Auto Insurance Claims: comprehensive coverage damage claim, certified mail, state regulator

Question
A friend of mine had his car totaled a couple of weeks ago in a roll over. I was in the accident also. The insurance company told him that they were going to give him a little over $3,700 for the car, so to replace the car, an 2002 Chevy which he kept full coverage on, he was able to purchase a 1999 auto for that amount told to him by  the insurance with a promise to give the car company he bought it from the check from the insurance company, done deal.  But today the insurance company called him and told him that they were only going to give him $800 for the 02 because in 07 they paid him $2,700 because the car was damaged by a deer, he repaired it and it was back on the road and he kept paying for full coverage for the car with a $100 deductable on the policy.  My question is can the insurance company turn around and tell him that after telling him he was going to get the first amount turn around and give him the lesser amount because they had already paid for the first damage?  The 02 was back on the road and the insurance company keep the policy with the full coverage with him.  He is really upset and does not know what or how to handle this problem with the insurance company.  What can he do?? He already has the replacement car.

Answer
Phil,

I would tell your friend to ask the insurance company how they were able to determine the loss in value they say his car lost be virtue of the collision damage. Have him send them a letter by certified mail with this request. An insurance company will take diminished value allowances when it can, although it is subject to state regulations with respect to claims settlement practices. Check with your state regulator or insurance department for more information.

Charlie