vehicle totaled - should we have...

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PostPosted: Sat Jun 07, 2008 3:10 pm   Post subject: vehicle totaled - should we have...  

These are probably such basic dumb questions, but I'm just tired of it all. 3 weeks ago our vehicle was totaled due to fault of another driver who received several tickets. Never having been through this before, we are wondering if it is just better to always go through your own insurance company and let them hassle it out. We did stop by our agent (SF) but was told that we didn't need to go through them since it was the other person's fault. Does your own company normally offer more than the at fault one? If we turn it over to ours, do we have to take their offer if it's lower than the other companies? Would ours offer us a settlement (including our deductable that we'd have to pay), then goes after the other company and how long does this all take before we'd have money to pay off our loan and buy another car? Do you have to wait until they come to a settlement between them? Would we have to turn the rental car in (which the other company is paying for) immediately if we turn it in to our company (we don't have rental on our policy). I don't know what to do but in the meantime found something else we'd like to buy but would like to wait until we get the settlement. Thanks for any advice.


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PostPosted: Sat Jun 07, 2008 3:48 pm   Post subject:   

First of all, these are all great questions...

Quote:
We did stop by our agent (SF) but was told that we didn't need to go through them since it was the other person's fault.
I'm hoping you spoke to your agent and not some lackey in the agents office. I'm also hoping that (providing you have collision coverage) your agent _also- explained that you _could_ file under your policy. Otherwise the agent was not helping you and only trying to protect their commision paid to them by SF.
Quote:
If we turn it over to ours, do we have to take their offer if it's lower than the other companies?
No, you can take whichever is higher and there is a very good possibility that one _will_ be higher then the other. This is a good way to get paid the most on a total loss claim.
Quote:
Would ours offer us a settlement (including our deductible that we'd have to pay), then goes after the other company and how long does this all take before we'd have money to pay off our loan and buy another car?
Usually your company would pay your loss less your deductible. But in some cases, if they know the other carrier is going to pay, your insurance company might waive the deducible but this is not required. In the case of a total loss you don't really "pay" a deductible. As no one is "charging" you anything. Your settlement is just "less" your deductible amount. It can take 2-3 months to collect your deductible amount from the other carrier. Your vehicle needs to be sold at auction before SF would be able to submit paperwork to the other carrier.
Quote:
Would we have to turn the rental car in (which the other company is paying for) immediately if we turn it in to our company (we don't have rental on our policy).
This is a sticky situation. The other carrier would only owe for the rental until an offer was made on your vehicle. They won't really know when this was done nor could they be sure if SF was slow in making the offer. So leaving you in the rental is not a good option for them. They'd still owe you compensation for the time you were without a vehicle but I doubt they would leave a direct bill open with the rental company. They'd probably want to stop the direct bill and then pay you afterward. Of course, this is providing they know your not going to file the claim with them. There is no reason why you could not have SF determine the value of your vehicle and only decide who you will file the claim with once you know both amounts. Of course, since SF does not know about the loss, it might take them longer then the other company to obtain it's value. If the other carrier makes an offer in the meantime, they other carrier will usually stop paying for the rental a few days after that offer is made.
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PostPosted: Sat Jun 07, 2008 4:04 pm   Post subject:   

thank you for the prompt reply. Actually the woman I normally deal with at my State Farm office wasn't in that day and the one I did talk to kind of rushed us through it. She did put notes in the computer about the accident in case of problems. The other company that is at fault has showed us what they totaled our truck at. We also turned in a sheet from my husband's company on his lost wages that day (he wasn't hurt but very shook up) and also on the repairs to repainting the Leer topper. My husband works for a car dealership so his body shop was the one that provided the topper estimates. Note that our truck was a 2001 Ford Ranger ext cab xlt in excellent condition with only 56,000 miles. The topper was also in excellent condition. Friday the adjuster called and spouted off something about the topper was not included in the estimate for the truck (we're keeping the topper which they said we could) and they needed to look for replacement values. In the meantime this has been 3 weeks since our truck was totaled. We don't want to 'stick' it to anyone but don't want to be ripped off either. This is so stressful.


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PostPosted: Sat Jun 07, 2008 8:23 pm   Post subject:   

As long as you think the amount the other carrier is going to give you seems fair, it looks like things are going well. If I understand correctly, the other insurance company is going to pay for the value to the topper and treat it as property separate from the vehicle so that you can have it repaired and put it on another vehicle.



Yes, it takes awhile to obtain everything needed to settle a total loss vehicle. Three weeks might be a little long but not unusual.



