Auto Detective

Car Concerns Radio Show

2009-06-09T13:01:00.001-05:00

Last Friday, June 5, 2009, I was a guest on Car Concerns radio show. Harry Douglas Is The Host Of The Fastest Growing Automotive Talk Show In Radio! The show and Harry can be heard live on the internet at http://www.carconcerns.com/ every Week-Day Morning 9:00 to 11:00 A.M. (EST) Now For Car Buyers Only: Car Concerns Extreme! Saturday 2:00 to 5:00 P.M. "When Your Money Is On The Line...Call The Line That Is On The Money!" Harry takes calls at USA TOLL-FREE: 1-877-958-5850

Last Friday’s show can be heard in its entirety at: http://recordings.talkshoe.com/rss48329.xml
"EPISODE537"

Thank you to all who listened in.

Crash Talk Radio

2009-05-19T12:25:00.004-05:00

I will again be a guest on CrashTalk Radio, a show for consumers to learn about collision repair.

Saturday, May 23, 2009
11:00 AM – 12:00 Noon
http://www.am1090seattle.com/ “Listen Live” button top left
Phone in #: 1-877-753-1090
e-mail: crashtalkshow@gmail.com

Potential topics for discussion:

Diminished Value
Poor Quality Repairs
Insurance Steering/DRP
Appraisal Clause
Insurance Buy Backs
Rebuilt Titles
Certified Used Cars
National Motor Vehicle Title Information System
Total Loss Vehicles
Consumer Fraud – purchase of previous repair w/out disclosure

If you have questions about any of the above topics or a situation of interest to you email them anytime or call in.

Hope you will tune in and enjoy the show.

Ken

Kenneth J. Klein
Consumers’ Auto Detective
215 W. Chicago Street
Elgin, IL 60123
847-289-1392
www.consumersautodetective.com
http://autodetective.blogspot.com

Insurance Buy Backs

2009-04-07T12:46:00.002-05:00

What is an insurance buy back? When a vehicle has been poorly repaired in the course of an insurance claim and where the cost to re-repair those deficiencies are not economically feasible, the insurance company will buy the vehicle (back) from the consumer.

This is not as rare a situation as you might think. As a matter of fact, Copart, a company that auctions insurance salvage actually lists “buy backs” as a category of salvage.

Problem? Problem 1, in as much as these deficiencies tend to be safety related in order to be so cost ineffective to total a vehicle. More disconcerting is the fact that these vehicles are normally, complete, running vehicles that most people would not be able to determine were unsafe.

Problem 2, because they are complete and running there is little if any chance that those inequities will be corrected before they are returned to the road.

Furthermore some insurance companies choose to buy these vehicles back below the total loss threshold and will offer them with clean titles. Even when auctioned with a Salvage Title, some will be moved from state to state to clean up that title.

Hopefully these vehicles will be captured in the National Motor Vehicle Title Information Service (NMVTIS) that has been the subject of a previous blog (November 20, 2008) and will be again in the near future.

So the problem is that once again we have consumers being subjected to the undisclosed purchase of previously damaged and possibly unsafe vehicles. Additionally, even if we aren’t the purchaser, these vehicles are on the road and possibly heading toward us.

Oh and by the way, have you heard that Copart is opening up those salvage auctions to the general public? That’s right, let people that do not understand what the issue might be will be allowed to bid on a vehicle that looks okay to an untrained eye. You don’t suppose that would drive the price of salvage up do you? "Enron ethics" hard at work once again.

The solution is that previously poorly repaired vehicles need to be removed from our roads if they cannot be re-repaired economically and are purchased by insurance companies.

"It's the Law"

2009-03-10T19:42:00.006-05:00

Insurance companies try to chisel the amount they pay by many means. One involves claiming comparative liability/negligence for causing an accident. Consumers should be on guard against an unjustified use of this principle.

If you live in Illinois you have seen the commercials for liability insurance. “You can lose your privilege to drive.” Why? Because Illinois has a mandatory liability insurance regulation. As at least one insurance company puts it in its television commercial, “it’s the law.” This was meant to protect residents from being hurt by an uninsured motorist. This protection is, in my opinion, a myth.

If you are hit by another you will be dealing with the other driver's insurance and you have what is called a "third party claim." In theory that company will pay your claim 100%.

