You’ve got MOUNTAINS of questions!
We went on an expedition to get you answers!
We have tackled all of the tough insurance claims faqs and posted them here. You can find info on diminished value, total losses, public adjusters, injury claims, demand letters and more to make an informed decision when dealing with your insurance claim after an auto accident.
Take a look around or take a shortcut and request a free claim consultation!
Public Adjusting Pros And Cons
To answer that, sometimes it can be, but sometimes it can be very beneficial.
Here are a few tips about public adjusters in general.
1. Make sure you have a valid first party claim (a claim against your company, and not another’s).
A public adjuster represents policy holders against their own insurance company only. They are supposed to be highly trained and in most States, they are required to be licensed, although in some States acting as a public adjuster is illegal. The main benefit to having a public adjuster is that they will do the legwork and negotiation for you, and they will make sure you obtain the maximum benefit your policy provides.
2. Evaluate the potential value of your claim.
The cost of using a public adjuster varies, but if you have a good and ethical one the cost should be worth the benefit. If you have a claim that is valued at less than $5000.00, then the adjuster should be ethical enough to explain the potential loss you would incur by paying for public adjusting services. Most public adjusters charge around 10% of the claim value, so a $5000.00 claim would cost you approximately $500.00. If the adjuster can’t increase your claim value by at least his or her fee, then it is only logical to assume the service they provide is not worth the fee.
3. Read up on the law regarding public adjusters in your State.
If a license is required, make sure you check to see if the adjuster is properly licensed.
4. Ask to see the adjuster or firm’s liability insurance policy or a copy of a liability bond.
If they don’t have one or the other, run.
5. Use your head.
If the adjuster or firm won’t answer your questions over the phone, or they have solicited you, then think again. A good public adjuster builds his or her business on word of mouth, and not by monitoring catastrophe’s and soliciting victims of property damage.
6. Public adjusters cannot represent anybody for an injury claim, and they are not supposed to refer you to an attorney.
Hopefully these tips will help you find out if you need a public adjuster and how to hire a reputable one!
How To Deal With Your Claim After An Auto Accident
Most of us will be involved in an auto accident within our lifetimes.
This means that we are likely to have a claim with an insurance company, either our own insurance company or someone else’s insurance company. After nearly 15 years of experience in the field of insurance (most as a claims adjuster), I have come to realize that the majority of the public just doesn’t get it (the claims process, that is).
Additionally, I also believe that the majority of auto claims adjusters don’t get it. When I first began to speak with people about insurance claims nearly 15 years ago, the problem was not so apparent, but as more attorneys and less experienced adjusters come on the market, claimants get fed a lot of misinformation.
Do this for me: Search the internet for auto accident claims help or some similar string of search words. You will quickly become confused on how to best approach getting a fair settlement on your insurance claim.
So How Do You Get Started With An Auto Insurance Claim?
In my own opinion, the best approach is the simplest approach when dealing with claims. As the title of this article indicates, critical thinking is the key to a successful insurance claim negotiation. As an adjuster who has handled almost every type of claim imaginable, I will attempt to give some pointers on critical thinking that we should all remember when we are dealing with a claim, adjusters and claimants alike.
- Never assume anything
- Listen hard
- Keep notes
- Research on your own
- Remember that what you believe is true is always an opinion
- Don’t settle unless you understand why you are settling (aka: ask direct questions)
During a claim negotiation, I find that sticking to these six rules almost always creates the best platform for getting what you want, a fair settlement. The problem arises when one party isn’t aware of the rules….funny but true. The good news is that if you stick to the rules, sooner or later the use of them will result in a good settlement.
Below I have provided an example of each of the 6 rules I have listed so you can better visualize how the rules work. The obstacles can be overcome with a proper understanding of the rules.
Don’t assume that because a person does not know their own phone number, that they are not intelligent. They may just be logical. Einstein did not know his own telephone number, and when asked why, he basically said that he just never needed to call himself.
That man’s father is my father’s son. Is that possible? Who is that man? (it may not be the way you would say it, but can you figure out who that man is?) Break it down on paper, but make sure you listened correctly and write down the problem correctly.
When did you first speak with your adjuster? What did he/she ask you to provide? Without notes, you may not recall and this could delay your claim.
My chocolate cookies are sweet. Do you believe me? What if I used bakers chocolate? Taste the cookies for yourself, don’t take anybody else’s word except your own, including written words. Test any alleged factual statement on your own ground by reading multiple opinions on the fact/statement and formulating your own unique understanding of the opinions. Facts are simply what the majority of people believe at any certain point in time, and many facts have been overturned by critical thinkers (remember when the Earth was flat? Do you believe that the Earth is round?)
See number four, hehe. Really though, there are not really any cold hard facts. Think about this statement: “Something is only impossible until somebody does it.” Everything is an opinion, you will have to come to grips with this and be satisfied with the opinion that has the best evidence with it.
6. Be satisfied
Yeah, I know you make $40K per year, so with three days of missed work for going to the doctor, I will pay you $80.00 per day. You should understand the calculation, so ask how the $80.00 was calculated, in writing, and then study it. If you can’t get it in writing, ask for the formula until you have it properly written down and then study it. If there is not a good reason or a proper calculation, I would not be satisfied.
What Holds You Back
Here are some obstacles you will surely run into (just try not to be the one creating the obstacle):
- Unsubstantiated opinions
- Bad research or advice (also known as ignorance)
- Apathy towards the opposition’s goals
The above obstacles are just the first to come to my mind when I think about those hard claims negotiations I have had, and for sure there are many more. Since insurance claims can be complicated, I will not provide a claim scenario (I think it would just generate questions). No two claims will be exactly alike, and therefore the method to a successful resolution will be slightly different.
Okay, I guess that is the best I can do! Critical thinking and negotiation is an art – keep a list of the rules in front of you if find yourself needing to negotiate for anything. Sometimes just having them available will help you to stick to them, even if you never look at them.
To conclude, I will leave you with this “fact” about the claims process so you can “get it”:
If the right information is available to both the adjuster and the person filing a claim, then every claim will be settled fairly. It is your responsibility as either the adjuster or the person filing the claim to make sure the right information is available.
Advice On Insurance Claims And Auto Accidents
This article is based on my 15 years of claims adjusting experience. I have developed a simple little formula that will help you decide if you need an attorney or not.
Keep in mind, this quiz is tailored for auto accidents only, and I make no warranties or guarantees that your result is a foolproof answer. Ultimately, the only person that can decide if you need an attorney is you. With that being said, simply answer the following 15 questions and then add up your answers.
All of these questions are yes or no questions. Whatever answer you have the most of is your answer to the title of this article.
- Is your automobile newer than a 2005 model?
- Is your vehicle one of the following – a Lexus, BMW, Mercedes or Audi?
- Are you younger than 35 years old?
- Did you take an ambulance to the emergency room from the scene of the accident?
- Were there any witnesses (other than your passengers, friends or family members) that saw the accident occur?