My recommendation is if you don't agree with the amount they offer on the truck, review their valuation to make sure they included the correct mileage, options, etc.

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PostPosted: Tue Jun 10, 2008 2:20 pm   Post subject:   

I have to agree with everything T has stated. In addition I would remind you that your own insurer has a contractual obligation to you. The other insurer owes you nothing until you have proven your loss and their insured negligent. They can tender you an offer for your total loss as a take it or leave it ultimatum with respect to time limits, if any, according to the states unfair claims practices acts or state statutes.



On the other hand, if you and your insurer do not agree to the amount of loss, you should look to see if your policy contains the appraisal clause. You have every right to dispute the offer by your own insurer. If you invoke your appraisal clause, you will not be disputing what they have claimed they owe you, you would only be disputing and seeking the additional amounts you feel you are owed by being represented by your hired appraiser. Both appraisers agree to select an umpire to settle the dispute, if they are unable to resolve the issue.



I would seek the undisputed portion and hire my own appraiser if your insurer does not make you an offer that you believe is fair. Many policies in many states have removed the appraisal clause from their policies simply because people were not familiar with the process which is meant to be an informal resolution. Your state statutes have remedies that explain what you can do if you and your own insurer do not agree. You should exhaust all remedies offered in the policy before you seek other means to dispute your settlement with your own insurer.



Once you have accepted the at fault insurers offer for settlement, there is little you can do if you feel the offer was unfair or insufficient. They have leverage in their position by taking away your rental after making you an offer and they may refuse to pay storage if your vehicle is accruing storage charges. Your leverage though slight, is to use your own coverage if the at fault insurer fails to settle on equitable terms.



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PostPosted: Tue Jun 10, 2008 3:08 pm   Post subject:   

In about 15 years of handling thousands and thousands of total losses and hearing of even more I've never heard of anyone invoking the apprasial clause. I'm sure it's happened, though.

Quote:
Many policies in many states have removed the appraisal clause from their policies simply because people were not familiar with the process which is meant to be an informal resolution.
Actually the apprasial clause has not been removed from policies. Also, it serves to limit the carriers liability in restricting the insured's rights. I see no reason why any carrier would remove it.



Using your own carrier is not leverage of any kind... it simply makes the other carriers job of not settling even easier.



It may be good to have your own carrier let you know what they would pay as this gives the person another option but it's not going to change the amount of any offers.



IMHO the best way to get the other person's carrier to reconsider the amount of their offer is to point out the errors in their evaluation... and there is a _good_ chance their are going to be errors. Determining the amount of total loss is certainly one area where the owner of the vehicle wants to review the information considered in determining the value of the vehicle. Also, it does not hurt to try and get the carrier to increase their offer with providing documentation showing that the value is indeed greater then they are offering or that the information they used was incorrect.
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PostPosted: Tue Jun 10, 2008 4:19 pm   Post subject:   

I wish this was true and again I agree with you that it should not have been removed. One would have to ask why did they remove this simple remedy available to policyholders.



Quote:
Actually the apprasial clause has not been removed from policies. Also, it serves to limit the carriers liability in restricting the insured's rights. I see no reason why any carrier would remove it.




Shelter Mutual and American Family in Missouri has no appraisal clause as many others have removed it. I put in an inquirey to the Department of Insurance regarding this matter. They claim it's an option now to insurers. They do not have to offer appraisal in my state. It would seem the department of insurance took away a long standing remedy for policy holders to dispute total losses and repair costs. Now it's basically, If you do not agree with your insurer and can not resolve it, you have to sue your own insurer for the underpayment, based on new language being allowed to be written in not only Missouri policies but across the country.



Since I am a policy holder I posed some questions to my Department of Insurance to which they replied



Quote:
Thank you for contacting the Missouri Department of Insurance, Financial Institutions and Professional Registration (DIFP). You asked many questions regarding the total loss process. Let me start by saying that if you believe you have received unfair treatment in the handling of your claim you have the right to file an official complaint with DIFP. We would send a copy of your complaint to the insurance company and ask for claim documents to review the claim and their handling of the claim. We would look to see if your vehicle should have been declared a total loss, but the insurer continued to authorize repairs (over the 75% mark), You can file an official complaint by responding with your address, your policy and/or claim number, the name of the insurance company, your address and two contact phone numbers.



Most of the regulations are designed for first-party claims. However, in many instances the regulations are also applied by the insurer to third-party claimants. The insurance company is responsible for determining if your vehicle is a total loss. The responsibility of the shop is to get an approval from the insurer when additional damage is found over and above the estimate(s) given to them before proceeding with the work. Your responsibility in this picture is to give the estimate written by the insurer to your repair shop to start the work.



