Cash pay-out

by whatsyurprob » Thu Mar 27, 2008 01:23 am

I'll try to make this as short as possible.

I'm the victim of a parking lot rear end accident. The guy who hit me has admitted all liability. I've gotten an estimate at a shop of my choosing. His insurance company (AAA) sent out to my house an independent appraiser. She did her report but failed to include pictures of the most expensive damage (There's a difference of $500.00 comparing her report and the body shop that I took my car to). After I received the appraisers estimate I called AAA and they said that if I wanted a cash pay-out I would be the one responsible for getting the proof that the part the appraiser 'conveniently' left out was really damaged. This would be at MY expense. AAA, says that my bumper has to be completely dismantled to prove this. I say, BULL!!!

U see, the problem is, it's my car that got hit. If the other party has admitted all liability I shouldn't have to pay a dime, not to mention that it's none of AAA's business if I get the car fixed or not. Am I right?

BTW, Totaling the car out is not an option seeing as though it's worth much more than the damage caused. This is not in dispute.

I live in California.

Thanx in advance.

Total Comments: 83

Posted: Sun Mar 30, 2008 04:50 pm Post Subject: I believe the following quote to be innacurate.

As for "diminished value", you cannot determine the amount the vehicle's value has been diminished by having an accident and being repaired, if the vehicle has not been repaired. If you try and sell a wrecked car, you're not going to get as much as an unwrecked car, period.

You can calculate the loss in value simply by subtracting the cost the insurer pays for damages whether you fix the car or not; subtract the salvage value or trade in value from the pre-loss value. The difference in what you would have gotten for trade in value if it did not have the accident history, or the difference of the salvage value from the non repaired vehicle would be your loss in value or diminishment of value. It really a very simple calculaton called subtraction.

Insurers would like you to believe that diminishment of value does not exist. But they do pay for it. Take for example this definition included in the Missouri Department of Insurance helpful information site. It may suffice as proof for some but not all.

Diminished value is the difference in fair market value of the auto immediately before the accident and the auto
immediately after the accident causing the damage. Diminished value may or may not be recoverable under an
auto accident claim depending on the relationship between the injured party and the insurance company.

If you make a claim under someone else's policy (e.g. your auto is damaged because someone else hit you),
Missouri courts have included diminished value as recoverable damages - Rook V. John F. Oliver Trucking
Company, 566 S.W.2d 200 (Mo. App. 1977). In this case, the court said the amount of damage should be
measured from the fair market value immediately before the collision and the fair market value immediately
after the collision. However, if repairs have been made to the auto as a result of the accident, the court said
that the dimished value should be the difference between the fair market value immediately before the collision
and the fair market value after the repairs.

I believe the above quote makes a distinction as to whether the vehicle has been repaired or not as to how the definition applies, but the fact is diminishment occurs wether you repair or whether you do not.

Posted: Sun Mar 30, 2008 06:21 pm Post Subject:

Diminished value is interpretted differently by State. Also, it's an area noone can seem to agree on. The reason being, it's based on an assumption.

Some say the value has diminished at the time of the accident, and should be paid then.

Others say it cannot be determined until it is sold.

To pay diminished value at the time of the accident is saying IF you sold it now, you would lose X amount of money, so we'll pay you now. That insured drives if or another 5 years and the value they have lost is much lower at that time. Therefore, the insurance carrier had to pay someone an amount they may not have been entitled to.

I repeatedly get the complaint about insurance rates always going up, but they will continue going up as long as the carriers are forced to payout money that may not be due to someone.

I am always ready to take the side of a consumer, since inevitably, I pay insurance premiums and am a consumer too.

The problem is, we can argue diminished value all day and everyone will be right to some extent. The OP really needs to speak with someone about how their state handles diminished value.

I, as a consumer, would be upset to see someone collect on diminished value if they did not even fix the car. And beleive me, I used to hate insurance companies before working in the industry and having helped many people myself.