- Was the accident someone else’s fault?
- Were there more than two vehicles involved in the accident?
- Did you or any of your passengers bleed as a result of the accident?
- Have you had 2 or less auto accidents in your lifetime?
- Have you already filed a claim and spoken with an insurance adjuster?
- Did you lose any time from work as a result of the accident?
- Do you believe that staff adjusters at an insurance company are paid to settle claims for as low of an amount as possible?
- If you suffered $5000.00 in damages to your vehicle, didn’t take an ambulance, but did incur over $2000.00 at a chiropractor’s office, do you believe your total claim is worth at least $10000.00?
- Do you agree that it is true when a vehicle sustains damages to its frame that it should be totaled?
- Do you agree that even a low speed rear-end impact can cause a low back disc herniation?
I hope you wrote your answers down! If you didn’t, go back and write them down this time! (hehe) Now, just add up the yes’s and the no’s. Whichever answer has the highest number is the answer to the question “Do I need an Attorney?”.
Good luck with your claim!
Collision Repair After An Auto Accident
7 Things You Need To Know About Car Accident Repair Costs & Auto Body Repair Estimates
In nearly 15 years as an adjuster I have seen some doozies when it comes to collision repair.
As a short example, let me tell you this . . .
When I was an adjuster, I caught a body shop and a rental car company conspiring to defraud the insurance company.
What they did was this:
The rental company would file a claim for undercarriage damage, and we would inspect the vehicle, find the damages, write the estimate for the collision repair and pay the body shop for the repairs.
What I figured out is that instead of the damages happening like the rental company said (like a renter hit a curb, or hit some debris in the road), it was being caused by the body shop.
The shop would have their technician put the car on a lift and then he would get under it with a sledge hammer and damage the oil pan or some other component, then they would give the car back to the rental company and they would file the claim. We would pay the shop to replace the damaged component, but they would just go in and repair the component and pocket the money for the parts that we paid them. They sometimes made $400.00 or $500.00 on one scam by just faking invoices for parts that they had damaged to begin with. They would then repair the part or replace it with one they had lying around and pocket the insurance money.
Not all shops are crooks, but body shops, like any other business, are in business to make money. Most people are not experts on collision repair, and body shops know this. Taking your car to a body shop is sort of like going to the doctor or hiring an attorney. You kind of have to trust what the doctor or lawyer says because they are specially trained. It is the same for a body shop, you kind of have to trust what they tell you because they are specially trained.
If you’re cool with trusting a collision repair facility, then fine, go find another article to read. But if you are like me, you want to learn how to avoid having to trust a body shop (the concept could apply to doctors and lawyers, too).
Try to avoid using a shop if:
1. You were referred to the shop by an insurance company
- The shop has an agreement with the insurance company, and if you are able to get a copy of the agreement between the shop and the insurance company, you are impressive.
- The insurance company has a vested interest in making sure repairs are as cheap as possible.
- Questions that would normally be directed to the vehicle owner, like “should we fix this wiring while we’re at it?”, or “hey, did this happen in the accident?” will be directed to the insurance company and not the customer. The owner is left out of the loop.
2. The shop is dirty or unorganized
I know that sounds obvious, but a lot of people just overlook that aspect because they think repairing vehicle damages is a dirty job. It’s not, a good shop will be clean and organized. Dirty and unorganized implies to me that the shop is used to cutting corners to save money.
Dealing With The Shop
Okay, so the above two things are things to watch out for if you haven’t picked a shop.
What? You say your vehicle is already at a body repair shop that the insurance company referred you to?
Here are some things that you can do that will help you keep the shop honest:
1. Ask the shop manager to provide you with a copy of all the invoices for parts they had to purchase to fix your car, and then compare the parts list with the cost listed on the insurance company’s collision repair estimate.
2. Ask the shop for a written repair guarantee.
3. Ask the shop if they are a direct repair facility for more than one insurance company (just asking this will make them think twice about cutting a corner at your expense). If they are, ask them for the list.
4. Bluntly ask if they have used new Original Equipment Manufacturer Parts (OEM), used OEM parts, or aftermarket parts.
5. Ask the shop to explain “betterment” to you, just because you are curious. This is just to show them that you are reading up on the repair process.
If you picked a dirty and unorganized shop, well, that was silly :), but you could still use the 5 tips above to help keep them honest.
In conclusion, be curious. Force yourself into the loop. A customer who is actively asking questions and is curious about what is going on will help to keep the shop on their toes. If you still think the shop is not treating you right, get a professional involved to check out the repairs after they are complete and tell you if the repair is sufficient. A good shop should be able to repair your vehicle back to within the original factory specifications.
Car Accidents: 3rd Party Insurance Claims For Auto Accidents & Myths About Insurance Adjusters
If the at fault party has liability insurance, then when you file a claim with their insurance company you have a 3rd party claim.
I have read quite a few articles that give a lot of bad information about adjusters. The thing I have noticed most about those articles is that none of them were written by an insurance adjuster! I’d be willing to bet that if you have not been an insurance adjuster, then you believe they are almost as bad as used car salesmen or attorneys, hehe. It is a common view.
What Is The Norm?
I can’t speak for every single insurance claims office out there, but I can say that I have worked for 5 different non-standard companies as an adjuster, and I have worked on contract for many standard companies as a recovery specialist with a firm.
I have never been instructed to deny any valid claim, nor have I been advised to “low-ball” claimants. This might happen at some companies, but it is definitely not the norm.
Insurance adjusters (if they care about their license) will usually try very hard to fairly resolve claims. I will say that I have definitely dealt with some companies that have some “questionable” practices. I won’t name names, but some of these companies simply attempt to cut costs by hiring inexperienced adjusters and giving them a “rule-book”. It is the inexperience of the adjuster in interpreting the “rules” that causes the majority of the issues.
One common unwritten rule at these companies is “deny claims with conflicting statements”. An adjuster that doesn’t understand when they can and when they can’t deny a claim makes it very frustrating for a claimant to successfully negotiate a fair settlement. In my opinion, adjusting takes an inordinate amount of common sense, but the test to get a license (at least in Texas) doesn’t really test for common sense. An adjuster can know all the rules and still be a really crappy adjuster. Believe me, I have dealt with some adjusters that give a terrible name to the profession. I’m not trying to defend those adjusters. I have heard conversations between inexperienced adjusters and claimants, and it is appalling. I have overheard adjusters just confidently misinform claimants of their rights, or confidently base their coverage or liability decision on misinformation, or just poor investigation.
Just realize that is not the norm.
Common Sense and How To Use It To Resolve Your Insurance Claims Issues
With that previous rant off my chest, let me tell you a practice that falls into that category of having a “no common sense” adjuster and that is (in my opinion) unethical and inappropriate. The main scenario that causes a claimant to be “screwed” is when the damages are not very severe. For example, let’s say you were rear-ended, but since you are a good person, you are not claiming any injury even though you may be sore for a while and could possibly incur some therapy bills.