However, Illinois is also a comparable negligence state. What this means is it is also "the law" that when an accident occurs it is not necessarily one person’s fault. It could be that each person is equally at fault in which case each party would pay for its own damages. Or maybe one person is more at fault than the other driver, say 90% with the other person being 10% at fault. And in that event both parties are financially responsible in direct comparison to its percentage of fault. Each situation was meant to be analyzed separately.

Now the insurance company adjuster may declare, even without fact, that you were at fault for your accident in some percentage and use that percentage to reduce the amount it pays for your property damage, loss of use, lost wages and personal injuries. Usually the percentage claimed is not enough to warrant getting a lawyer but enough that you feel taken because you had to pay something significant out of your pocket. If the damage is $2,000.00 and the adjuster claims you were 30% at fault, you get paid $600.00 less than what it costs to fix your vehicle, and you have to pay this difference.

Facts are the key to the use of comparative negligence in your accident because each accident must be analyzed on the basis of its facts.

Ask the adjuster to explain the facts on which he or she based this percentage of you fault. Do your homework before the conversation. Analyze the police report, both the description and the diagram as well as the photographs. Did the other driver admit negligence to the police officer? or did witnesses describe the accident? Did the officer give the other driver a traffic ticket? Why should you be responsible if the other driver admitted fault, if the witnesses said you did nothing wrong or if the other driver was given tickets and you weren't?

The State of Illinois has guaranteed sales for insurance companies through mandatory liability insurance. At the same time, it has given insurers what some would say is a negotiating tool but what I would consider “a license to steal” through comparable liability/negligence. If they steal from you, the expense of an attorney cannot be recovered, only the dollars that were stolen. With no clear third party bad faith language in place to encourage insurers to play fairly or potentially pay the penalty, has the State failed to protect consumers?

You can file a complaint with the Illinois Division of Insurance if you feel you are not being treated fairly by an insurance company.

Another place to air your opinion is at Insurance Gripe.Com, not a government agency but a place where you can let others know how an insurance company dealt with you.

How Low Can An Insurance Company Go?

2009-02-08T10:53:00.004-06:00

This past week an item showed up on the internet about an insurance company denying coverage on a non recovered stolen car because the vehicle's history included previously being a rental car.

According to the author, Sandra Lee of Evangelical Ministries, the policy has exclusion for theft coverage if “the ignition wire was not altered.” Although the vehicle had not been recovered to establish whether or not the wiring was compromised, the insurer denied coverage stating that as a rental car it would have “multiple drivers handling the keys.” Therefore someone "could" have pocketed a key and traced its wereab0uts? I don't know about you but it certainly looks like a big stretch to me.

As more than a curiosity I requested the name of the insurance company from the author. In so doing I stated that although I expected that the company would be a substandard, it would not greatly surprise me to find it a well known insurer either. The reply?

“The insurance company was United Equitable of Skokie, IL and the brokers who accept payment on their behalf is Great Northern Insurance of Chicago, others have contacted me about United Equitable saying they waited 90 days for claims to be settled, the claims manager made offers of 50% car value then tried to lower the price and hung the phone up on them. The story just goes on. They don't even respond to the Department of Insurance when a complaint is filed.”

This activity only scratches the surface of insurance company deceit. In the future other activities will be the subject of this blog.

This response also offers confirmation why a vehicle that was previously a rental unit is worth less money than one that never was a rental in the used car market.

Ms. Lee covers the entire story and the consequences to the vehicle owner quite nicely at:
Illinois Auto Insurance Company Leaves Minister With $20,000.00 Debt.

Air Bag Fraud Leads to $15 Million Verdict

2009-01-27T09:45:00.006-06:00

A news item appeared this past week that demonstrates the importance of tracking and publicizing Salvaged and Rebuilt vehicles. I blogged on this subject on November 20, 2008 (National Motor Vehicle Title Information System as well as January 20, 2009 Used Cars – Salvaged and Rebuilt.

The CBS affiliate in San Diego, Channel 8 reported that a $15 million award was assessed against an auto body shop as a result of that shop rebuilding a salvaged pick up truck without replacing the air bags that deployed in the original accident that totaled the truck. As a result, an 18 year old man lost his life in a subsequent accident.

