Repair vs Total Loss (2009 Mazda 3 Hatchback Sport)

Posted: Thu Jun 20, 2013 01:07 pm Post Subject:

I would appreciate any suggestions regarding what I should do

Can I have my car evaluated by someone else and fight their estimate?

Should I just do the repairs and move on?

Posted: Thu Jun 20, 2013 06:17 pm Post Subject:

@tcope - thank you for the quick reply.

I spoke with my adjuster today and he said that they are now doing frame measurements at the shop to see if there was frame damage. Why did they wait until I pushed for a total loss to do that? Am I entitled to complain about this?

Re the ACV - I never specifically quoted $12,000 to him, however, I did say that I found a lower figure. Does that mean they will try to lower the ACV? I am very confused as to why they are taking so long.

Posted: Thu Jun 20, 2013 09:15 pm Post Subject:

I took my car to a body shop on Monday, AAA only got to it today

Why did they wait until I pushed for a total loss to do that? Am I entitled to complain about this?

I am very confused as to why they are taking so long.

Posted: Thu Jun 20, 2013 09:48 pm Post Subject:

@tcope - I should have added that I was told that the car would be appraised by Tuesday. Putting time aside, I am shocked that they only decided to do an inspection of the frame after their initial estimate because I demanded it. Mind you, one of the adjusters told me that he could tell if I had frame damage just by looking at photos because today's cars are no longer built with unibodies. Guess what, the shop informed me that my car indeed has a unibody frame.

With damages totaling to 50% or more of the vehicle, I have a genuine concern over the safety of the car as I should. Let's throw out the timing issue, which is not of concern to me. My concern is regarding the inaccurate information that is being provided to me and the lack of comprehensive inspection up front. It is not unreasonable to demand that my frame be inspected after a serious accident.

Posted: Thu Jun 20, 2013 09:52 pm Post Subject:

@tcope - One more thing, the only reason my car was even looked at in person was because I demanded it. These guys try to get away with whatever they can unless you fight back - that is just the nature of the insurance industry. I have friends who work as adjusters (unfortunately not AAA) and they all concur.

Posted: Fri Jun 21, 2013 12:00 am Post Subject:

I get the impression that you agreed to take it to an insurance preferred repair shop? If so, the shop is charged with inspecting the vehicle and sending that information to the insurance company. If the vehicle is repairable, the shop makes a profit off the repairs. If the vehicle is not repairable then the shop makes $0. Could be why this happened. Shop could give s figure that makes the vehicle repairable. Then once the repairs have started they go back to the carrier with a bent frame and get more time. By then the carrier has already paid for the repairs so they are kind of stuck. Just a guess, though.

So far, what are they "getting away" with?

Posted: Fri Jun 21, 2013 12:20 am Post Subject:

I have friends who work as adjusters (unfortunately not AAA) and they all concur.

Posted: Fri Jun 21, 2013 04:01 pm Post Subject: Advocating for blueprinting of damages

The collision industry would like to gravitate to a partial disassembly and blueprinting of repairs to expose all the damage so that a decision can be made to repair or total at the outset. As a collision shop owner, I work for the vehicle owner and not the insurer, so I create my own estimate and blueprint for repair. It is often sometimes twice as much as the insurer estimate as their initial estimate is visible damage only quotations. Insurers would prefer you use their network of shops as they work for the insurers primarily and not the vehicle owner. They report their findings and ask permission from the insurer while being graded against other network shops for saving the insurer money first by using salvage parts and generic parts.

I on the other hand, generally make my own determination whether a vehicle is a total loss or repairable based on my blueprinting and disassembly authorized by the vehicle owner. The vehicle owner may authorize the shop to perform these tasks as part of the repair process. The insurer has the contractual right to examine the damaged property and determine what they believe the amount of loss to be as they have the right to determine at the outset of the claim to 1. Pay for the loss in money (owner authorizes the repairs), 2. Take control of the vehicle assign the repair to a shop and assume all liability, or 3.Replace the damaged property with like, kind, and quality, or pay the actual cash value of the loss. Most insurers use cost containment strategies and interfere with body shops once they have decided to pay for the loss in money. Court cases routinely reveal that unless the insurer takes control of the repair and assigns the repair bearing all liability, they do not have the right to determine how the vehicle is repaired and with which kind of parts. It’s all about the risk. You can not pay for the loss in money and control the repair as that would be co-mingling of the insurance options which is what they have done by co-opting slave shops to repair based on the insurer preferences with the promise of steering more work to them for complying with the insurer’s wishes.

