Total Comments: 18
Posted: Sat Jun 14, 2014 02:02 pm Post Subject:
Actually, auto insurance has only been around since February, 1898, but whose counting?
Posted: Sat Jun 14, 2014 06:44 pm Post Subject: Overvalued car
Yes, the policy and the numerous endorsements and exclusions all control and for most insureds that requires the use of a lawyer to unravel the jargon and meaning if they really want to know what they are paying for. I would like to meet the genius who can read and understand the terms of their policy "in a moment".
I did not say over valuation is a scam, I merely suggested that insurers may have found a loophole in the state's consumer protection laws. But let's get real. Insurance companies still provide a very useful (and essential) service. Yet ultimately they are profit driven and those profits come from premiums they collect from those they insure and then limit, to the extent they legally can through exclusions and narrowly defined risks, payouts to settle claims.
Moreover, when they can lower their exposure to liabilities or risks through legislative or regulatory changes, they have teams of lawyers to help them do so. To see this, one need only research State Farm's aggressive campaign in state legislatures across the country to eliminate their first party liability for compensating their insureds for diminished value of damaged vehicles upon resale.
When these changes occurred, insureds received notice of the change, but the meaning was probably obscured by language along the lines of the following: "in section XXXX paragraph 2 is hereby eliminated and replaced with a new paragraph as printed below, provided however that the language in the new paragraph shall not affect in any way whatsoever the limitations of Section XYXY or the exclusions in Section YYYY". These piecemeal changes, often comprised of a series of insertions, deletions and references to other sections, can take a lot of time to understand. So it is disingenuous in the extreme to suggest that the terms of a policy can be understood in a "moment."
Given the above, it should come as no surprise that training materials of prospective agents say "Your first priority is to limit our company's liability. Consideration of the insured's loss is secondary." Ad slogans such as "you are in good hands or "like a good neighbor" are designed to make you think everything will be OK because you are covered if you have their insurance. But what is suggested in the ads is inconsistent with policies that have been designed to limit payouts. This is not to say insurance companies are not entitled to reasonable profits; without profits, they would not exist. It only means that most insurance consumers are getting less actual loss protection than they think they are.
I think this site is a way to help consumers understand these differences and become better informed about over valuation and dozens of other issues that can arise. Unfortunately that consumer understanding is made more difficult by "contributions" from insurance industry apologists making dissembling remarks.
Posted: Sun Jun 15, 2014 02:48 pm Post Subject:
Well, Brrrr, why not tell us how you really feel?
I am not here as an "apologist" for insurance companies, by any means. But I think you have too much emotional attachment to your claim. You make some valid observations, and you mischaracterize some things as well. Let me here, at the outset, say that 1) you have not told us what year, make, and model of vehicle is involved; 2) how much damage is in dispute between you and the insurance company; and 3) the real reason you want your vehicle totaled instead of repaired.
It is absolutely true that insurance companies are in business to make money. That's exactly what I have taught my students for more than 13 years. But the truth is that every company that exists in America is in business for the same reason. McDonald's sells fried dead cow parts to people, insurance companies provide contracts that offer certain protections.
McDonald's limits it loss potential through its menu -- serving only those items by which it can profit. Insurance companies are no different. You cannot get a hot dog at McDonald's and you cannot get 100% of your loss exposure covered by 100% of all insurance contracts.
McDonald's certainly doesn't sell the best hamburgers in the world, but some people are willing to pay for what they get. Personally, I don't buy anything at McDonald's, but I don't trash-talk them either. It's their business model, and they are entitled to it.
Insurance companies stay in business by paying claims. They guard their profits by not paying claims they are not contractually obligated to pay for. Although there is a great deal of "standardization" in property & casualty insurance contracts, no two insurance companies have identical contracts. Each company chooses what they will and will not cover. Each insured chooses his or her insurance company. When a person fails to read and understand his or her coverage, that's not entirely the insurance company's fault.
Even many attorneys don't read their own various insurance contracts. Some attorneys who do, don't understand what they read. That's not the insurance company's fault, either, but it can lead to a lot of litigation. And sometimes insurance company attorneys find out after a lot of litigation that the insurance company's understanding of its contract was wrong, too.