The article indicated that the air bags could have been replaced for as little as $2,000. But as I stated in the January 20th blog, in order to make a profit, corners must be cut and a $2,000 corner looks mighty appealing. Most consumers would not be aware of the bags missing nor should they be expected to.

The story first aired on January 22, 2009 and along with a very compelling video are available at:
Air Bag Fraud Leads To $15 Million Verdict

In another related story, a reader sent me a link to a Canadian National Television story on the accuracy of used car history reports with regard to damage history. This is very in depth nearly 18 minute story aired in Canada on January 19th and that can be seen at:
Canada's Investigative Consumer Show Market Place

Used Cars - Salvaged & Rebuilt

2009-01-20T09:42:00.003-06:00

In Illinois we have four classifications of vehicle title. The first is unmarked or clean. After that a vehicle can be branded as Salvage, Rebuilt or Junk. Titles with Salvage or Junk branding cannot be plated and driven on the street. A Salvage vehicle can be repaired and upgraded to Rebuilt but a Junk Certificate cannot.

It is being reported by Carfax that in the United States, over five million (5,000,000) autos and trucks were written off by insurance companies as total loses in 2007. Further they are stating that over half of those vehicles are being rebuilt and returned to our highways. Think about that, over two and one-half million plus (2,500,000+) vehicles that an insurance company deemed total loses are being rebuilt.

Let’s look at the facts; first, what makes a vehicle a total loss? It is by insurance company standards. Rule of thumb is that if the damage (cost of repair) is equal to or greater than eighty percent (80%) of a vehicle’s retail value it is not repaired but sent to a junkyard. That may vary legally from State to State with at least one state that requires a repaired vehicle where repairs exceed eighty percent (80%) would receive a branded title even if it stays with the current owner.

Well, what is the price of salvage? Generally speaking, an insurance company believes it will be able to recover twenty percent (20%) in the salvage sale. Shrewd, why pay more than 80% in repairs when the company knows it can get 20%? And that makes perfectly good sense. Today, insurers are using salvage companies, such as Copart, that hold large scale auctions that they hope will increase the return on salvage units.

How does one make money by buying something for 20% of its value that will require 80% of its value to bring to pre-loss condition? Not to mention that in its repaired state it will not be worth its original value. The rebuilders have to do it by cutting corners. Since insurance companies are very cost conscience and consider every possible cost cutting procedure they can in order keep costs down, it is very difficult to find corners to cut. At least to cut them without reducing the value of the repaired car even more.

What I have seen happen is that the rebuilder straightens parts that should have been replaced, often times critical structural components that effect the crash worthiness of the vehicle. These “modifications” can effect the critical deployment of the airbags. That is if they have actually replaced the airbags and not just replaced cosmetic covers and removed lights.

Are these repairs so bad that the average person can readily see the problems? Not so much. I like to refer to these repairs as “beauty is skin deep, ugly goes all the way to the bone.” The paint shines and while there are usually many cosmetic problems a majority of consumers would never notice. Body lines aren’t good and it may not even go down the road straight. But unfortunately, the average person will not see the problems.

Additionally in Illinois a fleet operator, a company that operates over five (5) vehicles, such as a Rental Car Company, must apply for a salvage vehicle and go through the steps of bringing that vehicle to a Rebuilt classification if damage exceeds thirty-three percent (33 %) of its retail value.

Copart, the previously mentioned salvage auction company, has stated that over six hundred thousand (600,000) totaled vehicles have been retained by their original owners bypassing the Salvage/Rebuilt system. It is unclear whether this number was included in the Carfax numbers or not.

Finally, I have inspected too many vehicles that consumer’s brought to me with a Rebuilt Title that were not repaired safely.

So what can you do to protect yourself if you are buying a used car? In addition to Carfax, Autocheck also offers vehicle history reports online for a fee. If your car was previously registered in Illinois, the Secretary of State offers a free service to check the current branding of a Vehicle Identification Number (VIN). Go to http://www.ilsos.gov/regstatus/ and fill out the form. These services will only report known history and as the old saying goes, “garbage in, garbage out.” So after the known history is determined to be clean, get the potential purchase inspected.

What If You Aren't Happy With Your Insurance Company's Offer?

