Can a vehicle be totaled after some repairs are done?

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PostPosted: Thu Jan 28, 2010 3:32 pm   Post subject: Can a vehicle be totaled after some repairs are done?  

I was involved in a wreck back in October. A drunk driver ran a red light and T-boned me on my driver's side.



I'm dealing with her insurance company, and was told that a total loss on my vehicle would be 80% of what it's worth ($16,500). The initial estimate came back $6,884. Once the body shop did a full tear down, more damage was found, + $4,215.



While repairs were being done, more damages were found totaling $1,819 more, bringing our total to $12,918. $13,200 was the mark for them to total the truck, so I was $282 shy.



Now that repairs are finished on the body, a short test drive in the truck showed that there was damage to the steering gear assembly, possibly more. The shop told me about $800 between parts a labor to fix it. I haven't got a call back from the adjuster yet, just curious if now since they have all this money already tied up in my truck, can/will/should they still total my truck since repairs have now gone over the 80% mark? I was really hoping they would total the truck and be done with it in the first place, but they opted to repair it.



What's my legal rights on this also, as I have not signed 1 piece of paper stating I agree for them to repair my vehicle. I simply told her which body shop I preferred in town, before the truck was even appraised, and the insurance company told the body shop to start fixing it, and sent them a check, and emailed me a copy of the estimate. That was it. When more damages were found, they sent another check to the body shop, and emailed me another estimate, but as far as me agreeing to anything, or signing anything, I have not.





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Also, a question about the rental car. Are they allowed to take my rental car away because my bodyshop is too slow for the repairs? My adjuster called about 4 weeks ago and told me I had to turn my rental in because the body shop had exceeded an acceptable repair time.


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bwhite757
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PostPosted: Thu Jan 28, 2010 4:27 pm   Post subject:   

I don't know what state the loss occurred in so I can't speak for those state laws on an insurance to consider a vehicle to be a total loss.



I can almost guarantee that the carrier won't now consider it a total loss.



It seems that the carrier did everything they could possibly do to handle this claim correctly. They obtained an estimate and they obtained a supplement. At that time it did not appear the vehicle met the 80% mark so they considered it repairable. No reason not to think it would not be repairable. Then the shop found $2000 more in damages? This might have only been 1-2 parts but's it still pretty big not to have caught it upon tear down. Why was it missed? Then _another_ $800 was found? Again, why did the shop miss this?



I'm sure had the carrier been told of all the damages upon tear down that they would have considered the vehicle to be a total loss. What the state laws say about thinking the vehicle was repairable and then having it go over the 80% after 3 supplements.... I don't know.



Your legal rights, as always, are that you can file suit against the insurance company for some type of damages you sustained. It's up to _you_ to show and prove what your damages are.



An insurance company cannot authorize repairs on someone else's vehicle. Only the owner can do this. At some point you must have given this authorization for repairs to the shop. The insurance company is only obligated to issue payment.



Can they cut off the rental? Yes, if what you state is correct. Insurance companies usually take the repair hours and divide by 5 to determine the days needed to make repairs (adding in weekends and holidays). This means that they only expect the shop to work 5 hours a day on the vehicle. If this is what this carrier did, is that not reasonable?



Your shop missed thousands of dollars of damages even after the tear down and they are taking more then an extra 4 weeks in repairs? What is your opinion of this shop? Have you asked them why it's taking so long? Ask the insurance company how they determine the repair time and then ask the shop why they were not able to make the repairs within that time frame.

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PostPosted: Thu Jan 28, 2010 4:33 pm   Post subject:   

First thing is first. If you never gave the shop a signed authorization, thats a problem, for the shop and the insurer. However, there maybe some red flags by the shop since (only speculating) that you or they were communicating during the repair. Secondly, your vehicle was not torn down and inspected thoroughly enough. If it had, you would not be in the situation you are in. Do you have the documentation of who, what, where and how gave the authorization to start on your vehicle? I am working a case right now that is very similar in nature. Right now, the shop and carrier are up a creek without a paddle. If you are 100% positive you signed no paperwork or authorization, in my opinion and experiance you have a LOT of leverage. You should contact an attorney. As far as your rental, you are prettty much responsible for that, however if the carrier says the repairs have taken to long, would the shop agree to pick up the rental fees?