You also point to some unnamed training document that says, "Your first priority is to limit our company's liability. Consideration of the insured's loss is secondary." Does this shock you? It shouldn't. An insurance AGENT is the representative of the insurance company and brings the insurance company's products and services to consumers. As such, he or she absolutely has a responsibility to protect the insurance company's liability -- if agents did not do this, premiums would be on a runaway course.
If you want an insurance person to represent YOUR LIABILITY and LOSS EXPOSURE ahead of that of the insurance company, then you don't work with an agent, you work with a BROKER, who, by law, cannot be an agent of the insurance company. You tell the broker what you do and don't want in your insurance contract, and it's up to him or her to find that contract for you, if they can.
You probably cannot get an auto insurance contract from any insurance company that meets your requirements 100%. But not all contracts have the same language or exclusions. If the broker can't find one that matches your desire, they will find one that comes as close as possible, and explain what it doesn't cover and why not. Then you decide whether you will accept it or not.
No one is forcing you to buy insurance. Even state laws that demand financial responsibility or make it seem that you cannot drive without insurance, allow a person to post a liability bond to cover a minimum amount of negligence.
But your complaint has nothing to do with that. It's about your property and damage done to it. And in that, you are criticizing the Fair Claims Settlement Practices Act, and this, I think, is where your emotions are running high. I haven't exactly figured out whether yours is a first-party or third-party loss, but I suspect it's the former. You wrote
By not totaling a damaged car, the insurer pays only the cost of the repair and not the (higher) lost value of the car.
Take a closer look at some of the posts on this forum and you will more complaints about vehicles being totaled by owners who believe the vehicles are not and that the insurance company is taking the "easy way out" when it comes to handling their loss. And you will also see a number of examples where the insurance company chose to repair a vehicle, and discovers later that it made a dreadfully wrong decision and the repairs ended up costing far more than they would have paid by totaling the vehicle to begin with.
Your auto insurance contract does not have "numerous endorsements and exclusions" -- but it certainly has some . . . all do . . . some more than others, which is why a person needs to READ THE CONTRACT before deciding to keep it. The problem with auto insurance in particular is that most people are only interested in the price, not the coverage. I try to show clients that the coverage may be more important than the price.
If you believe that the insurance company involved in your loss is not being fair in its evaluation of that loss, you have plenty of recourse. How you choose to act is up to you.
The least costly, but also perhaps the least effective these days due to budget constraints, is filing a complaint with the state Dept of Insurance alleging violation(s) of the FCSPA. If there are genuine violations, they will act accordingly. Most of the time, however, there are none.
You can hire a PUBLIC ADJUSTER to represent your interest in the claim with the insurance company. For that, you will pay about 10% of the eventual recovery, which could leave you no better off than where you are today. The adjuster would have to get you at least 12% more than what the insurance company is offering today to make any sense out of pursuing this option.
You can try to work with the insurance company on your own to increase the value of your loss. If you turn this into an adversarial thing, it could easily require a lot more effort on your part than you are willing to commit, and possibly the assistance of an auto body repair mechanic to document damage and repair costs. What is your time worth?
And, finally, you can hire an attorney to litigate your matter, which is unlikely if all you're talking about is a couple of thousand dollars of difference in property damage estimates. The hundreds of dollars per hour the attorney will charge will quickly erode what money you might get.
I don't see any evidence of "bad faith" on the part of your insurance company in your posts. I see something very different. I see someone who today owns an auto they no longer want, and are looking for an insurance company to help them get rid of it. That's not what your insurance is designed or intended to do. Not in the least.
The principle is known as INDEMNITY -- which means to restore a person in whole or in part to the condition that existed the moment prior to the loss, but without profit or gain.
The moment prior to the loss, you owned a vehicle which some time ago you had lost the emotional attachment to that you once had. Now, you feel victimized by the insurance company that won't "take it off your hands". Read your contract . . . nowhere will you find a statement that says, "If at any time during the term of this contract you no longer wish to keep the insured vehicle, we will buy it from you, working or not."