2009-01-12T10:16:00.002-06:00

You do have options when your company appears to be offering you less than what you think is fair in the settlement of your claim. Within your policy of insurance is a paragraph headlined as “Appraisal.” Commonly referred to as the “Appraisal Clause,” it is written into the contract to offer an insured, or the insurance company, the opportunity to settle disputes.

Although the actual verbiage will vary by insurance company contract, the Appraisal Clause generally follows this form:

If you and we fail to agree on the amount of loss, either may demand an appraisal of the loss. Each party will choose a competent appraiser. The two appraisers will choose an umpire. The appraisers will separately appraise the property and set the amount of the loss. If they cannot agree they will submit their differences to an umpire. An agreement by any two will set the amount of the loss. Each party will be responsible to pay for its own appraiser and will equally share the cost of the umpire should one be required.

It matters not whether “the amount of loss” refers to the cost to repair the property or the value of the property in the case of a total loss. By design it is intended to be a quick, cost efficient solution to disagreements between the two parties. And most of the time it does work just that way. However, some insurers may use it as a roadblock to delay settlement. In those unusual situations there is additional legal leverage that might come into play.

Steering Part II

2009-01-06T14:01:00.000-06:00

There are numerous ways that insurance companies steer customers. What is common to all situations is that the personnel that you are dealing with are trained while you are inexperienced and expect them to help and take care of you.

One method is to tell the consumer that they have to go to a shop in its network or:

They will not get their vehicle repaired promptly.
Their repairs will not be warrantied.
They may be required to pay additional costs

Another method is by telling a consumer that “you can take your car anywhere you want for repairs, but you must take it to XYZ Autobody for an estimate.”

After the consumer gets an estimate from XYZ, the insurance company states they will pay no more since XYZ is “capable” of repairing the vehicle for its estimate.

Whatever the ruse the end result is the same; The consumer is pressured to go to a repair shop that offers the insurance company concessions or possibly made to pay out of pocket for quality repairs. Neither of which should be allowed and both of which are borderline illegal at best.

Bottom line: The insurance company is responsible for the proper and complete repair to the vehicle and the vehicle owner is entitled to go to the repair shop of their choice.

Good sources for additional information are available at:

www.yourvehicleyourchoice.com
as well as

www.stopsteering.com.

Collision Damage Steering

2008-12-19T10:44:00.002-06:00

Steering is the directing of damaged vehicles to specific body shops for repair by an insurance company.

Before discussing the "hows" of steering it is necessary to review why steering exists.

MONEY!

Insurance companies choose to direct consumers in an effort to save money.

Body shops enter into a contract with insurance companies to receive additional work and therefore make money.

This arrangement is commonly referred to as a Direct Repair Program (DRP), although each insurance company has its own personal name for them. By design, poor quality repairs are not a desired result of what insurers are looking to receive? No, but they have no profit in receiving quality repairs either.

It is often argued that discounts are not a component of the DRP model. However, parts discounts, use of imitation parts and used parts are normally a part of the contract. With very finite targets of usage defined, monitored and scored. Future participation for a repair shop may hinge on maintaining desired imitation and used parts usage percentages.

Labor rates can be discounted by $2, $4 an hour or more with some companies receiving a discount of $28 or more. Yes in an industry that by and large has not yet cracked the $50 per hour mark for body and refinish labor rates, some shops may still be accepting work for less than $20 an hour for some companies. One major insurance company actually has a clause in its agreement/contract that the shop will repair vehicles for them at the lowest rate that they charge to any insurance company, fleet account or individual.

Paint and material caps can also be included in the contract between insurer and shop. What this means is that the normal method of charging for material is overridden at a set amount. When this cap is met, the shop is then expected to absorb the additional cost of materials in the repair.

Other considerations shops may provide for an insurance company include, but are not limited to, free evaluations and free storage for total loss vehicles. It is often agreed that the insurers’ repairs are given preferential treatment. This last clause has led to insurers holding shops responsible for delivery times. If the repair takes longer than the mandatory time the repair shop would then be liable for the cost of the rental car.

The consumer is told that the insurer “warranties” the repairs. However, closer inspection of both the insurance/body shop contract and the customer warranty finds that the warranty will be the shop’s responsibility.

