diminished value

by Guest » Mon May 25, 2009 12:08 am

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.)

Total Comments: 67

Posted: Thu Jun 04, 2009 03:11 pm Post Subject:

The ones that are losing their butts are the not in the auto insurance sector, those were companies that insured loan risks. The only other companies who's stocks are poor performing these days are the same ones not living up to the promises they failed to deliver or customer satisfaction that they failed to deliver.

Very few carries only write auto policies... most write at least auto and home. It's all premiums from P&C policies. Companies are not doing well because of property losses (storms) but also because the market is so bad. Many companies spend $1 for every dollar they take in. They make their money by investing that money in the meantime. We all know how the market is right now so many carriers are losing money. It has nothing to do with service.

As far as our man Flint, I am not pushing for him to collect DV

I'll let your own posts speak for themselves:

I do not follow your logic. You paid for coverage gambling that you would never have to use it. DV is factored into the actuaries as a loss required to be placed in reserves and paid when a claim is presented and you simply chose to allow the insurer to keep funds that are owed to you under the contract of insurance in your state only because they specified oem parts in the repair?

They chose to pay out of pocket for their loss because of a fear factor instilled by the insurance industry designed to control costs and ensure profits at the expense of the very people they have promised to protect.

This was in response to Flint saying that he did not want to pursue a DV claim.

Our man Flint made a decision that he was satisfied with and was appeased by the use of oem parts and replace in lieu of repair processes. This is the only reason I even began assisting people with DV claims. If some insurers insisted on repairing things that should be replaced and using inferior parts, then I believed they had a significant argument that their vehicle would be devalued because of repair decisions out of the vehicle owner's control and if asked, I offered assistance.

I'm not sure I follow that.... but here is something that I've never understood....

It is the concept that vehicles can't be repaired as good as before a loss(whether because of innept repairers or insurers failing to pay for pre-loss or a first rate repair owed under contract) that have fueled DV claims, not people marketing the concept

I'm glad you posted this as it makes a response much easier.... it's simply incorrect. You say that carriers should only use new OEM parts in place of old parts and that they should not limit, in any way, what a shop does or charges for the repairs. In this case new OEM parts were used to replace old parts, there is no indication that any limitations were put on the repairs, _and_ the owner appears to be please with the results. Yet you still say that the vehicle is not as good as before. I'll ask... why not? This all leads to what I've said many times before.... DV is a _percieved_ drop in value. That is, the vehicle really _is_ in the same condition (really better) then before the accident and people just thing they can buy a damaged/repaired vehicle for less. Now, where do they get that impression from?

I merely give them resources for them to come to their own conclusions and they fight their own battles as I am not a party to their contract of insurance.

Oh, yeah. Now I remember.

The choice to be appeased rather than compensated for additional losses that could be owed is a personal decision and not a moral decision in my opinion

I guess if you throw morals out of the equation it's much easier to agree with your point.

Posted: Thu Jun 04, 2009 03:47 pm Post Subject:

DV is a _percieved_ drop in value. That is, the vehicle really _is_ in the same condition (really better) then before the accident and people just thing they can buy a damaged/repaired vehicle for less. Now, where do they get that impression from?

Two thoughts, Market and availability drive pricing. What a willing buyer and what a willing seller agree to in an open market sets the price. So the value of anything is determined by what the market or people determine it's worth or value to be.

So according to your logic, and your belief that a repaired vehicle is just as good as one that has never been in an accident and given the opportunity to select from two identical vehicles (one with an accident history of 4000 dollars, and one that is pristene and no stigma of accident history) you believe the average buyer would pay an identical price for the vehicle with the accident history. Not even likely.

Our man Flint was pushing for justification of DV owed to him as I interpreted his posts and was only appeased when instead of a/m parts and puttying a panel they were replaced with new oem. Good for him, he got what he was owed and deserved. If all claims were handled like that, the DV perception would diminish itself. The public perception that some insurers pay only for cheap repairs contribute to drive the values of repaired cars down.

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.

I was inquired of my opinion of DV in this situation and I gave it, I didn't jump the post to urge anyone to demand DV.

The similarities in the post about the older couple that feared uninsurability and Our man Flint, was that I simply was making a correlation of you pay for coverage and you are entitled to it and you should not feel guilty for asking for what is owed you under the terms and conditions of any policy. Leaving money owed to you on the table for the insurer wasn't, in my opinion, a matter of ethics as much as it was just a personal choice, just as the older couple made in not filing a claim.