You have an insurance company that is willing to pay to repair your vehicle, but that's not what YOU want. Well, this is not Burger King either, and you cannot have it your way. If you really don't want the vehicle after it's repaired, fine . . . SELL IT to someone. If you cannot get what you believe it is worth, then, possibly, you can file a diminished value claim for the difference.
You have an insurance contract that PROTECTS YOU from the insurance company dealing with your loss in an arbitrary manner. YOU have to know what it does for you and what it doesn't do. So far, you haven't written anything that leads me to believe that the insurance company is doing anything other than what it contracted with you to do.
I think you're just upset that this is the case, and you wanted something else to happen. I can sympathize with that, but I cannot fault the insurance company for choosing to honor its contract with you either.
Posted: Mon Jun 16, 2014 12:30 am Post Subject: Over valuation
Maxherr, you draw some interesting conclusions for a post not made in response to your post. You assign motives that do not exist and make comments about my emotional state; yet don't refute much of anything I said. I agree that my circumstance seems backwards to the typical situation where insurers are accused of under valuing. And I am not complaining about my insurer making a profit. I am merely not happy that my insurer is being dishonest in the way they value my damaged car. It is more a matter of principal than money. Other than that, meh. This dialog is of no benefit to me.
Posted: Mon Jun 16, 2014 01:05 am Post Subject:
I am merely not happy that my insurer is being dishonest in the way they value my damaged car.How is it dishonest?
When it comes to the amount payable for vehicle damage the policy is clear and states it very simply. It states something to the affect of, we will pay the less of the market value or the repair cost.
Consumer Protection laws not Bad Faith laws are relevant.
Given the above, it should come as no surprise that training materials of prospective agents say "Your first priority is to limit our company's liability.Can you provide a link or scan of these "training materials"? I suspect even if they existed that you are using it out of context. An agent does need to look out for the liability of the insurance company. However, this could apply in many ways. An agent has _NOTHING_ to do with how the damage to a vehicle is addressed.
Posted: Mon Jun 16, 2014 01:12 pm Post Subject:
This dialog is of no benefit to me.A very common response when a person doesn't get the answer that HE wanted.
I am merely not happy that my insurer is being dishonest in the way they value my damaged car.Then post some FACTS about this. Being "unhappy" is an emotional state. We are not here to make you happy, but to help you understand the process. Without FACTS we cannot provide much in the way of help. What facts have you provided?
I haven't seen any. The only statement that remotely comes close is the very first one you made: This is happening to me. By not totaling a damaged car, the insurer pays only the cost of the repair and not the (higher) lost value of the car. You're the one who tacked a new post onto one that was almost a year old. I don't see anything that makes your situation the same as that one.
How are we to know what the damage is or what the value of the vehicle is. Who, but you, says the vehicle is of lesser value than the damage. You make absolutely no mention of vehicle type, year, make, model, mileage, damage, etc. What more do you want from this discussion based on the lack of evidence to support your belief that the insurance company has not done a good job in handling your claim? You haven't even posted the amount of the estimated damage that you dispute and how that relates to the vehicle's value, yet you point in the direction of dishonesty on the part of your insurance company. At least you did confirm that this is a first-party loss, in so many words.
What prevents you from being a little more open about your loss?
As I said, all of the rest of your comments are "emotional" and not "factual." Insurance claims are based on facts. Juries award damages based on emotions -- if the facts support a verdict. No facts, no verdict. I'm not here to defend the insurance company, but I haven't seen any evidence that the insurance company has been dishonest. Change my mind.
Posted: Fri Jul 25, 2014 01:26 pm Post Subject: Glad I'm not the only one
I'm going through this issue right now. My 2008 Civic was hit. The repair estimate is $3600 the KBB value of the car is $4500, but the NADA value is $8900. I'm baffled by that number because there is no way a 2008 Civic with 172,000 miles, other body damage unrelated to this accident, and broken a/c is worth almost $9000. Carmax offered to buy it with accident damage for $1000 and a Nissan dealer offered $2500 in current condition. I'm annoyed at the overvaluing of the vehicle. They are valuing the car as "like new" condition which is crazy.
Posted: Fri Jul 25, 2014 02:44 pm Post Subject:
What is it that you really want? A car repaired according to the terms of your contract or money to buy a new car? You can have the former -- that's what you paid for..