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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.
Showing posts with label total loss. Show all posts
Showing posts with label total loss. Show all posts
Monday, January 12, 2009
Thursday, November 20, 2008
National Motor Vehicle Title Information System (NMVTIS)
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#-
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#-
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