Now let’s also assume that coverage has been accepted. Since you are such a good person, you didn’t call the police so there’s no police report. Now it is up to the other person (let’s say they are an unlicensed 15 year old kid) to admit that the accident was their fault, or, in the alternative, it is up to the insurance adjuster to make a judgment call (based on common sense) on whose fault the accident was.
Seems simple, right?
You were rear-ended, you have damages to the rear of your vehicle and the other person has damages to the front of their vehicle. It should be clear, right? Well, let’s add a common twist that I saw all the time. The kid lies.
First of all, he/she wasn’t supposed to be driving the vehicle. Next, they had a few friends with them (that’s why they rear-ended you, they were distracted), and they weren’t supposed to be hanging with friends on a school night. So instead of just telling the truth and saying they rear-ended you, they try to avoid further “trouble” at home and they lie and say that you had pulled out into the intersection a little and then backed up into them. At least the accident wasn’t their fault (I have heard it before, really).
When the adjuster calls you and tells you this, you can’t believe it!
The adjuster has three options:
- Believe the kid
- Believe you
- Just pay for your damages
What do you think will happen?
I’ll tell you.
If the adjuster is inexperienced and has a supervisor or manager that is immoral, they will deny your claim based on conflicting statements. This is a perfectly valid denial that they can get away with. They can play dumb and try and act like they really can’t tell whose fault it is. It’s valid because there is not any evidence to support either side of the story. It is word against word. They will deny the claim saying that they can’t determine liability.
Now surely if you filed suit, they would pay the claim because, I mean, come on….what jury is going to believe a 15 year-old who says they got backed into at an intersection? Especially if they had three other 15 year-olds in the car with them? The problem is that your damages are only $1200.00, and it is going to cost you to file suit.
So what can you do?
If you are really sharp, you could use a small claims court to force the matter, but even the rules for small claims can be complicated, so most people end up just getting mad and bad mouthing the insurance company (rightfully so in my opinion).
The insurance company counts on this type of issue.
They play the numbers game.
Quite a few companies (even the big ones) take this approach. They have inexperienced adjusters who don’t think for themselves, and just ask the manager what to do. Once they have been told to handle it that way once, they just think that is how it works. Nobody ever seems to figure this out until they have been in the business a while. A manager is not going to explain it like I just did – they will just say “Well, deny the claim, you can’t tell whose fault it was!”. The adjuster is none the wiser. The manager knows they will pay if a suit is filed, but what the manager knows is that most people will give up and not fight because they don’t know how and the claim is not worth enough for an attorney to take the case.
In this case, the insurance company wins! They can deny these types of claims because they have inexperienced adjusters to thwart off common sense and they won’t make that judgment call to pay the claim.
Fight Or Be Taken Advantage Of
Here’s the cold hard fact: If you don’t fight, you will get taken advantage of. You can avoid this type of issue if you know what evidence to secure at the scene, but how many of us are claims specialists and think to get a written statement from the kid at the scene?
You as the claimant have to learn how to fight for yourself when the claim is a small amount (say under $7500.00). I tell you, I never did this to people when I was handling 3rd party insurance claims. I used my head and I paid the claim because common sense told me the accident was the fault of the 15 year-old. I have always thought for myself. The story of someone backing into somebody at an intersection doesn’t hold much water for me unless there is some really good evidence or a witness that can confirm the story.
If you find yourself in this situation, you have a choice to make.
You can either accept the denial, or you can fight until you are blue in the face for what is right! If more people utilized the small claims court system, some of these “questionable” practices would be less profitable and we would all see a little higher quality adjuster on the front lines so that those judgment calls could be made with some common sense. It is up to the adjuster to decide if you are serious about suing or not, and if they don’t believe you have what it takes to get your money, then you will get a denial. Period.
Don’t forget about filing a diminished value claim when making your 3rd party insurance claim – it is owed to you and companies like ours help consumers recover every day!
In my line of business, I get this question all of the time. So much so, that I decided to write this article to help answer some of the questions about this apparent enigma.
First of all, there is no magic formula for determining if, when, and how much your insurance rate will increase following an accident. In fact, some companies are offering a “free pass” for certain types of insurance claims.
The bottom line on this subject is this: If you report a claim to any insurance company, it is likely to show up on your official track record or claims history.
Most insurance companies report claims information to ISO (Insurance Services Office). If a claim has been reported to this massive database, then you can be sure that your insurer will have access to the information it contains.
Okay, now to answer the article title question.
Insurance rates are adjusted based upon an actuarial formula. Normally, the title of a person that evaluates risk and determines appropriate rates is called an actuarial risk analyst. This person researches so many factors it is not even funny. After the actuary has pinned down the factors on which the company will evaluate risk (ie, accident history, age, location, vehicle type, employment status, credit history, family size, number of drivers, etc), then the actuary will create a formula that reflects the appropriate charge for each “class” of insured party. The formula is normally incorporated into an underwriting system. If any of your factors change, then it will be updated in the underwriting system and could possibly affect your rate. Many times, the formula allows for certain types of claims to be excluded, and underwriting policies can also affect how the actual rate is charged.
The only way an accident victim can determine if, when and how much their rate will change is to actually contact their insurance company’s underwriting supervisor and directly inquire. Most insurance companies categorize claim types by a point system, and then they base premium charges on the amount of points a person may have.
For example, at-fault claims that cost more than $1500.00 may be assigned two points, and the insurance company may assign a rate increase for every two points. So if you have one accident that is your fault and you caused over $1500.00 in damages, then you will move up on the “risky meter” one notch.
Contact your insurance company directly and ask for the underwriting supervisor, that person should be able to tell you what to expect on your insurance bill following an accident.
A Job Description And The Basic Adjusting Procedures
I’ve written this article to give the layman some basic information as it regards the claims adjusting process.
What does an insurance Adjuster Do, really?
First let us define the main two types of claims that we will be dealing with, first party claims, and third party claims.
A first party claim means that the insurance policy which is supposed to cover the claim is the policy of the person making the claim. If you are getting paid by your insurance company, then you have a first party claim.
In third party claims, the insurance policy which is supposed to cover the claim is the policy of the person that caused the claim. So if you are getting paid by someone else’s insurance company, you have a third party claim.
It gets a little more complicated when you get into workers compensation claims and healthcare claims, but for this article we’ll stick with private property damage claims. Let me also say that there may be multiple adjusters assigned to any one claim depending on the scope of the claim, so the following rules apply to the claims adjusting process in general.
First party claims:
1. Coverage determination
The insurance adjuster must first determine whether or not there is a valid policy. This may seem simple, but there are many factors that can affect coverage. If the policy is an auto policy, there may be excluded drivers on the policy, or the vehicle may be a work vehicle, or the policy may be a brand new policy and there are questions as to the time that payment was made. The adjuster will have to gather driver information, the date and time of the policy inception, and numerous other factors that could potentially affect the coverage on the policy. As the claim progresses, if new information is obtained that could affect the coverage, the adjuster should put the claim on hold until the coverage question is resolved.