If the shop proceeded to complete repairs without first getting proper authorization, they would share responsibility for repairing a vehicle that should be declared a total loss.



You are correct in stating that most Missouri policies (although not all) have dropped the Appraisal Clause from the auto policy.

The standard in the auto industry is to write an estimate based on "what the estimator sees" at the time. The shop should tear down the vehicle to determine if the estimate is complete and ask for a supplement for all additional damage not written on the estimate. If the shop is well into the repairs and then realizes that the engine is damaged, or the transmission is damaged, and the additional damage will reclassify the vehicle as a total loss, they would still be required to notify the insurance company at the moment they realize that there is more damage. The shop would be entitled to payment for all repairs completed up and until the shop finds and puts the insurer on notice that there is additional damage that reclassifies the vehicle as a total loss.



The total loss threshold laws have just been changed and will go into effect August 28, 2007. A total loss is to be defined as a vehicle that is damaged to the extent that the total cost of repairs to rebuild exceeds 80% (up from the recent 75% definition). The 80% cannot include hail damage.

You asked if an insurance policy reads that it pays for repairs based on the prevailing competitive prices in the market area, can they be made to produce their survey verifying area body shop rates? A consumer or repair shop would probably not be able to get the insurer to release the information in that most repair shops are promised "anonymity" when they respond with their shop information. The shops have been told that their information will be kept private. If you are a body shop and believe that the "standard rates" for your area are not truly being reflected, please file a complaint and we will address the issue.



If you believe that your insurer is denying proper repairs "based on policy language or conditions," but you find no language in the policy, once again, file a complaint and state so and we will look further into the matter. We will check the policy to determine if the language they are addressing is in the policy and whether the language is a true representation of the statements they have made.



An insurer "can" and usually "will" pay a repair shop directly for all supplements written on a claimant's vehicle. An insurance company normally will do this to make sure that the repair shop is not "set adrift" by the owner of the vehicle and not receive the balance of payments owed for the repairs that were completed.



Most of the above information is based on industry standard and is not part of Missouri Unfair Claims Settlement Practices with the exception of when to declare a vehicle [attachment "Salvage Laws.doc" deleted by Brenda Robinson/MDI/sdcnotes] a total loss.



Feel free to contact me at the phone numbers listed below if you have additional questions or need further clarification. Also, feel free to respond with the above information if you would like to file an official complaint.



I am enclosing a synopsis of when a vehicle should be declared a total loss. Please keep in mind that new legislation has changed the definition from 75% to 80%.




(
Quote:
51) "Salvage vehicle," a motor vehicle, semitrailer, or house trailer which:

(a) Has been damaged to the extent that the total cost of repairs to rebuild or reconstruct the vehicle to its condition immediately before it was damaged for legal operation on the roads or highways exceeds seventy-five percent of the fair market value of the vehicle immediately preceding the time it was damaged;

(b) By reason of condition or circumstance, has been declared salvage, either by its owner, or by a person, firm, corporation, or other legal entity exercising the right of security interest in it;

(c) Has been declared salvage by an insurance company as a result of settlement of a claim for loss due to damage or theft;

(d) Ownership of which is evidenced by a salvage title; or

(e) Is abandoned property which is titled pursuant to section 304.155, RSMo, or section 304.157, RSMo, and designated with the words "salvage/abandoned property".

The total cost of repairs to rebuild or reconstruct the vehicle shall not include the cost of repairing, replacing, or reinstalling inflatable safety restraints, tires, sound systems, or any sales tax on parts or materials to rebuild or reconstruct the vehicle. For purposes of this definition, "fair market value" means the retail value of a motor vehicle as:

a. Set forth in a current edition of any nationally recognized compilation of retail values, including automated databases, or from publications commonly used by the automotive and insurance industries to establish the values of motor vehicles;

b. Determined pursuant to a market survey of comparable vehicles with regard to condition and equipment; and

c. Determined by an insurance company using any other procedure recognized by the insurance industry, including market surveys, that is applied by the company in a uniform manner;


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PostPosted: Wed Jun 11, 2008 12:15 pm   Post subject:   

He's right Shelter's auto policy does not have the appraisal claus in it any longer...



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PostPosted: Mon Jun 16, 2008 1:54 am   Post subject: as stated above  

as stated above, you should be able to subrograte (i think thats how you spell it) with your insurance company. you will have to pay a deductiable generally. but after everything is said and done you usually get that deductibe back. I would personally look up subrogration laws in your state. hope it helps Smile

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