At this point, I doubt the carrier will deem it a total loss and there is probably not a whole lot you can do. But concentrate on the "no authorization" if this is really the case.



Quote:
At some point you must have given this authorization for repairs to the shop.




Believe it or not T, I have seen this take place on many occasions with both the insurer and the shop starting repairs without the owner's consent.
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PostPosted: Thu Jan 28, 2010 5:29 pm   Post subject:   

Quote:
Believe it or not T, I have seen this take place on many occasions with both the insurer and the shop starting repairs without the owner's consent.
I believe it... but the insured has nothing to do with the actual repairs to the vehicle unless it's a DRP. The insured only determines the extend of the loss and issues payment accordingly. It's up to the owner of the vehicle to have it repairs. But all of this is between the shop and owner.
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PostPosted: Thu Jan 28, 2010 6:00 pm   Post subject:   

Quote:
but the insured has nothing to do with the actual repairs to the vehicle unless it's a DRP. The insured only determines the extend of the loss and issues payment accordingly. It's up to the owner of the vehicle to have it repairs. But all of this is between the shop and owner.




You mean the insured or insurance company?



In my case, I wrote an estimate and left it with shop per the client's instructions. This week I get a call for a supplement. I go out, write it up and send it to the carrier for their review. They approve it, and send it to the shop. Long story short, vehicle was towed to the shop. Shop never called the owner, they instead called the insurance adjuster who confirmed liability. Shop started on repairs. Owner out of town, comes to get his car to take it to a shop of his choice. Car was far from a total but about 90% finished, but has many workmanship type problems. Owner no longer wants the vehicle, hired an attorney and the shop will most likely end up buying the vehicle.
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PostPosted: Thu Jan 28, 2010 6:26 pm   Post subject:   

Sorry, insurance company not the insured.



In your example it appears that the owner is stating he never told the shop to start repairs. Still between the owner and shop. Work performed by shop not being correct, still between owner and shop.

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PostPosted: Thu Jan 28, 2010 7:05 pm   Post subject:   

Quote:
Work performed by shop not being correct, still between owner and shop.




Yes, but in this case the owner did not authorize the work.
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PostPosted: Thu Jan 28, 2010 7:09 pm   Post subject:   

Quote:
Yes, but in this case the owner did not authorize the work.
So the shop did not have valid authorization to start work. since only the owner can give this, its between the shop and owner.
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PostPosted: Thu Jan 28, 2010 7:25 pm   Post subject:   

Quote:
An insurance company cannot authorize repairs on someone else's vehicle. Only the owner can do this. At some point you must have given this authorization for repairs to the shop. The insurance company is only obligated to issue payment




As I understand the policy of insurance and the options an insurer has in which to indemnify on a covered loss (first party only), is that they have three options at their disposal based on numerous court cases and precedents.

1. They can take control of the repair (means they authorize) accept all liablity by choosing the repair shop or repairing it themselves. An insurer does not want any liability associated with the repair so they typically do not choose this option.



2. They pay for the repairs in money. When an insurer elects this option they are choosing to pay for the reasonable cost of repairs at a shop of the vehicle owner's choosing (unless successfully steered by coercive pressure to use the insurers preferred shop which may most likely give concessions to the insurer) and the shop bears all liability for those repairs.



3. They total the car or replace the vehicle with one of like, kind, and quality.



Today's policies seem to commingle options 1 & 2 and implies that the insurer's estimate should prevail on payment for the loss. The policies state that the insurer will detemine the loss based on prevailing rates in the area and will use data bases used in the industry to calculate the cost of repairs. Many state unfair claims practices' acts state that if an insurer prepares an estimate that it must be an amount sufficient to repair or restore the vehicle to it's pre accident or pre-loss condition.



The conundrum occurs when the repairer determines by their final invoice that the insurer prepared estimate was not sufficient as required by statute to restore to pre accident conditon. A supplement ( an insurer term) or deficiency in payment provided by the insurer (a business term) can ameliorate the situation and rectify the underpayment for necessary repairs. The shop is not contracted by the insurer and when the vehicle owner and shop contract with each other, that is the basis on which the courts determine a contract of repair is the primary document on which the cost of repairs is determined as long as it can be proven that all repairs were both reasonable and necessary, not usual and customary.