Here is a site that shows even body shops are at odds on the diminished value of vehicles.

http://www.asashop.org/autoinc/sept97/value.htm

Posted: Sun Mar 30, 2008 06:56 pm Post Subject:

DV- Whether you believe in DV or not…. lets say you do. What is the value of a 24 year old Toyota? A grand maybe 2, unless its lined in gold or had been bedazzled. No offense, but a 24 year old Toyota. I just don't see a DV claim going very far. Lets say your state allows DV claims, what are you look for (money).

Posted: Mon Mar 31, 2008 02:44 am Post Subject: One more time

In this case, the court said the amount of damage should be
measured from the fair market value immediately before the collision and the fair market value immediately
after the collision.



We are talking third party claims in which an insurer steps up to pay for damages under the liability portion of a policy for the negligent actions of their policyholder including any loss of value which can be measured. This is the measure of damages for the restatement of a tort; the courts have ruled this is so in all states.

The loss in value is greatest when the damage is more severe and when the vehicle is newer. After a time when the value of a vehicle depreciates the loss in value is negligible as in the original posters vehicle possibly. The attorneys that normally handle loss of value claims do so on contingency that they are able to collect. Maybe if insurers made a reasonable attempt to pay for these losses so that the damaged party does not have to litigate the costs could be mitigated somewhat. But as usual most insurers deny they owe any DV and force the damaged party to hire an attorney.

Until the insurance industry can legally exclude certain types of damages on third party losses, specifically loss of value, it will be owed. It matters not whether an insurer feels it is wrong that if a party chooses not have the damage repaired or whether they drive the car for twenty five years, the courts have concluded that loss occurs immediately afer the impact and not when and if the vehicle owner chooses to sell the car.

Perhaps you shoud concentrate your displeasure with autodealers and carfax and demand that they not penalize people who trade in their damaged and repaired vehicles by offering them less than fairmarket value comparable to a vehicle that has no accident history. Make them accountable so you can continue to offer lower premiums. Why should insurers that can show reasonable profits by properly indemnifying policy holders and repairing third party claimant's vehicles be penalized because other insurers can not do the same. Let the weaker companies learn lean operating accounting and just work a little faster and in greater volume like they insist the collision industry must do.

Why should policy premiums not be adjusted to account for these types of losses. Where is it written that insurers can not go to their departments of insurance and ask for increases to cover these losses. Every service and product of manufacture eventually increases in price (with perhaps the exception of electronics). Why should an entire industry have to toe their bottom lines just so insurers can keep offering low cost coverage. The collision industry labor charges in the last 25 years have not even kept up with the rate of inflation. I am certain that insurance employees have been extended increases in salary of the same period to account for the increased cost of living, why shouldn't the collision industry.

Posted: Mon Mar 31, 2008 04:38 am Post Subject:

I am certain that insurance employees have been extended increases in salary of the same period to account for the increased cost of living, why shouldn't the collision industry.

Where has it been said/written that you cannot charge whatever you want?

With 5 body shops on every corner how unprofitable can the industry be? In my city we have 4 Home Depots and 4 Lowes. Yet there are probably 60 body shops. Are they all losing money?

Posted: Mon Mar 31, 2008 04:42 am Post Subject:

The problem that I have with DV claims, they are soooo subjective. Really who can determine or should determine diminished value. OH! The fair market value. What is fair market value? What is fair market value for a 24 year old Toyota or a 2008 Ferrari Enzo? Market Value is basically what someone is willing to pay you for something that you are selling. Add the FAIR and it becomes an estimate. The estimating part is what I have a problem with. Who decides…. An auto dealer, adjuster, some bean counter at the carrier, personally I think Lori should handle all of theses, but she doesn't seem to have the time. I get it, Mr. Claimant takes the damaged or repaired car to their local dealer and asks what they would give them for the car now and then if it had not be in an accident, and then the carrier should just pay the difference. Sure!

As for the ruling that Mike posted, that really doesn't make any sense. Why would they rule that DV would be calculated directly before and directly after the accident. I think all would agree that someone would pay more for a repaired car then a wrecked car…. even if they would pay even more for the same car that had not been in an accident at all.