The courts say that the insurer must pay all reasonable costs or prove that the repairs are unnecessary or unreasonable (see Progressive vs Coccaro). It is not uncommon for insurers to total vehicles that do not meet the legal definition of a total loss when it beneifits them. Oftentimes, they may incur less severity or expenses by totaling the damaged property, and saving rental reimbursements and from the sell of lucrative salvage. Example: a vehicle value may be worth 20,000 and the repairs 10,000. The salvage may bring 12,000 at auction and the rental could be another 1000. If they totaled that vehicle, they would save 3000 on that claim less auction expenses. It is not uncommon to incur 20 to 30 percent more in supplemental damages on newer vehicles. The insurer has the fiduciary duty to make that decision which is best for their company, but once they make it, they should stay out of the repair process unless they wish to assume the risk in the repair.

Posted: Fri Jun 21, 2013 04:27 pm Post Subject:

Excellent post, Mike!

The insurer has the fiduciary duty to make that decision which is best for their company, but once they make it, they should stay out of the repair process unless they wish to assume the risk in the repair.

Posted: Fri Jun 21, 2013 06:59 pm Post Subject:

Unless the vehicle is a train wreck and or a questionable borderline total, the insurer should at the outset say which option they are taking and if they are not taking control themselves and authorizing the repairs, all they need to do is confirm coverage and let the owner authorize repairs to their selected shop and get out of the way so shops can do what they are licensed to legally do. I know the pattern that has existed in the past thirty years, but it is legally changing and many collision business owners are discovering what they are legally entitled to do.

How long is a reasonable time for an insurer to come to that decision. 99 percent of the time on first party claims they are not authorizing the repairs, the owners are. Seventyfive percent of the vehicles I repair, the insurer never physically inspects them even though they have the contractual right to do so. They take my estimates and audit them and propose a settlement or ask for an agreed price. If they are asking for an agreed price, I then ask are they taking the option to assume all risk and liability with your specified procedures and your sourced parts? Are you Mr or Ms Insurer going to authorize the repairs? They never will answer, so we proceed with repairs as we, who the courts have deemed to be the repair experts, and the insurer has the choice to pay or not. The shop can bill the vehicle owner and if they pay, then the insurer has a potential breach of contract issue in their laps if the shop repaired based on an estimate agreed to by the vehicle owner.

Many shops across the country including myself are taking assignments of proceeds or claims which are legal to do post loss. Court after court after court are awarding the shops with legal fees and underpayments that the insurer could not prove was unreasonable. Insurers do not want to open their books to discovery in most of these cases which would reveal possible price fixing and allocation of market share by coerced steering abuse. The tide is changing. Insurers are attempting in some states to change the law to their benefit so they can continue to cost contain and control an industry that they are not a party to simply because they indemnify policy holders and pay for third party losses. Today they bank on uninformed policyholder and third party claimants and steer them to shops that collude with them to possibly underpay many claims by ommitted repairs that are required by the manufacturer of the vehicle or procedures specifed by them as necessary to return a vehicle to the engineered pre-accident condition. Bout time! Why should the collision industry continue to subsidize insurers with discounted repairs to enable them to spend the ridiculous amounts they do on advertising to win new customers. Vehicle owners should have to pay the reasonable increases in premiums that are a reflection of the changing crude oil prices which affect refinish materials and steel which affects auto parts pricing. Or insurers should be happy with taking some of the invested money they make on using premium dollars to pay for their losses in their claims side of the ledger.

Okay, I'll get off my soap box for a few more months.