Posted: Fri Jun 05, 2009 10:57 am Post Subject:

I told someone who contacted me just yesterday on a three thousand dollar claim with all bolt on parts that the claim would be insignificant enough to hire an appraiser or an attorney and that they should use small claims court or statements from dealer trade ins to make their case if they chose to pursue it.

Just as a matter of curiosity only...what is the yr/made of this vehicle and what would you think this owner is owed on a DV claim, with all bolt on parts, and I am assuming a fair - good repair job, with new oems parts?

So according to your logic, and your belief that a repaired vehicle is just as good as one that has never been in an accident and given the opportunity to select from two identical vehicles (one with an accident history of 4000 dollars, and one that is pristene and no stigma of accident history) you believe the average buyer would pay an identical price for the vehicle with the accident history. Not even likely.

Ok, if we go on this assumption...then when I'm figuring an ACV on a total loss then it is only fair that I not only deduct from that ACV any UNREPAIRED prior damage, but I must also deduct from it's value, this 'diminishment' it suffered from any and all prior repairs that pop up when I run and ISO on that totaled vehicle...so now we have a vehicle that has an ACV at 5k, I pull ISO, and this vehicle has had four prior losses in it's life, all repaired, and repairs done well..well poor sap, I'll have to find out how much was paid for each repair then deduct the appropriate DV amount for each loss/repair (whether they got one or not and if they did get a dv payment/claim then I would deduct that amount exactly)..from the value of their vehicle! So now after I remove the loss of value (dv) this guys car suffered because he repaired it, his vehicles ACV is now about a buck fifty...

You can't have it both ways...if properly repairing a vehicle STILL causes (in your opinion mike) a loss of value that the owner is to be paid..then when and if that vehicle totals, every repair made to it caused a dimishment in it's value. I as the adjuster can and should take those amounts away from his vehicles ACV...right? Has to be!! you can't have it both ways...man talk about a can of worms. :roll:

In fact I'd say if DV grows and is paid on nearly every claim, there is no choice, nor would it be right NOT to remove that same amount from the ACV when that vehicle totals...

Posted: Fri Jun 05, 2009 12:30 pm Post Subject:

I'll tell you what is unlikely... that this situation would every happen. I've bought a few vehicles in my day and been to a few lots... I've _never_ seen two, exact identical vehicles, one damaged and one not, for sale. People _love_ to use this example to prove their point... only problem is... it never happens. I've also bought vehicles with prior repaired damaged. The prior damage has never been discussed but I've always negotiated a price that was acceptable to both the buyer and the seller. Was this price lower then the exact same vehicle without prior repaired damage? Well, we will never know... as, mentioned above, that situation never happens.

Have people attempted to negotiate a lower price because of prior repaired damage? I'm sure it's happened. Was the selling price lower solely because of this prior repaired damage? You tell me. Please provide examples if you have them. What I can show to you is that no vehicle valuation guide that I know of gives the option of displaying a lower price for prior repaired damaged vehicles. Why is this, if it happens all of the time?

I was inquired of my opinion of DV in this situation and I gave it, I didn't jump the post to urge anyone to demand DV.

Yes Mike, you did. I pointed that out in my prior post. Flint mentioned he was not going to purse a DV claim and why. You then jumped and told him you did not understand why he was not going to and gave some examples of why he should. So you _clearly_ were not responding to a question of "if" a DV claim should be pursued. But to each their own. Your certainly free to post as you wish. I'd have it no other way.

Posted: Fri Jun 05, 2009 04:07 pm Post Subject:

I know of insurers that do this all the time. Progressive for one, has in the past deducted for every scratch and ding on the car to diminish the acv. I just completed a DV assessment on a 2003 M3 with 11,000 in damages. One of the things that was damaged and paid for in a previous 1150 wreck was replacement of the bumper fascia and fog lite. I deducted 500 dollars from the current acv for this accident history.

You could have 2500 dollars in damages on a new chevy truck with all headlamps, grilles, bumpers replaced (bolted on oem parts) and there would be negligible DV albeit some. The replacement of welded on parts distortion of unibody parts, non oem parts (in consumers minds not only mine) used sheetmetal parts from an older vehicle, used suspension and engine cradles, remanufactured wheels, all greatly increase the diminishment of value in surveys conducted of the buying public.

http://www.ican2000.com/dvsurvey/results.asp
http://www.ican2000.com/dvsurvey.html

The diminishment decreases as car values in general decrease porportionally. Ten thousand in damages and a ten thousand dollar loss of value on a car repaired in 2003 would decrease any residual Dv anywhere from 75 percent to 100 percent depending on the quality of the repair, the maintenance of the vehicle, and any failure of non oem parts to hold up under time such as premature rust and failure.