I can also understand the stance that insurance carriers take on DV claims. You have to prove your loss, and in these cases they aren't taking the expert word from "Big Bob" at Bob's Auto World. No offense Bob, but you may have a vested interest in this. So take them to court and roll the dice. It tends to weed out the 24 year old vehicles that attorneys won't take on because even they know its a farce.

Posted: Mon Mar 31, 2008 05:04 am Post Subject:

I think Mike's post states that there is precedent in MO to asses DV prior to the vehicle being repaired. That is, the owner does not have to have the vehicle repaired in order to have suffered a DV loss. Basically, yes... the person does not need to prove the loss as obviously this could only be done if the vehicle _was_ repaired. Hey, at some point you are going to find that one judge who screws up.

I've said it all along and it can't be denied... DV claims are are only the _perception_ that a vehicle is worth less. In reality, it's not. It would not make a lick of sense for any insurance company to support this perception as it only serves to increase the amount of the claim payment... even though no loss has really been incurred. That is, a claim payment for DV would only serve to perpetuate the myth.

Of course no one can really prove a DV amount prior to the sale. If you've ever seen a "professionally" produced report on a DV claim you'd know exactly what I'm talking about.

Posted: Mon Mar 31, 2008 11:21 am Post Subject:

Here are some of the 'qualifying' questions on one of the 'helpful' diminished value sites, (they only charge, oh, 199.00-a percentage)

1) Was your vehicle damaged in a collision? Yes No
2) Was your vehicle less than 7 years old? Yes No
3) Was your vehicle worth at least $10,000.00? Yes No
4) Was someone else at fault for the accident? Yes



As we see our OP is disqualified on 2 out of the four...so seems the 'professionals' re: diminished value, don't think he even qualifies to ''buy'' a report...

also on their site they say this....

Dimished Value (DV) is the loss in market value that occurs when a vehicle is wrecked and repaired.

Again, apparently the 'pro's' that are paid to type up these reports, (many/most without ever seeing the car)...agree on this one, car's too old, not worth enough, and you need to repair it before you even think about a diminished value claim!

Posted: Mon Mar 31, 2008 04:40 pm Post Subject: you get what you pay for.

I assure you the reports from the consulting company I am associated with, are prepared for consumers just as they would be for an attorney. It is supported by research and over 20 pages of documentation. The report is prepared for an attorney and is complete with pictures and supporting evidence to initiate their demand to the negligent party or to be used in a court of law.

They are not your two page opinions that you may be used to. Even the Georgia 17C formulas that insurers use pale in comparison. The insurer's attempt at producing a diminished value report to challenge a professional report is humorous and deficient to say the least. They are easily refuted in court. They look as complete as SOME insurance prepared guestimates.

Inexperienced appraisals by incompetent inspectors in which partnered shops repair vehicles will continue to drive the public perception that damaged vehicles are worth less than non damaged vehicles and the market validates that fact. It is the consumer perception that insurers attempt to pay for cheap repairs also fuels the belief that some wrecked and repaired cars are not worth as much as non damaged cars. As long as there are collision shops that are greedy and take short cuts on repairs because they will not ask for what is properly required to restore the damage for fear of being removed from programs also drive the concept of DV and their inability to learn to channel the liability for the insurance specified repairs back to the insurer.

Keep singing that old tune and I'll keep humming mine.

Posted: Tue Apr 01, 2008 02:28 pm Post Subject:

Inexperienced appraisals by incompetent inspectors in which partnered shops repair vehicles will continue to drive the public perception that damaged vehicles are worth less than non damaged vehicles and the market validates that fact

Are you saying that DRP's are the reason for diminished value claims?

As long as there are collision shops that are greedy and take short cuts on repairs because they will not ask for what is properly required to restore the damage for fear of being removed from programs also drive the concept of DV and their inability to learn to channel the liability for the insurance specified repairs back to the insurer.

And of course cheap insurance companys? Then from this I'm to assume that you do not write nor encourage any customer who has a vehicle repaired in your shop to pursue a diminished value claim right? riiiiiiiiiiiiiiight............ :roll:

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