2. Damage assessment
After coverage is confirmed, the insurance adjuster will have to figure out how much damage there is.Normally, there is an adjuster (the guy behind the desk), and an appraiser (the guy that goes and takes pictures of damages and writes an estimate).
To determine vehicle damages, an appraiser will most likely use a software program that allows him/her to punch in information about damages. After the appraiser has listed the type of property and the elements of the property that are damaged, the software will generate a dollar amount reflective of the cost to repair the damages. The software that an appraiser uses is very sophisticated and incorporates the “going rate” for labor and also houses a database of parts supplies, both new and used parts. The software that is available on the market today is very effective at determining the amount of labor needed and automatically finding the cheapest parts available.
After the adjuster has a damage report, he/she will have to determine if it is acceptable and then issue the appropriate payment. On first party claims, there is almost always a deductible, so provided the estimated damages are in line with what the policy covers, the adjuster will simply request a payment for the damages minus the deductible amount and will send the payment to the owner of the property or the policy holder if they are the same party.
4. Supplemental issues
After the damage payment has been issued, the claim should be complete, but many times the damages that are reflected in the repair estimate are not completely accurate. When the property is being repaired, the cost begins to increase due to items that were not on the estimate, or other issues such as weather related delays (when Houston flooded, many collision repair facilities were without power for a while) which may increase the time needed for repair.
If there are additional costs that are covered by the insurance policy, then those will have to be addressed as well. One of these additional costs could be rental car coverage, or in the case of a homeowner’s claim there could be temporary cost of living expenses that have to be adjusted. In any event, the final stage of any first party claim is the supplemental stage where the adjuster confirms the claim is complete or completes the adjustment of the claim by the supplemental charges.
Another item to note is that if a supplement arises due to a repair facility stating that there are more damages than are on the estimate, it is likely that the adjuster will send the appraiser back out to inspect the property and this can take from hours to days, so just be prepared for some delays if you are not using a facility that works with your insurance company all the time.
Insurance companies do not trust anyone, hehe.
Third Party Claims
1. Coverage determination
This first step is always the same. If there is not a valid policy the adjuster can just close the claim down right off the bat, so the first step is always to gather the appropriate facts surrounding the claim to determine the five “w’s”, you know, who, what, when, where and why, except that why is usually replaced with how.
2. Liability assessment
So remember we are talking about someone else’s insurance policy that is paying you, and therefore this extra step is involved. Liability can be terribly complex and many times the insurance company will have a little more experienced adjuster handling claims that involve liability. In simple terms, liability just means “who is at fault”. The adjuster will have to review the facts of the claim and interview all the parties to the claim as well as witnesses. Additionally, depending on the complexity of the claim scenario, the adjuster may have to get specialty reports such as a cause and origin report, or complete a scene investigation, or any number of other factors that could affect “who is at fault”.
3. Damage assessment
This is the same as in first party claims with one big exception…fault!
The adjuster not only has to determine the damage that is visible, they also have to figure out any other related costs or “intangible” damages that have occurred as a result of the “negligence” or “fault” of their policy holder. This can be complicated if injuries exist, and even more complicated depending on the severity of the injuries and even the location where the accident occurred. What most adjusters won’t say is that there are different views in different areas of the country and depending on what area an accident occurred in, some of the damages that can’t be documented (like pain and suffering or mental anguish) will have a substantially different value.
For example, in New Orleans Parish, LA, it is customary to pay auto accident victims large amounts of money for pain and suffering and mental anguish even if the accident wasn’t that bad and there is not much documentation to show the person incurred an injury. In the alternative, in Dallas County, TX it is much more conservative and if there is a minor injury, there is not going to be a large pain and suffering and mental anguish award.
4. Payment and supplements
The processes are the same on third party claims as they are on first party claims when it comes to making payments. Adjusters have monitor repairs and make sure all the related damages are paid for. On a third party claim, one can expect a little more scrutiny when it comes to supplemental payments. The adjuster on a third party claim will review very closely whether or not any additional damage is actually related to the accident in question and will almost always require a re-inspection if damages can’t be repaired for the initial amount that was written on the estimate.
That’s the basics!
I would like to make the point that whether you have a first party claim, or a third party claim, you have the right to question any damage assessment if it doesn’t seem reasonable. Keep in mind that if you challenge the damage amount as assessed by the insurance company, you will have to pay for another independent or public adjuster to assess the damages for you. A body shop can only negotiate damages based on actual repairs, but a licensed and trained adjuster can write a report that reflects differences of opinion which will force the matter into discussion. On first party claims, look in your policy for a section related to disputing damages (sometimes called the “umpire” clause). For third party claims, make sure you ask for diminished value and get a report from a reputable company like mine (shameless plug) to prove your loss of value after being in an accident!
Rental Car Companies
How To Note Damages On An Inspection Sheet, Damage Waivers And Tricks Of The Trade
Maybe you are on a business trip and have flown to your destination and need a car to get back and forth to the office. Maybe your car has been damaged by a hit and run driver, and you are having to rent a car while yours is getting repaired. Whatever the reason for renting a car, please take heed to the message I am sending in this article.
Rental car companies are tricky!
I use the word tricky because it is the nicest word I can think of to describe what some rental car companies do. Here are some very good tips to use when you are forced to utilize a rental car.
Tip #1: Make sure you are covered!
First of all, make sure your auto insurance policy will cover a rented vehicle. There are new policies out there that have endorsements added to them that alleviate the insurance carrier from “contractual” liability a.k.a. rental car agreements.
Tip #2: Inspect, Inspect, Inspect!
Make sure, and I mean make sure, you insist on a pre-rental vehicle inspection form being filled out and get a signed copy of it from a rental company employee (and that employee’s business card if possible). This is normally a sheet that has a very simple drawing of a vehicle on it which the rental company will rush you through filling out. They will normally ask you to place an “x” anywhere on the picture where you see damage on the vehicle.
Tip #3: Take your time
During your pre-rental inspection of the vehicle, take your time! Don’t let them rush you and do not miss anything at all, no matter how small it seems. I have experienced rental company employees suggesting that certain damages don’t need to be written down on the inspection form because they are too small to worry about. Do not believe it. Write down everything.
In fact, here are some common areas people miss:
- Windshield chips and cracks.
- Stains or tears in the interior upholstery.
- Rock chips on the front bumper cover or hood.
- Scratches on the rear bumper.
- Door handle on rear doors or passenger side doesn’t operate.
- Rearview mirror is loose.
- Wheels have scuffs or scratches on them.
- Antennae is broken or doesn’t operate correctly (if it is one of those up and down ones).
- Minor door dings.
Tip #4: If your insurance doesn’t cover contractual liability, then either bite the bullet and purchase the “damage waiver” from the rental company, or be warned!
