problem with big insurance companynot letting me coduct bus

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PostPosted: Sat Apr 16, 2011 6:07 pm   Post subject: problem with big insurance companynot letting me coduct bus  

can they ultimatlly tell a consumer where to repair their vehicle

abcrx300
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PostPosted: Sun Apr 17, 2011 1:06 am   Post subject:   

Although some of your post appears to be missing, the probable answer to your question is NO, you may use any licensed repair facility of your own choosing. The insurance company will not pay more than it has determined the claim value to be. You would be responsible for excees charges, if any.



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PostPosted: Mon Apr 18, 2011 1:46 pm   Post subject:   

Quote:
The insurance company will not pay more than it has determined the claim value to be. You would be responsible for excees charges, if any.




This statement is not entirely accurate. I have final invoices paid by insurers that exceeded their estimates by up to 50% in some cases to whom the vehicle owners were told they would only pay what they determined.

This was the summary of a very recent court case.



Quote:
the third party plaintiff is entitled to be compensated

for the reasonable cost of repairs that are necessary to

restore the vehicle to its pre-accident condition. Plaintiff

asserts that the bill submitted by (bodyshop)is a reasonable

charge. (The insurer) argues that the amount it tendered is the

reasonable sum required. (the insurer) did not attempt to

establish the (bodyshop)rate was unreasonable. A reasonable

charge implies a range of charges. If the charge falls within

that range, it will be deemed to be reasonable. No particular

charge can be said to be the only reasonable charge. The

(bodyshops)charge fell within the range of reasonableness.

I concur with what Judge X wrote. There's no one

set reasonable charge. It's not x. It's not y. It's not

z dollars. It's that range. The y fell within it. The

amount also -- it applies the same way with the paint rates

It applies the same way with the body repair rates. It's a

tnumber. It's what is a reasonable charge.

No evidence was presented to refute the plaintiffs'

claim that they paid a reasonable price to have their vehicle

brought back to its standard -- to its pre-accident condition.

There was none. This Court was never presented with any

evidence that said x or y is on its face, or even digging

below the surface, an unreasonable amount. That is this

Court's understanding of basic damage evaluation in a

negligence claim.




Insurers call them supplements in some cases I call them underpayments. Insurers do not like to have final invoices in their files that show they paid less than a contract said they would pay and in the case of the third party, many courts have determined insurers have to prove that final invoices that exceed the insurer estimates have to be proven unreasonable. The liability portion of a third party claims only gives the insurer the authority to pay the amount the insured party becomes legally liable for up to the limits of the policy and does not give the insurer the authority to determine that amount no way no how unless the damaged party simpy agrees or fails to assert their legal rights.


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PostPosted: Mon Apr 18, 2011 6:03 pm   Post subject:   

Mike is correct. In my "thought" process as I typed the post, what I was trying to communicate was that if the damages are $1500, you can't expect the insurance company to pay $3000 because the repair shop "threw in" a custom paint job, or other "enhancements" that were not required to bring the repaired vehicle back to its pre-collision state.



But notice what it is that Mike has submitted. A plaintiff submits evidence of what he believes is a "reasonable" amount to complete repairs, the insurance company says what it paid was "reasonable" (but less than the plaintiff's cost). Then . . . it goes on to say, "The insurer did not attempt" to refute the reasonableness of the body shop's charge.



That's like a person being charged with a crime and putting on no defense. What other outcome can be expected than what the district attorney has charged and argued? Who knows how different the outcome would have been if the insurance company defended its claims determination in a different manner. Although a good one, this is a singular example.



That's not to say that the Appellate Court's understanding of what is reasonable was faulty either. The Court was very clear in its summation: "It's [whatever] is a reasonable charge . . . is this Court's understanding of basic damage evaluation . . . ."



A Supreme Court Justice once said something similar about pornography: I can't define it, but I know it when I see it.



So, to make my statement above more precise, I should have said, "The insurance company is not obligated to pay more than the reasonable charge to repair the vehicle to its pre-collision condition." Who decides what is reasonable? It might be a judge or a jury and not the vehicle owner or the insurance company, as Mike has shown.



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PostPosted: Mon Apr 18, 2011 7:20 pm   Post subject:   

Quote:
But notice what it is that Mike has submitted. A plaintiff submits evidence of what he believes is a "reasonable" amount to complete repairs, the insurance company says what it paid was "reasonable" (but less than the plaintiff's cost). Then . . . it goes on to say, "The insurer did not attempt" to refute the reasonableness of the body shop's charge.




Oh they attempted to refute it. The insurer wanted to argue apples and oranges intead of apples and apples. It's all about who is contracted to whom and who can interefere with a contract between parties and basic tort restatement.