Consumers need to question how they will benefit from the relationship of the insurance company and body shop. How will substandard parts, discounted labor, paint & material caps and time repair guarantees produce high quality repairs to their vehicles?

Radio Show

2008-12-15T08:13:00.003-06:00

Thank you all for listening and a special thanks to those that participated by calling in and emailing.

Jeff a shop owner from Chicago calling in about liability insurance problems.

Peggy from Chicago calling in with her previous steering experience.

Mike calling in about how to protect themselves from insurance buy backs.

Kevin from Chicago, a previous client of mine who was kind enough to share what he had learned working with me in the past. What a marvelous consolation of the entire process. Kevin, if you are reading this I would appreciate your forwarding your email, entering it here in the comment section or both.

Dennis and Mike Orton from Missouri that emailed in. Dennis with a question about the National Motor Vehicle Title Information System that was the subject of an earlier blog. Mike's question was more legal in nature, but a wonderful question.

Participating on the show was much fun for me and while the time didn't allow the moderator to develop those questions as deep as they could have, I will answer them here in the near future.

Mike Harbor, the moderator of the show, has asked me to be back on soon and I will be looking forward to participating again in the future. I will let you know when I am scheduled to appear again.

Crashtalk Radio

2008-12-12T07:56:00.003-06:00

I will be a guest of Mike Stroud on CrashTalk Radio, a show for consumers to learn about collision repair.

Saturday, December 13, 2008
11:00 AM – 12:00 Noon
http://www.am1090seattle.com/ “Listen Live” button top left
Phone in #: 1-877-753-1090
e-mail: crashtalkshow@gmail.com

Potential topics for discussion:

Diminished Value
Poor Quality Repairs
Insurance Steering/DRP
Insurance Buy Backs
Rebuilt Titles
Certified Cars
National Motor Vehicle Title Information System
Total Loss Vehicles
Appraisal Clause
Consumer Fraud – purchase of previous repair w/out disclosure

If you have questions about any of the above topics, or anything else collision oriented that may be on your mind, email them anytime or call in.

Hope you will tune in and enjoy the show.

Ten Worst Insurance Companies

2008-12-10T09:18:00.004-06:00

It was recently brought to my attention that on July 9, 2008, The American Association for Justice (AAJ), an association of Trial Lawyers, offered its list of “The 10 Worst Insurance Companies.”

Allstate was selected as the worst insurance company in America. This is no surprise that a company that has been the subject of a book written by David J. Berardinelli. The title of his book is “From Good Hands To Boxing Gloves.” Originally released as a handbook for Personal Injury attorneys and now a hardcover book that documents Allstate’s claim handling process is a very interesting read in either version.

The complete ten were in order:

1. Allstate
2. Unum
3. AIG
4. State Farm
5. Conseco
6. WellPoint
7. Farmers
8. United Health
9. Torchmark
10. Liberty Mutual

Many will recognize several of these companies as relating to auto insurance while others represent health, life and disability insurance. We have heard for years what health insurance companies will do to us with regard to our bodies, so why would we ever be surprised by what they do to us with regard to our property?

The AAJ repeats one constant throughout its report. That one constant is industry wide greed. It reports financial wealth beyond what normal people could ever fathom while producing profits over policy holders rights. This industry uses a method of Deny, Delay and Defend.

This method has been exploited in From Good Hands to Boxing Gloves, as well as Vulture Culture: Dirty Deals, Unpaid Claims, and the Coming Collapse of the Insurance Industry a book by Eric D. Gerst. Further evidence has been the portrayal of insurance companies in movies such as Rainmaker and A Civil Action. Both movies were adapted from books, Rainmaker was written by John Grisham and A Civil Action by Jonathon Harr. Even a cartoon movie, The Incredibles, takes a shot at insurance company behavior when the hero works as an insurance adjuster and is reprimanded for paying claims.

What the AJJ doesn’t disclose is a Ten Best Insurance Company list. I am not certain that one exists. How about it readers, any suggestions as to who belongs on a 10 best or comments on the 10 worst list? Share positive or negative claim experiences.

To read the AJJ report: “The 10 Worst Insurance Companies.”