Okay, so the point is that you might not have coverage for damage to a rental vehicle, and even if you do, make sure that the damage that is already on the vehicle can’t be claimed against your insurance policy. As an insurance adjuster for companies that excluded contractual liability and for companies that paid it, I have seen some crazy claims made by rental companies. I won’t name names, but some of the larger rental car companies are the worst about trying to generate revenue by making what the industry would call “non-meritorious claims”, but not provable as fraud.
Here’s a new set of numbers reflecting a scenario that I have seen a hundred times or more:
- The renter rents a car (doesn’t see any damage and probably just signed off on a damage inspection form without even knowing it or didn’t notice the little stuff) and has an uneventful trip.
- The rental vehicle is returned to the rental company as it was before the trip.
- The rental company now goes over the vehicle with a fine toothed comb and locates three door dings, multiple scratches on the rear bumper, and three chips in the windshield that have to be repaired. They get the damages estimated and total damages are $742.00. On top of the repair cost, the vehicle will have to be in the shop for three or four days to get all the repairs done, and during the time the vehicle is in the shop, the rental company is “losing money” because they can’t rent the vehicle out. This is another $120.00 of lost earning potential, and they might even try to claim that the car since it has to be repaired will have suffered some inherent diminished value. Oh, and don’t forget administrative fees because of the time they had to spend preparing the claim and such, that’s another $50.00. They will try whatever they can to make a buck or two at your expense.
- The rental company (if you didn’t get the damage waiver) then makes a claim against your insurance company for the damages (now at over $1000.00) plus the $100.00 it cost them to get the damage appraised.
- Your insurance company (if there is no endorsement relieving them of contractual liability) will have to “entertain” the claim.
- During the entertainment phase, your insurance company is supposed to contact you to see if they can find out what happened (even though no matter what happened you owe the damages because of the rental contract which says you do).
- Since you have no idea what happened and hadn’t read this article, so you don’t have a copy of a pre-rental inspection form showing all the damages were already there, your insurance company will likely make a payment for around $500.00, the real cost of the labor associated with repairing the rental vehicle.
- If you tell your insurance company that the damages were there when you rented the car, and they refuse to pay the rental company, then the rental company will get mad that their trick didn’t work, and they will try to collect the money directly from you, and could even attempt to get it on your credit if you don’t pay. If that happens to you, my advice is to look into your legal remedies under the deceptive trade practices act or consult an attorney.
Don’t Get Taken By The Trick
To conclude, by being “tricky”, and being nice to you when you are renting the vehicle as well as when you turn it back in, the rental company has taken advantage of your confidence in them, and either fixed all the wear on their rental vehicle or simply pocketed the money (and will do the same thing on the same vehicle over and over again). All this done at the expense of your claims history and insurance premiums. Did you know that even if an accident is not your fault, it still counts against you if you have to use your own insurance? Most insurance companies assign a point system to the type and severity of a claim.
If you get run into two or three times within a year or two (through no fault of your own), or if you are the victim of theft or vandalism, you can bet that you will be flagged as a high risk because of your “luck” and will eventually have a higher premium. Additionally, most insurance companies have the right to just cancel your policy flat if you have an accident within the first 30 to 60 days of the policy term, even if the accident is not your fault. Don’t let a rental car company trick you, embarrass you, or cause your insurance rates or credit score to be negatively affected!
Insurance Claims Careers: Subrogation Professionals
What Is Subrogation Recovery?
Across the nation there are a plethora of companies that specialize in subrogation recovery. In simple terms, subrogation is the pursuit of reimbursement on insurance claims that should have been paid by somebody else. Essentially, as a subrogation specialist, one would be representing an insurance company by attempting to recover claim payments from the parties that should have paid them in the first place.
As a simple example, imagine that you have been involved in an automobile accident that was not your fault, and that the person that caused the accident is uninsured, so you had to file a claim with your own company.
Here is what the subrogation specialist at your company (if they have a subrogation department) should do:
1. The specialist will first locate the “at fault” individual and attempt to contact them.
This can be a pretty hard job. Locating people is the main specialty of a good subro specialist. They will have to become an exceptional skiptracer. Skiptracing is the art of locating people that are either hiding or simply “not that stable”.
People that don’t have insurance are probably people that are in the lower income brackets, and they just can’t afford insurance. It is implied that if they can’t afford insurance, then they probably can’t afford a house, and may have a cheap method of staying in touch with friends and family. This presents a problem as they may move frequently, and finding a good mailing address or phone number is going to be hard. Even if you find a good mailing address, the chances are slim that you are going to get a response from sending a letter that says they owe money, hehe (I would throw unknown mail in the trash). So believe me, this is an art, and finding a good phone number is the key, which is where the next point comes into play.
2. So if one is unable to locate a good address, then they should start by researching the “common sense” avenues for finding a good address or number, such as canvassing the last known address information, or other tricks I won’t give away, hehe.
If a specialist is working for a valid company, then they will have access to some “special” databases which will provide them with a last known address. The good specialist will search for telephone numbers to businesses and addresses that are nearby to the subject’s address. Practice will make gleaning information from these nearby’s invaluable and soon, the seasoned specialist will have an avenue of contact. Time, training and practice is all it takes; it’s not that hard.
3. After locating an avenue of contact, the primary goal is to get the “tortfeasor” on the phone or at least corresponding.
After this contact, the goal is to negotiate some type of resolution to the pending lawsuit (if authorized) or subrogation claim. The thing that is “hard” or maybe I should say “missing”, is the skiptracing and negotiation training.
After location, the negotiation tools of a subrogation specialist make the negotiation part a little easier than it would be for your average consumer debt collector. The thing about subrogation is that it has a little more “teeth” than other types of “collection” (it’s really a tort claim and not a consumer debt except that Washington and Colorado disagree).
In almost every state, there is a law that can allow the subrogation specialist to set into motion a driver license suspension as a result of the “uninsured motorist’s at fault, and uninsured accident”. There are not many specialists that are “exemplary” or highly knowledgeable in this field. Traditionally, a specialist is trained from scratch by a subro company because the pay rate for a specialist is not as high as that of a seasoned and practicing adjuster (which may not make a good recovery specialist anyway). It is changing, but for a long time, the subro adjuster was looked at as a “sub-par” adjuster.
Subrogation is definitely a specialty field, and hands on training, or specialty training is the only way to go. Having some claims adjusting experience is a definite plus, but the right training can make up for the lack of adjusting experience. It is not required to have an adjuster’s license to practice subrogation as the specialist will not actually be adjusting claims.
4. After having the proper training, an individual with no adjusting experience (or license) can make up to or more than $65K per year.
Subrogation – Up and Coming Career
If you are looking for a career change and want to get into a specialty, then all you need to do is a little research. Subrogation is still up and coming, and many small insurance companies still do not have an in house specialist. With the proper training, a person can start an awesome career that can help keep everybody’s insurance rates in check. You’d be doing a public service, and the subrogation industry is gaining recognition. Many attorneys now do nothing more than pursue recovery of subrogation claims.
