by tedhillis » Thu Jan 27, 2011 05:44 pm
I had a policy on my 2008 Grand Junction 5th Wheel which was destroyed in a fire on 1-17-2011. Now they are wanting to pay me 15k less than what I owe on it. When I purchased my policy I told them that I wanted to be covered for what I owed in the event the RV was destroyed in an accident. They asked me what I paid for the RV, and what I owed. I told them at the time I owed 69k and the policy I have says the limit of their libility is 69k. They are telling me that they will pay the appraised value of the RV, not what I owe on it. Do I have any recourse?
Posted: Thu Jan 27, 2011 09:46 pm Post Subject:
I'm afraid you might be out of luck. Had this fire occured within days after you took out the policy, you probably would have been ok. But what has happened is that the RV has depreciated in value faster than the principal of the loan has been paid off. companies only pay for the value at the time of the accident, not the value at the time of the sale.
Posted: Fri Jan 28, 2011 09:19 am Post Subject:
Although your coverage LIMIT was $69,000, the language of your contract probably uses the words "ACTUAL CASH VALUE" which could be far less than your insured limit of liability. Just because you have a specific amount of coverage, it does not mean that is the amount the insurance company pays. Auto insurance is an INDEMNITY contract, not a VALUED contract. It covers up to a specific limit, it does not pay a specific amount (not like life insurance that pays a specific amount when a person dies).
To protect yourself in the event of depreciation, there is GAP (Guaranteed Auto Protection) insurance coverage available to cover some/all of the shortfall between ACV and a loan balance. Without that, you are probably out of luck.
You need to discuss how they determined the ACV of the vehicle. There will be some room for negotiation there.
Posted: Fri Jan 28, 2011 12:39 pm Post Subject:
You should've read the policy terms carefully while signing up. It would also have been better for you to get your doubts clarified before hand.
Insurers may vary in their ways to determine the worth of a vehicle. So, you need to know how they arrived at the ACV of your vehicle.
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