QuestionMy daughter was at work and her car was sitting in the parking lot unoccupied when a car hit it. It seems there was a large delivery truck turning in to make a delivery, which had to turn from the left lane to get in the small lot, when a car came up and veered off to avoid hitting the truck but hit my daughters parked and unoccupied car instead and then hit a brick wall. Witnesses stated that other vehicles behind the truck were stopped allowing the truck to turn, but the driver who hit my daughters car said the truck had no signal on. The police cited the driver of the car for following too closely and illegal lane change, but he is disputing responsibility for the accident. His insurance company refuses to accept liability, so now my daughter's insurance has picked up the car, totaled it, and is preparing a settlement, telling her the other two insurance companies will have to battle and her company will then bill the responsible party. What value should they use to settle? According to Kelly Blue Book on internet the following values are listed for her 1997 Toyota Corolla DX:
Private Party:
Exc. condition--$3,280
Good condition-- 2,905
Fair condition-- 2,455
Retail:
Exc. condition--$4,630 period.
No good or fair listing.
Her car had no known problems. It has 148,443 miles on it. A few minor blemishes only. Tires and a belt had been replaced not long ago. She has the car financed and still owes $3,000 on it. Also, she has a $500 deductible on her insurance. What should she accept and how can she not end up losing in this situation when she was only an innocent bystander? So far, she has been without a car for 5 days. Please, can you help us?
AnswerHi Rebecca,
Insurance companies do not use Kelly Blue Book or any other guide book values. The reason is that they are only a guide. The value of the car should be based on local comparable vehicles that are for sale, making adjustments for differences in mileage, options and condition. Following is the process:
The Total Loss Claim Process
Step 1: Determining the vehicle to be a Total Loss
When you are involved in a collision, you will report the claim to either to your own insurance company or the insurance company of another at-fault party. The insurance company will assign a damage estimator to inspect the damage and write a repair estimate. Once the estimate is written, the repair cost will be compared to the value of the vehicle. Generally, insurance companies will declare a vehicle to be a total loss if the cost of repairs is more than 70% to 80% of the vehicle's value.
Step 2: Doing Your Homework
If you have been informed that your vehicle is a total loss, the insurance company will then take usually a couple of days to determine the value they are going to offer you. During this time, you should do your own research to determine the fair market value of your vehicle. The easiest way to do this is by using the internet. You should check www.autotrader.com or www.cars.com. There you can search for currently for sale vehicle like yours, in your area. You should try to locate 5 to 10 vehicles of the same year, make & model, with similar options and mileage. Print out the listings you find and average the values. This will give you a good average value to use as a baseline. However, you must understand that the prices you find are asking prices and virtually all of those prices will be negotiated downward to some degree. Now when the insurance company makes you an offer you will know if it is within a reasonable range or not.
Step 3: Negotiating and Settling Your Claim
Now that you know what your vehicle is worth and what the insurance company is offering you, it is up to you to negotiate if the offer is not reasonable. You can start by sending the documentation you collected in step 2 above and making a demand of what you are seeking to settle the claim. If the insurance company does not properly negotiate with you then you may have to hire a professional vehicle appraiser to properly establish the value of your vehicle. If you are dealing with your own insurance company you can invoke the appraisal clause of your policy. This is a part of your policy that is there to help settle disputes in value between you and your insurance company.
The Appraisal Clause Process
1st party claims with your own insurance company
An appraisal clause is a clause or paragraph found in most but not all insurance policies. It is designed to be a way of reaching a settlement when there is a dispute over the amount of a loss between you and your insurance company and can be invoked by either party. The appraisal clause can be utilized when there is a dispute over the cost to repair your vehicle, the value of your vehicle in a total loss claim or the diminished value of your vehicle if you reside in a state where you can make a 1st party claim for diminished value. The appraisal clause is generally found in the "Damage to Your Auto" section of your policy. Following are the basic steps involved in the execution of the appraisal clause of most policies.
Step 1: Invoking Your Appraisal Clause
You will write a letter to your insurance company telling them that as a result of your inability to reach a mutually agreeable settlement, you are invoking the appraisal clause of your policy. The letter should be sent by certified mail/return receipt requested.
Step 2: Selection of Appraisers
In the appraisal clause process, each side will select a competent appraiser to assess the loss. Each side will be responsible for paying their chosen appraiser. You should select an appraiser who is knowledgeable in the specific area that is the subject of the dispute and who is familiar with the appraisal clause process. Your selected appraiser should be able to be objective and impartial. Your appraiser should not do any work for the insurance company with whom you are having the dispute.
Step 3: Completion of The Process
Your selected appraiser as well as the appraiser selected by your insurance company will each independently appraise the loss. The two appraiser will then communicate and discuss their findings. During this process the two appraisers will attempt to reach a mutually agreeable figure. If the two appraisers are unable to reach an agreement then the two appraisers will mutually select and agree upon a third party Umpire appraiser who will review the positions and documentation of the two primary appraisers and may also do an inspection and assessment of his own. If an umpire appraiser becomes necessary, you and your insurance company will each pay half of the cost of the umpire. Then an amount agreed upon by any two of the three appraisers will be final and binding on all parties.
If you decide to hire an appraiser to assist you in this matter, please visit www.collisionclaims.com .
I hope this helps
Richard Hixenbaugh