Someone who gets good at the “ins and outs” of subrogation can move up in the world and create a substantial nest egg for themselves while building respect within the humongous insurance industry!
Subrogation Services And Auto Claims
How To Maximize Recovery
The procedures used in subrogation are pretty standard across the board. Essentially, claims which are paid out due to the partial or full negligence of a third party are referred to the subrogation department where concentrated subrogation efforts are initiated.
The companies that realize the best recovery rates utilize a combination of methods to realize as many recovery dollars as possible. Depending on the quantity of claims coming into a claims department, the best recovery procedure can change dramatically. In general, here are the techniques my experience has shown me to be most effective.
I will break down the processes by categorizing claim departments by quantity of new claims per month (keep in mind we are talking about automobile claims only).
0 – 500 new claims per month (small companies)
For small companies, employing one highly trained, subrogation specialist is the way to go. An experienced specialist can identify, manage and collect on all potential recovery claims if the amount of new claims coming in per month is less than 500. The specialist should be auditing every claim for potential recovery. Additionally, the specialist should not wait until the claim has been paid to begin auditing and directing recovery efforts. The recovery specialist should have the power to direct front line adjusters on the investigative needs of the recovery department prior to actually taking over the handling of the subrogation/recovery aspect of the claim.
Working as a team is paramount when it comes to maximizing subrogation / contribution recoveries. By getting involved in subrogation early on in the claims process, an experienced recovery professional can anticipate obstacles to recovery and eliminate them before they occur. Using an active “eye” on recovery is one major part of recovery that many insurance claims departments neglect. The difference in recovery can be huge.
500 – 2000 new claims per month (medium companies)
For companies in this bracket, it is beneficial to utilize a specialist and an assistant to the specialist. It is profitable to have the senior specialist train an assistant to handle all of the administrative tasks associated with managing a book of recovery business. In addition, companies in this bracket may find it useful to employ the services of a good subrogation attorney.
Locating and hiring a good subrogation attorney can be challenging as it is hard to find an attorney that will not neglect a company that doesn’t send a large quantity of assignments. There are a lot of considerations to be made when selecting a subrogation attorney, in fact, there are so many, I cannot include them in this article, but a great specialist should be able to screen an attorney properly, and there are some great articles floating around which were written by lawyers that give great advice on the general factors to consider when searching for a subrogation attorney.
Additionally, companies in this bracket will benefit from using a specialty recovery company that focuses on recovery from uninsured motorists. This type of recovery is the most difficult and time consuming for an “in-house” specialist. Also, to efficiently work this type of recovery business, skiptracing prowess is mandatory. Managing claim information with an eye towards skiptracing is normally not possible with an insurance company’s claim management system, but a good specialty vendor will have a different way of maintaining claims data which is tailored towards the location of and contact with tortfeasors.
If the recovery potential is identified, the easy money is collected, and the management of the data is handled “in house”, then it is worth it to screen a vendor for the “hard dollar” recovery efforts.
The vendor should be able to report their activity in a live manner that coordinates with the insurance company’s needs, and they should be able to demonstrate their effectiveness in quickly resolving uninsured motorist recoveries. The vendor should never spend more than 90 days making recovery attempts in “collection” mode. Within 90 days, the vendor should be able to refer the recovery claims back to the insurance company and suggest legal action if it seems prudent. Then, the in-house specialist or team can assign the file to an attorney for immediate litigation or if they are really sharp (and incorporated), they can usually litigate the file themselves in small claims court, if the total damages fall within the proper jurisdictional limits.
Time is of the essence here! A major advantage to subrogation recovery is that if the at fault party has a driver license, then over 90% of the time, the validity of the license can be put in jeopardy as a way to coerce settlement. Many people will just avoid paying a damage claim until there is a real consequence such as a driver license suspension. It is a myth that most uninsured motorists don’t have money. I have recovered money from doctors, lawyers, teachers, and many other professionals that were uninsured and involved in an accident, for whatever reason. Taking swift action after making the proper collection efforts is paramount in maximizing recovery.
2000 new claims and above (larger companies)
For companies in this bracket, the same philosophy as used for the medium sized company should apply. The difference is that the number of in-house specialists should most likely increase and be divided into teams. Any company that receives 2000 or more new claims per month is surely handling claims in more than one jurisdiction, and therefore since the laws are slightly different, and the claims tendencies are different in the different jurisdictions, the approach should be to have sufficient talent employed to properly manage and negotiate recovery in all jurisdictions.
The utilization of vendors for “hard dollar” recoveries should also reflect specialization in jurisdiction.
Vendors that tout nationwide recovery services simply do not have the “talent” to properly recover “hard dollar” claims. The “talent” is paid a nice salary at an insurance company and doesn’t work for a small salary and commission, which in and of itself lends to the wrong philosophy when it comes to recovery. “Hard dollar” recovery is not profitable when working on commission, period. Most vendors work on a contingency basis, and the profit goes to the owner of the vending company, not the specialists that are trying to find that “easy” money so as to make a living on the “not so lucrative” commission structures that are available.
Don’t get me wrong, many large companies fail to utilize proper “in house” methods, and when they utilize “nationwide” vendors, the specialists that are lucky enough to work for these vendors will have a great opportunity at making a nice living by catching the large quantities of missed “easy” money left behind by the lacking methods of some of the larger companies. For companies that want the very maximum in recovery dollars, nationwide vendors will not be very helpful in recovery “hard dollar” claims, which is all that should be left over from the “in house” efforts.
In addition to using specialized vendors and attorneys, it is also very profitable to utilize recovery procedures to audit recovery demands from other carriers. Auditing demands can reduce subrogation related liability payments by as much as 18%. Even more profitable is to find a “hard dollar” recovery vendor that can serve a dual purpose and audit demands as well as perform the “hard dollar” recovery services. These types of vendors are few and far between. The blending of the two services has not been a traditional type of company because of the expertise and licensing required to audit claims.
Vendors that have this capability can provide actual recovery services at a reduced contingency and can also perform subrogation audits at reduced rates because of the blending of the services which have different profitability timelines. Subrogation audits are billed on a per claim basis and provide a vendor with immediate income whereas subrogation recovery on a contingency is not immediately realized.
Doing both allows a vendor to properly work “hard dollar” recovery assignments while still maintaining some immediate income on new demand assignments. The dual vendor is not forced to pursue quantity assignments of recovery claims like the traditional subrogation vendor, and they normally have only a couple of clients that they work for exclusively so as to maintain the profitability factors and provide the highest returns. Insurance companies who luck into finding one of these vendors will find that they get the most bang for their buck. The relationship is profitable for both the vendor and the insurance carrier.
First Things First: What Is Subrogation?
First of all we have to loosely define subrogation, so. . .
It is the “stepping into another’s shoes” scenario that comes about when one party pays (due to legal or contractual obligation) for another parties wrongdoing.
