of knowledge about DV I'll send him a note to see if he will jump in this thread...hold tight, in the meanwhile, post yr/make/model/mileage, and 'type' of damage.


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PostPosted: Mon May 25, 2009 1:24 pm   Post subject:   

Thanks. It's a 2008 Nissan Frontier with about 35,000 miles on it, bought new about 14 months ago. Seems like the "drive off" price was about $24,000. There's a dent maybe 10 inches in diameter in the far left corner of the bumper. The quarter panel was slightly buckled in and, further toward the cab, slightly bowed out. There's a very small dent in the cab, where the uppermost part of the bed was shoved into it. I'm concerned about what kind of bumper they're going to put on it. Seems to me you would have to have an engineering background to fully appreciate the differences between oem and aftermarket bumpers. As for "dv," maybe I'll ask the adjuster how much the fact of this accident would reduce her assessment of acv, were the truck to be stolen, heh.



I'm a former adjuster, but I don't know beans about physical damage.


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PostPosted: Mon May 25, 2009 6:13 pm   Post subject:   

Quote:
I'm concerned about what kind of bumper they're going to put on it
Depends on the state, as well as the individual ins. company's guide lines...likely will either be used or a/m...personally if a/m and is capa certified, and the shop and/or the carrier will back the work, I (personally) would'nt be concerned. Are you having it repaired at one of State Farm's preferred, (service first) shops?...I'm finding tons of new (oem) 'take offs" while doing parts searches lately so that or a used bumper are possible as well..
Quote:
As for "dv," maybe I'll ask the adjuster how much the fact of this accident would reduce her assessment of acv, were the truck to be stolen, heh.
Laughing that won't help, because she'll tell you if the repairs were done correctly there will be none...



There are differing thoughts on DV, personally for the most part I think their bunk, UNTIL the sale or trade is has been done, to 'prove' the loss...but although that's my personal opinion they do (DV claims) exsist..so I've sent a pm to a semi regular poster is has a lot of knowledge about this...he's pretty good about popping in on these types of threads especially if asked...so hang on a couple of days and see if Mike doesn't give you some information...

Quote:
I'm a former adjuster, but I don't know beans about physical damage
Well, this has been my 'speciality' for the past 12 years or so...I'm sure we can figure this out...doesn't sound like too terribly much damage...


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PostPosted: Mon May 25, 2009 8:15 pm   Post subject:   

What has aroused my curiosity is that they brought up "dv" in the first place. Having sifted through some of the legal argumentation, I'm left with the impression that the policy language relied on by insurers in first-party cases may be inapplicable to third-party claims. This seems acutely problematic when aftermarket parts are placed on the vehicle of a third-party claimant who is insisting on his common law right to be "made whole." On the other hand, it's not immediately apparent how third-party claims might be cobbled into monster class action lawsuits. Except, maybe, umpd claims. I suspect that may be the only area where State Farm is being so "proactive."


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PostPosted: Mon May 25, 2009 8:57 pm   Post subject:   

Here's the skinny of DV in Texas first party with uninsured and underinsured property damage coverage.



Quote:
COMMISSIONER´s BULLETIN NO. B-0027-00



---------------------------------------------------------------------- ----------



April 6, 2000



TO: ALL COMPANIES, CORPORATIONS, EXCHANGES, MUTUALS, RECIPROCALS, ASSOCIATIONS, LLOYDS, OR OTHER INSURERS WRITING PROPERTY AND CASUALTY INSURANCE IN THE STATE OF TEXAS AND TO OTHER AGENTS AND REPRESENTATIVES AND THE PUBLIC GENERALLY



RE: PAYMENT OF DIMINISHED VALUE TO POLICYHOLDERS



The purpose of this bulletin is to clarify the position of the Texas Department of Insurance (Department) to admitted insurers writing private passenger automobile insurance and to the public on the issue concerning first party claims for diminished value.



When an automobile is completely repaired to its pre-damage condition, there is sometimes a question of whether an insurer is obligated to pay the first party claimant for the diminished value of the automobile. A policyholder may claim that the automobile´s market value after complete repair is less than its market value before the damage. The policyholder then claims that the insurer is obligated to pay for the difference in market value, which is referred to as diminished value.



