What To Do when your car is written off in an accident/theft and you are not sure the insurance company is being fair in their compensation offer:
For most of us, this set of circumstances is a once in a lifetime event so we feel at sea amongst the whirlwind of events. The insurance company knows all the rules, you are very new at it.
When the insurance company makes their offer, ask them to send you the report that explains how they came to the amount. This report is normally prepared for the insurance company by JD Power or AutoDatasource.
Read this report, it contains a lot of detail:
The description of your car/truck, all its options and its trim level.
It describes its condition, previous damage etc., and the mileage.
It lists comparable vehicles to yours in your geographic area.
It calculates asking prices, less a negotiating discount (normally 5%).
It calculates a positive or negative factor for the mileage showing on your vehicle.
Questions to ask yourself:
Is the vehicle that the insurance company is describing a correct version of your car?
Do they have the correct trim level, and the correct options?
Is their description of your car appropriate?
If they indicate that there was previous accident damage, is that appropriate?
Did the insurance company compare your vehicle to ones that have a similar amount of mileage? It’s not uncommon for the insurance company to use comparables that have much higher mileage.
If you believe they have used inappropriate comparables, there may be a phone number that you can call to check with the dealer that was advertising the vehicle, by calling them you may be able to clarify the situation.
If your vehicle is under 5 years old and you purchased it new, are they comparing your vehicle to ones being sold by a franchise dealer?
Is the type of transmission (manual or automatic) a factor in the market value of your car?
Did you purchase an extended warranty from the dealer or from a warranty specialty company when you purchased your car? Have you claimed a credit for the outstanding balance of the warranty remaining? Some franchise dealers do not offer this possibility, but it is worth asking. Some dealers offer credits in this regard if you purchased another vehicle from them.
Many people who contact us in regards to an insurance claim dispute misunderstand the process that is mandated by law. Once the insurance company makes you an offer, unless the amount is egregiously inappropriate, or they have made a factual error, the ball is now in your court to give them a second opinion on your behalf from a company like ours.
If a settlement cannot be accomplished after submitting a second opinion report, the next stage is to submit the two competing opinions to an umpire. The umpire is chosen from individuals submitted by you (the owner) and those preferred by the insurance company. We normally advise you on names of umpires prepared to undertake the case which will depend on if they have a conflict of interest.
LIPSTICK ON A PIG
Avoiding Life’s Lemons
Lipstick on a Pig features excerpts from the vast library of Maurice Bramhall’s experiences.