That decision is on page 48 if anyone would like to read who the players were that showed up for that game. The court transcripts are very interesting to read if you like that sort of thing. Talks about how an insurer creates a prevailing competitive price and why that price is only good between two contracted parties. The judge even went so far as to say he didn't care if an insurer used chicken entrails and various other means to determine a prevailing competitive price as it has nothing to do with paying damages in a civil tort.



http://www.autoepi.org/uploads/Wilkins_v_Delross_Mason_v_Ellis_Sonomo_ CA_10_29_09_Transcript.pdf


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PostPosted: Tue Apr 19, 2011 11:31 am   Post subject:   

Quote:
The judge even went so far as to say he didn't care if an insurer used chicken entrails and various other means to determine a prevailing competitive price as it has nothing to do with paying damages in a civil tort.




Interesting reading. But after reading this Small Claims Court Appeal (heard in Superior Court, not the state Appellate Court), it is evident that this is case does not directly involve the insurance company (although the Insurance Company provided its policyholders' defenses).



The action was between the two parties to the tort (Vehicle Owner A vs. Vehicle Owner B). A was found to be at fault, B has his vehicle repaired, and A (through his insurer) failed to pay the full cost of the repairs, so B sues A for the difference to which he is entitled. The Court repeatedly stated this to A's defense attorney during his summation: This is not a case about whether the Insurance Company acted reasonably, but whether the defendant (A) paid the full reasonable amount to repair the damage he negligently caused to plaintiff's (B) car.



So, in the longest sense, my original (admittedly, faulty) statement that the insurance company pays what it believes the value of the loss to be, is still an accurate one. Can it be forced to pay more, as in this case, absolutely.



The judge in this case, however, made a big distinction between first- and third-party claims. In a first-party claim, the insured has accepted the contract from the insurer, and if he uses the insurer's "recommended" facility, the full cost of the repair will be covered. But if he uses another facility that charges a higher rate, the insurer might not pay more than it would at its recommended facility. What the judge left open was whether that matter was reasonable, suggesting that the Insurance Company would be on shaky ground if it failed to pay the full value of a repair at a non-preferred shop, if that charge was "reasonable", even though more than the insurance company would pay somewhere else. That makes my initial statement faulty, as I admitted.



But in this case, where the evidence was that repair rates ranged from the $70s to the $110s, since $98 was within that range, the judge believed it was a "reasonable" amount. No one presented evidence that $98 was unreasonable, least of all the defense attorney for (A) (both As).



And the only issue before the court was whether $98 was reasonable. Not whether the insurance company was being reasonable toward B (both Bs) by only paying $88. As the judge pointed out, the Insurance Company was not a party to the matter. The tort was created by the negligence of A, the damages of B were the responsibility of A, and A did not (through its Insurer) pay the full (reasonable) amount of the loss. Which is consistent with Mike's closing statement above.



What was most interesting, however, was the judge's determination that the plaintiffs' were NOT entitled to recover their attorney's fees. The judge asserted that the entire matter should never have been litigated. He stated:



Quote:
Quite frankly with regard to the third party claims this Court does not believe they should have been litigated. I think the answer is clear. And I quite frankly see it as an effort on behalf of the insurer to try and suppress the price charged by someone outside of their range. Unfortunately when we're looking at the issue of attorney fees I've got to look at the behavior of the defendants.




And in not awarding the attorney's fees, the court was saying that A should not be penalized for the failure of his insurer to act reasonably. But the judge certainly made it clear that he believed the insurer was deliberately being unreasonable in its failure to pay the full value of the loss only because that value was more that it would have paid to its preferred shop.



Almost as if he was inviting a future case in which a first-party insured took their vehicle to a non-preferred repair shop and their insurer failed to pay the reasonable cost of repairs, so he could hammer the insurance company. And probably award attorney's fees in that case!



Love to read these kinds of legal documents! Thanks Mike!!


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PostPosted: Tue Apr 19, 2011 2:25 pm   Post subject:   

I think you are going to see a lot more court cases with assignment of claims to the shops so the repair shop can step into the shoes of the vehicle owner. This does two things. 1. the shop can release the vehicle with an underpayment. 2. The vehicle owner is not caught in the middle between the shop and the insurer. Many insurers attempt to negotiate with shops knowing full well the shop is not a party to the first party contract of insurance and the vehicle owner is clueless as to how their vehicle should be repaired according to manufacturer recommendations.



http://www.autoepi.org/Legal_Cases.html The Nationwide Parker case is a first party assignment of claims case. I recently attended a seminar with Mr Parker in attendance with attorneys explaining how this case was presented and why the decision went in Mr Parker's favor and the appeal was denied.



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PostPosted: Wed Apr 20, 2011 2:57 am   Post subject:   

Great link! Thanks Mike!!



It makes perfect sense to do the assignment. We've been doing that with health insurance for years -- only the insurers (mostly HMOs and PPOs these days) do a really good job of beating up on hospitals and doctors -- who are not as adept at fighting back/negotiating their contracts.



In California, we have the Dept of Managed Health Care to take on the HMOs, and they've done quite well in their first ten years. Kudos to Director Ehnes.



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MaxHerr
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