A simple example can be seen in auto insurance. For example, let’s say you are in an auto accident and forced to file a claim under your own policy of insurance because the person that caused the accident (tortfeasor) either refuses to provide insurance information or simply doesn’t have insurance. In this scenario, your own insurance company has to pay for the wrongdoing of the tortfeasor and by virtue of their payment to you, they step into your shoes and inherit the right to sue the person that caused the claim.
Whew! Did you catch all of that?
Okay, so whether you did or didn’t follow the whole scenario is beside the point. Let’s just assume you get it, and so at this point if we use the above scenario, your insurance company could present a claim to “Mr. Accident Causer’s” insurance company (if he had insurance).
When your company makes this type of claim, it is called a subrogation demand.
How Does Auditing Come Into Play?
So now the company receiving the demand could possibly use a subrogation demand audit. The audit is just that, an audit of the demand made by your company.
Normally, an experienced adjuster or attorney will review the claim documentation and weed out any overpayment or cost difference based on administrative, statutory, or precedent based rules or laws. The auditor will search out the seemingly petty details that relate to claims cost and return a report to the claims office that received the subrogation demand.
The result of a thorough subrogation demand audit is normally a substantial savings for the company receiving the demand. Differences in contractual obligations and civil obligations can make a big difference, and such things as parts availability or the failure of a company to utilize sound economic claims handling can also make a substantial difference in the amount demanded and the amount actually owed.
Now you know what a subrogation demand audit is.
Sometimes it’s just in the petty details!
There are ways around a reservation of rights defense, but you have to be stealthy and above all, you have to remain calm.
I’m going to speak on Texas and specifically on auto insurance as Texas is my home State and auto insurance is where I have the most experience, although the reservation of rights or its equivalent exists in almost every State in the U.S. and can come about on claims that are not automobile claims.
Dealing With The Reservation Of Rights Issue – Stay Calm!
Okay, so if you have found this article, either you are an insurance adjuster doing some research or you are involved in a claim and being advised that your claim is not being paid at this time and that they are putting the claim on a “reservation of rights”. Additionally, the damages you have sustained were most likely caused in a very clearly negligent manner and it is escaping you as to why the insurance company would not pay for the damages (sorta like you have been rear-ended, right?). On top of that, it is also clear that the person who hit you has a good insurance policy, right?
So what is the dang deal?
Why isn’t the insurance company paying you?
Don’t they know you could win a suit hands down?
Relax! Why are you so mad at the insurance company? Is it your insurance company? I don’t think so!
An Example Of Reservation Of Rights
The reservation of rights defense is best described with an example outside of insurance.
Think of it like this.
Imagine you have agreed with your friend Sam (in writing, too) that you will buy one apple at 123 Mart every time he buys one stick of gum from 123 Mart, okay? Also, as part of the deal, 123 Mart can call you directly every time Sam buys gum from them, and provided that they have a receipt showing the gum purchase, you have to buy the apples.
Now for the reservation of rights part…
As an additional part of the agreement you have with Sam, he agreed to confirm with you that he indeed bought gum every time 123 Mart asks you to buy apples. The problem is that Sam won’t return your calls, and he is not responding to mail, and he works all day, so you are having a hard time getting in touch with him for confirmation.
In order to keep from being hounded or sued by 123 Mart, you will be forced to send them a letter saying that Sam hasn’t kept his end of the deal and you can’t keep buying apples from them if Sam won’t confirm he has bought gum. Unless you trust that 123 Mart is completely honest and is not buying their own gum to produce a receipt, you will send that letter. That letter is the same as a reservation of rights letter.
If you are 123 Mart, and Sam has bought 1000 sticks of gum from you, how do you get your apple purchases?
The answer is simple….find Sam!
The other exceptions to the reservation of rights are when there is irrefutable evidence that Sam indeed purchased gum sticks (like 123 Mart has a video of him, or they have a signed statement from Sam saying he bought the gum).
If there is no question as to whether Sam bought the gum, then the reservation of rights letter shouldn’t be used.
When Reservation Of Rights Shouldn’t Be Used
In an auto accident, it is normally not a valid defense to use a reservation of rights if there is a police report showing the driver of the at fault vehicle is the same as the named insured on the policy of insurance and the police report shows a clear fault scenario like a rear-ender.
I hope you now understand reservation of rights. It is the insurance company’s claim that their policy holder has failed to live up to their end of the insuring agreement, and they can legally hold off on payment until they have all the information they need to complete a coverage and liability investigation. The insurance company will not assume anything.
Now you know!
Sometimes It’s Just In The Petty Details!
What’s My Total Loss Worth ? Figuring Total Loss Car Value For Your Insurance Claim
How Much Will The Insurance Company Pay You For Your Total Loss? What Is The Real Value?
So the insurance adjuster has told you that your vehicle is a total loss, huh? How much are they going to pay you? As a licensed insurance adjuster and the owner of a company that certifies vehicle values, I should be able to shed some light on this subject for you. Let’s get right to it. The actual cash value of your vehicle is generally defined as the value a private purchaser would pay for a similar vehicle, if the purchaser is under no pressure to purchase, and the seller is under no pressure to sell. Even adjusters get confused about this subject. A retail vehicle price is different than a private vehicle price because of the factors incorporated into it. The retail price will always be greater than the actual cash value. Dealers have to advertise, make a profit, pay sales people, inspect vehicles for safety concerns, and they have to maintain a staff that can assist purchasers with obtaining credit and filling out paperwork. All of these costs are incorporated into a vehicle’s sales price when it is sitting on a dealers lot. Your vehicle is not a retail vehicle, and will not command the same price as a vehicle that is sitting on a dealer’s lot ready to sell. The law normally does not require the insurance company to pay you for the retail value of your vehicle (if you’re not sure, call us and we will tell you where to find your State’s information for free).
Many insurance companies use a third party vendor to provide reports that reflect a vehicle’s market value. The most prominent ones are CCC (Valuescope), and ADP Autosource. These reports generally do not depict actual sales data, rather they depict asking prices (one can ask whatever they want, but the sale price is what is important). Additionally, the vehicle specifications reflected in these reports totally rely on human input. If the adjuster / report requestor doesn’t enter correct information, or if they enter nothing at all, then default values are generated, and the final report value will not be reflective of the actual vehicle that is being evaluated. Watch these reports for inaccuracies. If everything is entered correctly, the best argument against a report from CCC or ADP is to review the “comparable” vehicles and point out where and why the comparable vehicles aren’t actually comparable.
The national publications that can be used include NADA, Edmunds, and Kelley Blue Book. There are more, but these are the main publications that are generally used. If you run the same vehicle with each one, you will come up with different figures. My suggestion is to average the three and use that value because then your value is supported by all three publications.
The real data one can use consists of online vehicle auction sites or actual sales receipts from individuals. AutoTrader.com, and Cars.com will allow you to search for comparable vehicles in your area. The easiest way to use these sources is to do an advanced search and make sure you average only the really comparable ones. It can get complicated, but it’s normally worth the effort. Once you have researched the value of your vehicle using national publications and real data, and picked apart any market evaluation done by a computer, then you should be ready to negotiate by using the average price you have calculated using the data you have. Be willing to accept a little less than you have calculated, but be professional and persistent in your negotiation.