Certified Used Cars

2008-12-06T10:55:00.009-06:00

You think “I’m going to buy a Factory Certified Used Car so I don’t need to have it inspected by an independent inspector.” Not so fast. That Certified Used Car may have had a 100+ point inspection or something comparable, but it may not have a complete warranty.

It is fact that prior accident damage history, no matter how severe, will not eliminate it from “Certified” status. However, accident damage history will void the warranty were ever applicable. Meaning if the passenger’s fender was damaged and repaired, the factory paint and rust through warranty is void on the passenger’s fender. The more severe the damage the more of the “Certified” warranty is voided. If the repairs included replacement of the air conditioning condenser with an aftermarket condenser (editor’s note; an aftermarket part is a part made by someone other than the Original Equipment Manufacturer [OEM]) the entire air conditioning system is at risk. Likewise if the radiator is replaced with an aftermarket unit the cooling system in its entirety is at risk. The greater the amount of damage and repair a vehicle has sustained, the greater the risk of lost warranty.

Frame damage is not one of the points listed on the Factory checklists at last check.

Certified Used Cars are marketed as “almost as good as new.” As a result purchasers take that for granted, do not look closely enough at them and pay a premium for them, often higher than top dollar. However, when they have a prior collision damage/repair history that has not been disclosed, consumers are over paying. You should always have a professional inspect your potential purchase to protect your pocketbook and safety.

Additional information is available at MSN Money's article "Are Certified Autos Worth the cost?";

Body Shop Labor Rates

2008-11-30T10:12:00.003-06:00

As a consumer, what concern should body shop labor rates be to you? After all, collision repairs are very expensive and often the cost of the repair is paid for by an insurance company less any deductible that might be involved. Because of the importance of the safety involved in collision repair and the post repair value of the vehicle, it is an area that bears looking at.

If you have made a trip to the New Car Dealership recently you would find that the labor rates in the Service Department are $90 and up while a peak inside the Dealer’s Body Shop, if they even still have one, are below $50 an hour. How can a business under the same roof have such vastly different rates? Are the service rates unrealistically high? Are the real estate taxes less in one area than another? Are the costs of heating and electric less? Are the skill levels less? The answers to all of those questions is no. Then why is there such a large disparity in labor rates? The simple answer is insurance companies.

After an accident you may have taken or towed your car to a shop that you have experience with before you contact the insurance company. Then when you contact the company they may “suggest” using one of its repair shops. How strongly they make this suggestion varies from company to company. However, if you are persistent they will send an appraiser (read cost containment officer) to assess the damage. By this time a reputable repair shop will have already prepared a damage estimate for you. The repair shop’s estimate is actually required in the State of Illinois as a consumer protection under the Collision Repair Act.

Although your chosen repair shop has prepared a detailed repair estimate it is extremely rare that the insurance company representative would accept that or write one of its own that mirrors your professional’s opinion. But for today’s exercise we will only consider the labor rate. The insurance appraiser uses the labor rate approved by the insurance company.

When questioned by a claimant, every insurance company will parrot the same excuse, “we pay the prevailing labor rate in the area.” Who establishes this prevailing labor rate? Each individual insurance company does, that’s who. They do this by writing its own estimate and refusing to pay any rate above its chosen “prevailing rate.” If it is a true prevailing rate, then every company would pay the same rate. But they don’t. One company might pay $48, another $46 and others $44 or $42. Some sub standard insurers are still writing $22 to $24 and as recent as 2007 I saw one company write an estimate at $18 an hour. Clearly there is no such thing as a prevailing rate.

You may ask doesn't quality stand for something? Not to an insurance company. While they will say they want quality repairs what they really want are company profits and it doesn't matter who pays. And ultimately it is the vehicle owner who will pay. Controlled labor rates control the quality of repairs and ultimately the safety and value of the vehicle.

National Motor Vehicle Title Information System (NMVTIS)

2008-11-20T09:57:00.006-06:00

In 1992 Congress passed legislation for a comprehensive database of used vehicles that were stolen or so badly damaged that they were declared total losses. The Department of Justice (DOJ) has, by court order as a result of being sued by a consumer group, until March 31, 2009 to implement this long overdue system. The DOJ is currently taking comments regarding the implementation of that system with the current cutoff of midnight, Friday November 21, 2008. The following comments were filed by me on behalf of consumers benefit.