The standard Texas policy for private passenger automobiles, adopted by the Department under Texas Insurance Code Article 5.06, provides that an automobile insurer´s contractual liability for first party claims for a loss to a covered vehicle under Collision or Other Than Collision (Comprehensive) Coverage is the lesser of the following three options, less any applicable deductible:



Actual cash value of the stolen or damaged property;

Amount necessary to repair or replace the property with other of like kind and quality; or

Amount stated in the declarations of the policy.

Option (1), to pay the actual cash value, applies when the insurer elects to declare the covered automobile a total loss. Option (2), to repair or replace, obligates the insurer to pay the total cost necessary to repair or replace property with parts of like kind and quality, minus any applicable deductible.



The position of the Department is that an insurer is not obligated to pay a first party claimant for diminished value when an automobile is completely repaired to its pre-damage condition. The language of the insurance policy does not require payment for, or refer to, diminished value.



This bulletin is not intended to preclude the use of loss of market value as a measure that an insurer and first party claimant may use to settle other disputes. For example, if an automobile was repaired properly but the vehicle still does not function as it did before the accident, the insurer and policyholder may agree to use loss of the automobile´s market value as a measure of damages to settle the dispute.

An insurer also may be obligated to pay a third party claimant for any loss of market value of the claimant´s automobile, regardless of the completeness of the repair, in a liability claim that the third party claimant may have against a policyholder. Further, an insurer may be obligated to pay a first party claimant under the uninsured/underinsured motorist coverage provisions of the policy, for any loss of market value of the first party claimant´s automobile, regardless of the completeness of the repair.



Questions regarding this bulletin should be directed to the undersigned at 512/322-3430.



Sincerely,



David Durden

Associate Commissioner

Property & Casualty Program, MC104-5A



DD:dh







Found this post on another discussion forum about 1st party DV. While the price they paid for the assessment seemed a little higher than I have seen, it supports the fact that proper documentation of the loss of value will aid you in recovery with or without an attorney. My opinion is that the documentation is 75 percent of the work and filing the suit to make an obstinate insurer respond by an attorney is 10 to 25 percent of the balance. However, with a Department of Insurance with consumer interests in mind such as Texas, you have some sound support without the aid of an attorney it seems.



Quote:
I was able to file a diminished value claim here in Texas only after I paid a certified appraiser $500 to render an opinion on the actual loss in value. The event that necessitated the claim was a hit and run at 60mph on a freeway here in Houston. The police were never able to find the *&%%$ that hit my wife. The Uninsured/Underinsured part of the policy covered all damages to the car ($14,450+...nope it wasnt a Max) and medical claims, but I had to remind the insurance company that indeed they were going to payout on the diminished value. One hitch to all this was that any and all claims could only total the maximum amount of coverage for property damage...in this case it was 25k, so I was able to recoup about another $8500 in diminished value. I now carry no less than 100k for property damage. What is really sickening about the whole event is that even the BMW dealership that preformed ALL the repairs would NOT take the car as a trade in!!! Now THATS diminished value!!!


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PostPosted: Tue May 26, 2009 12:11 am   Post subject:   

Thanks. There's an interesting discusion of Texas authority on this business, including the reg you reference, in a note by Kevin McGillicuddy of Parker & Associates. (I've met Kevin a time or two, and I think he's a lawyer.) (Google "Parker diminished value".)



I I can't put my hands on my policy, but I seem to recall that the collision and comp coverages were recently endorsed to permit aftermarket parts in repairs.



There's a note on fatwallet.com (Check Arrived!) where a Texas lawyer is complaining, in a comment dated 5-9-09, that State Farm, whose insured rear ended him, "flatly denied" his "dv" claim. I surmise from this that State Farm has not swung the gate open to all third-party claims.


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PostPosted: Tue May 26, 2009 12:17 am   Post subject:   

Slipped my mind to mention that CAPA, according to its website, doesn't "certify" metal bumpers.


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PostPosted: Tue May 26, 2009 9:18 am   Post subject:   

Hi flint,



Quote:
This seems acutely problematic when aftermarket parts are placed on the vehicle of a third-party claimant who is insisting on his common law right to be "made whole."