Always negotiate in writing.
Send a demand letter to the insurance adjuster asking for a specific amount (the amount you calculated), and give them a time limit to respond to you. After you have sent the demand, follow up by telephone every couple of days. If the insurance adjuster or carrier refuses to negotiate, then you must either work your way up the chain of command, or begin doing your research for filing a small claims suit in your State. Proper negotiation and a willingness to accept a little less than you consider to be fair will keep you from spending extra money filing suit and arguing your case in front of a judge or jury. If you can get to within $800 of the average price calculated using publications and real data, I would suggest you settle and move on with your life! Good luck with your total loss negotiation. You can do it! Sometimes it’s just in the petty details!
So you’re looking for secrets to help settle a total loss ? Well, look no further!
Do It Yourself – Finding The Total Loss Value Of A Vehicle
Insider Secrets To Help You Through Your Car Insurance Claim
As the owner of a claim service company and a licensed adjuster who has settled thousands of total loss claims, I will reveal the tricks to getting an insurance company to take you seriously.
Let me dispel some common misconceptions that apply in almost every State.
Myth #1: Your vehicle is not a retail vehicle.
Myth #2: Frame damage has nothing to do with whether your vehicle is considered a total loss or not.
Myth #3: You cannot force the insurance company to total your vehicle, nor can you force them not to total it.
Myth #4: Any vehicle can be repaired; it is simply a matter of cost.
Myth #5: The salvage value of your vehicle is very important.
Myth #6: Insurance adjusters do not have the authority to change company policy, but claims managers, litigation adjusters, claims presidents, and vice presidents of claims departments usually do.
Myth #7: Staff insurance adjusters are normally not experts on determining vehicle value and may not even have an adjuster’s license (ask them for their license number).
What dealers would ask for your vehicle is not what your vehicle is worth. Your vehicle is a private vehicle, and the value of your vehicle will be reflective of this fact.
Okay, if you understand those seven things then you are ahead of most people. I think most people believe (rightfully so) that insurance companies use computers and formulas to determine vehicle values. This practice is the main problem that consumers face.
How do you argue with a computer or formula?
I’ll tell you how – you have to call its bluff!
Each vehicle should be evaluated on its own merit, and the adjuster should be able to utilize common sense. Instead, processes, computers, and formulas keep adjusters from using logic, and when you (the victim) don’t agree with the result of the process, then the adjuster is trained to simply advise you that their offer is the final offer.
So what do you do? How do you call their bluff and get them to act human?
Do It Yourself Process For Total Loss
1. Gather every scrap of documentation on your vehicle that you can find and get it in front of you.
If you have no oil change receipts, other maintenance records, the purchase invoice, list of options, etc., then you will have a hard time proving your vehicle was taken care of and “above average” no matter how good it looks. You need to prove your vehicle doesn’t fit with the “formula”.
2. Demand a written salvage value quote from the insurance company (in writing).
If the adjuster verbally gives you a quote, write it down for comparison later.
3. Use the internet!
Go to the websites for NADA, Edmunds, Kelley Blue Book, AutoTrader, Cars.com, Craigslist, E-bay Motors, etc. Carefully document your vehicle’s value according to all of these publications. The more information you have, the harder it is for the insurance company / adjuster to argue with you.
4. Pick up the telephone and call auto salvage lots in your area.
Ask them to give you a salvage bid on your wrecked vehicle. Do this with at least three salvage dealers, even if you have to call dealers that are over 100 miles away from you. Document at least three bids on the salvage for your vehicle, and if possible, ask the salvage company if they maintain auction sales records and see if they will give you an average sale price for vehicles like yours that have been sold at auction in the last 6 months to a year.
Document all of this and determine your vehicle’s salvage value so that you can compare it with the value the insurance company gave you in step 3. Most of the time, insurance companies/adjusters simply use a percentage of the car’s value to determine salvage value (crazy and inaccurate!).
Okay, so if you have completed steps 1 through 4, you should be ready to move on. If you haven’t completed steps 1 through 4, then this is probably why you need help with your settlement; you can’t follow directions.
Just kidding! Moving on…….
5. Write a well thought out demand letter and give the insurance company a time limit for responding.
Indicate in your demand that your offer to settle will be rescinded at the end of your time limit, then follow up by telephone every two business days until your time limit expires.
6. When calling the insurance company, unless the adjuster is responding favorably, just request to speak with the vice president of claims, and then settle for a claim supervisor.
Unless you are an experienced negotiator, try to avoid getting into a detailed conversation with the claims department – simply ask them when you can expect a written response to your demand. Try and get the supervisor to provide you with a fax number or e-mail and then correspond only in writing. If they will not provide you with a fax number or e-mail address (some won’t), then try and record your conversations with the claims office, and advise them that you’re recording the conversations, not because it’s required, but because they will be more likely to be careful if they know they are being recorded. Of course, you can use snail mail, but who wants to wait on the mail? The point is to document what you are doing so you can review it later if you need to.
7. Be willing to give in a little bit on the value that you expect to receive.
If the insurance company is increasing their offer to you, then in the spirit of fair business dealings, you should reduce your demand. Always move in small increments…don’t give away the house or settle for too little (insurance adjusters are trained to move as little as possible to try and settle low, so why shouldn’t you do the same, but in an attempt to settle high?).
Be confident in your negotiation, but don’t be over-confident. Remember if you fight for every penny, you will likely spend at least a few hundred dollars fighting, you know? And it is possible that you have overlooked something that an adjuster or attorney has already found.
8. If all else fails, hire a qualified expert to write a detailed and industry accepted market value report.
Submit the report to the insurance company along with a final demand letter and a small claim petition.
That’s it! If you can follow the steps outlined in this article, you can get a fair settlement for your auto total loss. There are people like us out there that will help you to navigate through your claim for free, you just have to find them.
Sometimes it’s just in the petty details! Good luck!
How do I know you’re a true diminished value expert ?
You can’t! You have to have a little bit of trust in your gut.
You have to talk to the expert and come up with the hard questions to see how they handle them! Ask about small claims, ask about phone calls to the adjuster after the report has been submitted. Don’t hire someone who will take your money, write you a report and then SCRAM! Lots of guys just tell their clients they have to get an attorney if they get a denial and that is simply NOT TRUE! For the smaller claims, it is impossible to find that kind of help from an attorney because it just isn’t worth it to them. We take up the slack in that area and consult with accident victims throughout the process so they walk away with their diminished value claim settled!
We are the real deal, believe it or not. Our founder has over 17 years experience evaluating property damages, making us uniquely qualified to handle even the most difficult and complex of damage scenarios with ease. Our services help settle property damage disputes daily and are used by attorneys and individuals alike. Let us give you a free claim consultation and you decide for yourself whether or not we’re experts.