As one who inspects collision damaged vehicles for consumers before purchase, after purchase and after collision repairs, I can attest to the importance of thorough title information to the public being monumental in terms of the public’s safety and financial loss.

When a vehicle is declared a total loss by an insurance company, it means that a business decision has been made. Although a total loss does not necessarily equate with damage exceeding the value, it might as well. Most insurance carriers will “total” a vehicle at eighty percent (80%) of its retail value and send it to the auction. If 80% or better of the value is damage, how can a vehicle properly be repaired profitably? And that is a key for a consumer’s safety.

It was recently reported by Channel 10 News in San Diego, California, that 2.5 million cars are totaled by insurance companies every year and more than half are returned to the streets. Over 1.25 million totaled cars returned to the street, that fact is staggering.

Potentially, salvage value to an insurance company drops when a salvage vehicle exists, as it does to the salvage yard and potential salvage buyer/rebuilder. Kelly Blue Book estimates that a “Rebuilt” title alone makes a car lose thirty-three percent (33%) to fifty percent (50%) of its retail value. Quite obviously a vehicle with 80% damage cannot be properly repaired if its retail value will only be 75% in a best case scenario. This alone should indicate that corners will be cut in the repair of the salvage. Unfortunately these cuts are usually in areas that cannot be seen such as improper frame repairs rather than in cosmetic areas as that would be a give away as to the history of the vehicle.

That loss in value is circumvented when a totaled vehicle retains a clean title. What can occur, in some cases, is some insurance companies have sold vehicles with clean rather than salvage titles. This certainly helps the bottom line for those companies that do this. And I must stress that not all insurance companies are guilty of this, but cases of this have surfaced.

Another scenario has the salvage buyer take the car to a state where it can receive a clean title.

In some cases, even when a car has a branded rebuilt title when it is imported into a state, it is given a clean title. Part of that problem might be that even when the vehicle receives a rebuilt title it isn’t that clear on the title itself. When one is looking at a title a branding does not stand out that well on most states’ titles and it has to be looked at very carefully.

Consumers need a place to go where they can get accurate title information by Vehicle Identification Numbers (VIN) to protect their investments and safety.

To read the regulation or to post a comment:
http://www.regulations.gov/search/search_results.jsp?css=0&&Ntk=All&Ntx=mode+matchall&Ne=2+8+11+8053+8054+8098+8074+8066+8084+8055&N=0&Ntt=nmvtis&sid=11DBA3145300

To review the Channel 10 News video:
http://www.10news.com/news/1796008/detail.html#-

Ethics

2008-11-16T10:50:00.010-06:00

The 1963 Consent Decree is the product of the U.S. Attorney General's Office under the leadership of Robert F. Kennedy and is still in Full Force and Effect today. The 1963 Consent Decree can be read in its entirety at: http://www.ican2000.com/documents/1963/

My understanding of the 1963 Consent Decree is that nearly every known insurance company operating at the time (see note at end) which combined to account for “ Total direct premiums earned in the United States by all insurance companies in 1960 for automobile property insurance amounted to approximately $3,327,815,566” signed the decree.

Among other things, the insurers are accused of having formed an association in early 1940, the purpose of which was ultimately “intended to depress and control automobile material damage repair cost.”

While all of the intentions and means of the 1963 Consent Decree have interest and merit one sentence from one paragraph has captured my attention. Paragraph 16: “On March 12, 1942 the CCC passed a resolution which provided for the organization of Casualty Insurance Claim Managers’ Councils (hereinafter referred to as “Councils”) in various areas of the United States to act as sub-committees of and under the direction and control of the CCC, then known as the Joint Claims Committee."

Of concern to me is primarily the date of March 12, 1942 barely three months after the bombing of Pearl Harbor on December 7, 1941. How could an American Industry, as suggested by the list of companies that signed the Decree, be concerned with claims administration at our Country’s darkest moment? This was an industry that was concerned with personal profit in a time of crisis. Has anything changed?

The ethics established in the early 1940’s should be a caution to us all in how they deal with us in the contracts we have with them.

To see the list of companies that signed the 1963 Consent Decree go to the following linked page and go to the bottom of the page to acquire a Word or Text document. http://www.consentdecree.com/documents/documents.htm