Flint, there are quite a few repair shops which do pretty good repairs and hence need not be concerned about DV resulting out of substandard repairs. These shops would have teams that are either certified under the National Institute of automobile service excellence or have been trained under I-CAR. The disclosure laws are actually meant to let you know more about the parts that these shops use for repairs. But yeah, if the shops use inferior aftermarket parts they'd need to face the DV claims.



Quote:
On the other hand, it's not immediately apparent how third-party claims might be cobbled into monster class action lawsuits.




See, DV claims are permitted and acknowledged across all states. Are you asking about "who" the lawsuit would actually target in order to obtain the payment?



Quote:
I I can't put my hands on my policy, but I seem to recall that the collision and comp coverages were recently endorsed to permit aftermarket parts in repairs.


Did you come across any journals?



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PostPosted: Tue May 26, 2009 10:52 am   Post subject:   

Quote:
I can't put my hands on my policy, but I seem to recall that the collision and comp coverages were recently endorsed to permit aftermarket parts in repairs.
Flint I'd be surprised if it wasn't in your policy and if it were 'recent...most policys will have this flying high and proud.. Rolling Eyes however I'm not 100% of where Texas stands on a/m parts. I'll check and post results...but would bet they allow them...only a couple of states don't unless written permission given by owner (which only happens to save a total) I know Minn is one. I'll let you know...what I find...re: bumper...no way for me to know if you have/had a metal or urethan cover over metal bar Wink ....check the capa web site for that...


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PostPosted: Tue May 26, 2009 11:34 am   Post subject:   

Quote:
but would bet they allow them
Looks like I might've lost that bet! Laughing



Very interesting...on the Dept of ins site for Texas I find this...



Quote:
27. CHOICE OF REPAIR SHOP AND REPLACEMENT PARTS. You have the right to choose the repair shop and replacement parts for your vehicle. An insurance company may not specify the brand, type, kind, age, vendor, supplier, or condition of parts or products used to repair your automobile. The insurance company must provide you notice of the above requirements as follows:



· claims submitted by telephone – written notice within 3 business days or immediate verbal notice, followed by written notice within 15 days;



· claims submitted in person – immediate written notice at the time you present your vehicle to an insurer or an insurance adjuster or other person in connection with a claim for damage repair;



· claims submitted in writing – written notice must be provided within 3 business days of the insurance company’s receipt of the notice.




From what I've been able to find, it appears that Texas too, requires prior consent...(June 2008)...so you might want to ask about that when discussing repairs....











Smile Thanks Mike for the assistance Smile


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PostPosted: Tue May 26, 2009 1:43 pm   Post subject:   

Thanks to all. My bumper is chromed metal, with a plastic cover only on the top. I guess I could live with a salvaged oem replacement. What would I look for? Wouldn't want one that had been marinated in salt water.



No "aftermarket parts" language in my current policy. Guess my memory cells have too many miles on them.



Reg 27 is most interesting. But, lori, I'm not so sure it's easy to finesse the argument that the recording of collisions on Carfax reports results in an immediate loss of market value.



Steve, I think the Texas Supreme Court has rejected "dv" in the first-party context (see Kevin's note.) The policy language applicable only to first-party claims is crucial. My "class action" comment goes to the fact that it's not so easy for third-party claimants to show a common violation of a duty owed directly to them under the policy.


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PostPosted: Tue May 26, 2009 4:13 pm   Post subject:   

With regard to first party DV under umpd, here is one suggested reason that they are more willing to settle DV claims



Quote:
In a third party setting, the insurer can delay, deny, stall … the whole routine, with little or no repercussions. In a first party claim, with the contract in force, the insurer is forced to walk a tight line, or face breach of contract and potential bad faith charges (and lawsuits).





I would assume you may also have the appraisal clause in umpd disputes for resolution of them. Makes coming to the table to bargain in good faith the prudent thing to do.


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PostPosted: Tue May 26, 2009 5:26 pm   Post subject:   

Well, they must be "running scared" of something. I'm sure it goes against the grain to feel obliged to initiate discussion of "dv."



Just got back from the shop. They're using all oem parts, even the quarter panel. I guess metal straightening is out of style. So, no Hurricane Ike parts to worry about.



I'm rather disinclined to press a "dv" claim at this point. I'll probably just invite them to make an offer. (Gee, Mr. Fast Track, what would you request if you were me?) I'll see if I can find out what their policy is.


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