Posted: Fri Jun 05, 2009 04:48 pm Post Subject:

I know of insurers that do this all the time.

What Lori said was that _in addition_ to deducting for unimpaired prior damage carriers should then deducted for _repaired_ prior damage. Her point is that they don't. You say that they do... but then you go on to mention deducting for _existing_ damages.

No carrier that I know of (and I know a _lot_) takes DV off of a vehicle they are handling as a total loss.

Lori raises a god point... I guess according to you, every carrier should. Interesting. :lol:

Posted: Fri Jun 05, 2009 05:25 pm Post Subject:

I only deal with consumers and I am not involved in assisting in total losses since I am not a DRP and I am not an attorney or licensed adjuster and can not negotiate a loss on behalf of a vehicle owner. I am not privy to their paper work. I only know that I have had vehicle owners inform me that their adjuster is giving them less (as much as 50 percent ) because of prior losses that have been repaired. You may not work for one of these types of insurer, but there are some that notoriously use any means available to lower the acv for the purpose of settling total losses. I simply tell the vehicle owner to ask for, in writing, the methodology in how they arrived at the loss and how they factored it into the settlement. I am not aware of any national database or resource reference that evaluates and allows for DV, it appears to be done randomly by rogue adjusters perhaps.

No carrier that I know of (and I know a _lot_) takes DV off of a vehicle they are handling as a total loss.

Lori raises a god point... I guess according to you, every carrier should. Interesting.

I have only seen this attempted on third party losses. If insurers tried to use this on first party losses, they would also have to admit that first party DV exists as well on colllision losses where vehicles are repaired. We already know insurers believe in mythical preloss conditon and that there is no such thing as DV as you say, it's a perception. Likewise insurers can't have it both ways either. It's a double edge sword. If you claim it exists on all losses when you total a car, you'd have to admit it exists when they are repaired.

Posted: Fri Jun 05, 2009 05:33 pm Post Subject:

Of course not... you'd not want to support your position equally for everyone... only when it benefits you. :lol:

I am not privy to their paper work. I only know that I have had vehicle owners inform me that their adjuster is giving them less (as much as 50 percent ) because of prior losses that have been repaired

Does not happen for prior repairs. Sounds like a case of the vehicle having a salvage title. Now insurance companies _do_ lower the value of a vehicle for this reason.

Likewise insurers can't have it both ways either

That's part of the point... carriers are consistent. Since we don't normally acknowledge DV claims, we don't take then on total losses. Perhaps in those state, like GA, we should!

(But carriers still don't. Believe it or not, carriers many times pay more then what they need to in order to settle a claim. They understand that they still collect a premium to addresses losses).

Posted: Fri Jun 05, 2009 06:34 pm Post Subject:

Quote:
I only deal with consumers and I am not involved in assisting in total losses since I am not a DRP and I am not an attorney or licensed adjuster and can not negotiate a loss on behalf of a vehicle owner
Of course not... you'd not want to support your position equally for everyone... only when it benefits you.

I am not an advocate as a repairer for the insurer (first or third party) I am soley an advocate for the vehicle owner and they and I have the right to contract with each other without the interference of any insurer.

I do not negotiate period. It's not my contract and it's not damages owed me based on liability owed under a third party contract. I only repair cars and my contract is with the vehicle owner. While I may reference the insurer estimate or my estimate or DV assessment may be used in a settlement, I DO NOT NEGOTIATE. It simply isn't legal.

In the past when I attempted to negotiate or justify required procedures or costs based on court cases or policy language I was promptly sent a cease and desist letter from an insured's legal department. Insurers want repairers to negotiate only to the point that they agree to what the insurer is willing to pay, nothing more nothing less. For me as a repairer or appraiser to negotiate on behalf of my contracted customer is the unauthorized practice of law. and yes I know it's done every day and the DOI or Attorney Generals look the other way until the repairer attempts to negotiate on behalf of the consumer where an agreement can not be made.

Vehicle owners have every legal right and recourse to sue the very shops that conducted their repairs for failure to obtain a settlement they feel they were owed and the shop could successfully be prosecuted if they acted in the capacity to negotiate a first party claim or third party loss.