If the repairer proceeds without a contract of repairs with the shop or an authorization to proceed with repairs based on the insurers estimate by the shop, then most states would recognize the repairs as unauthorized by the vehicle owner and you could hold the shop liable for all damages or costs to restore your vehicle to pre-loss condition. In all practicality, you could walk in with the sheriff and obtain your rightfully owned property and not pay a dime for the complete repairs of your vehicle if the shop proceeded without authorization. The shop at that point would be left holding the bag and the loss for assuming they had a commitment to repair simply because the insurer suggested they take the car to a certain shop or the vehicle owner left it for an inspection for purpose of determining the cost of repairs.



Every policy holder has a right to adjust their own claim by detemining the cost of repairs based on their chosen repair shop. In order to file a claim for a property loss so that the vehicle owner may be indemnified, they must prove their loss. Typically most policies have an appraisal clause to remedy this situation or challenge the insurers prepared estimate for payment of loss. However, many have also eliminated it with the new language which is puzzling to me, as it implies if you do not agree with our assessment , see us in court or we are now the experts at determining losses which could set up a lot of bad faith claims for failure to properly determine a loss.



Of course this is just my opinion based on the price of rice in China. When an insurer prepares an estimate on which they claim the repairs should be made, it is done for two purposes. One is to control the cost of the repair and the other is to control the repairer which is typically not contracted to the insurer. Those who choose not to be controlled by the insurer are typically steered heavily against so that the insurer estimate will prevail.


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PostPosted: Thu Jan 28, 2010 7:40 pm   Post subject:   

Quote:
So the shop did not have valid authorization to start work.




Nope. They just started working on it. It was towed to their shop, for whatever reason. The owner was out of town. When he came to get it, his intention was to have someone else perform the work, but by that time, the work was almost complete (reassembling). He has some very valid concerns about the workmanship, the use of alternative parts and other things. The shop at first tried to throw me in the middle of it by saying that I was the one who authorized it. Rolling Eyes
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PostPosted: Thu Jan 28, 2010 7:47 pm   Post subject:   

Quote:
If the repairer proceeds without a contract of repairs with the shop or an authorization to proceed with repairs based on the insurers estimate by the shop, then most states would recognize the repairs as unauthorized by the vehicle owner and you could hold the shop liable for all damages or costs to restore your vehicle to pre-loss condition.




They infact do, but it is not enforced. Shops think that when an appraiser/adjuster approves a supplement, that's another green light to continue repairs. Infact in Missouri and Kansas possibly other states as well, the owner still needs to authorize additional repairs. I can't remember if the statute requires authorization in writting or verbal, but the supplement either generated by the shop or insurer is not an acceptable form of authorization. It can be considered just as an unauthorized repair as if it was unauthorization to even begin work in the first place.
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PostPosted: Thu Jan 28, 2010 7:54 pm   Post subject:   

Regarding the original posters question of whether the vehicle should now be considered a total loss, I believe if the sum of all the repairs exceeds what would have commited the insurer to total the car had they known prior to repairs being completed, it is required of them to now report the vehicle as a total loss to the state if it meets the threshold.



Afterall, the damages were the result of one occurance or the attempt to repair based on the damages created by the initial impact. I've seen vehicle owners drive the car for a year and fight with an insurer on the quality of the repairs (by the DRP or insurer preferred shop) only to have that vehicle total at a later date because additional repairs necessary to bring the car to pre accident conditon failed initially.



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PostPosted: Thu Jan 28, 2010 10:23 pm   Post subject:   

.

.



bwhite757,



I have one Question...



Did you authorize the Insurer to Pay the Shop directly??



If not... I wonder what Legal reason they have for giving _Your_ Claim money to someone other than You?



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PostPosted: Sat Jan 30, 2010 4:22 pm   Post subject:   

Boy, This thread went eerily silent didn't it Fred?



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PostPosted: Sun Jan 31, 2010 1:53 am   Post subject:   

Well Mike, now that you mention it..... Yes it did. I was hoping someone would clarify if such an action could be written into a policy. One wouldn't think so.... but I really don't know for sure.



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