The only time I'll discuss my DV appraisal is in a deposition or courtroom with an insurer on behalf of the vehicle owner's counsel. Likewise, just as I received a call from an insurer ten minutes ago attempting to get me to agree to repair based on the insurer estimate of a third party loss and different of my own so that they could tell the vehicle owner I agreed to the amount less any supplement, they could then tell the vehicle owner this is all we owe. Your shop (not even under contract) agreed to our figures and not his.

Posted: Sun Jun 07, 2009 02:30 pm Post Subject:

know of insurers that do this all the time. Progressive for one, has in the past deducted for every scratch and ding on the car to diminish the acv

Dents, dings and scratches that are incidental to ownership are not deducted, UNLESS let's say it's to a high high end vehicle and they would detract from the value...door dents on an 02 mini van, wouldn't necessary reduce it's value...unrepaired collision or comp damage should be deducted (or a percentage of that damge ) from the value...I fully agree that two vehicles of same make/model/year next to each other, the one without a fist sized dent in the 1/4 and cracked h/lamp and w/s, is worth less than the one with out...duh...Now this related to UNREPAIRED PRIOR damage, NOT prior repairs, however I have deducted for prior poor repairs...

would decrease any residual Dv anywhere from 75 percent to 100 percent depending on the quality of the repair, the maintenance of the vehicle, and any failure of non oem parts to hold up under time such as premature rust and failure.

Now wait sec here...you are saying (are you not?), that if a vehicle is repaired, and not sold or attempted to sell for lets say 5 years post the inital repair then the DV disappears? That's always been my point...there is NOT dv until that vehicle is sold...so if it's not sold for five years the DV disappears, and the owner was paid for what? Doesn't he owe that money back? After all he SUFFERED NO DV AT ALL!

because of prior losses that have been repaired.

Mike this just doesn't happen UNLESS the prior repair was so bad it would reduce the value...now if they say it was reduced due to prior claims or losses that were NOT repaired, then of course...

I simply tell the vehicle owner to ask for, in writing, the methodology in how they arrived at the loss and how they factored it into the settlement.

And they absolutely should....for example, I just wrote an estimae on an 02 lexus, every bell and whistle available on this vehicle, acv was round 12k..i stopped writting the repair estimate at about 11k...HOWEVER this vehicle had about 2k in unrelated, UNREPAIRED prior damage, (about six giant butt dents on the roof), front cover hit in two places, foot long scratch/dent in fender, cracked h/lmp, and more...Now let me say that I ALWAYS write prior damage estimates, 'light' example I put 6hrs repair on that roof, there isn't even a blind shop owner that would touch that roof for less than 12 hours, and most would insist on replacement...most adjusters that I know do the same, (write the prior damage sheets light)...in this case 80% of the cost of repair of the prior damage is deducted from the vehicles ACV, and why shouldn't it be?
NOTHING is EVER deducted for a prior loss, that was repaired, again, unless it was a crappy job, I have written previously repaired vehicles, that look like they used a brush to paint them, runs literally hanging off the panel, that type of thing, I don't ding them for minor, things like small amount of dirt, sand scratches you can see, only 'if' you know what to look for...only things that the general public without collision repair knowledge would see and notice, these reduce the value of the vehicle...clearly we're all in agreement on that...but nnever ever ever have I nor have I seen any deduction for a cleanly prior repaired vehicle...Mike I'd have to see or know what company that is because I will make a call to find out about that...could be too that your customer either didn't understand what was being said to them, and repeating it incorrectly to you, (not like that doesn't happen every day :roll: )

Agreed...but in the states that DO allow first party DV...bingo bango, that should come off the vehicles ACV every single dime of it......same with third party...

Likewise, just as I received a call from an insurer ten minutes ago attempting to get me to agree to repair based on the insurer estimate of a third party loss and different of my own so that they could tell the vehicle owner I agreed to the amount less any supplement, they could then tell the vehicle owner this is all we owe. Your shop (not even under contract) agreed to our figures and not his.

If you were in agreement, subject to any supplement...what's the issue? You are only agreeing, (if you were on the technical aspect I'm unclear from your post)...that yes, I'm looking at your estimate, and it appears the only differences are, 'blah blah blah'....straighten out that part, get a copy of the revised, agreed estimate, and get down the road...what's the issue dude..??

And please respond, when you get time, to my questions...

Total Comments: 67

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