Questions About Auto Insurance and Accidents

oldfarmer50

"...What coverages are included in the quote..."

We went for minimum liability required by New York. 25/50 liability, 10 property damage and PIP (no fault) of I think 25.

oldfarmer50

"...A OUOTE is always subject to underwriting information not on the application..."

I'm not sure what you mean here. Do you mean that if we fail to give a complete record of his tickets and accidents they can raise the rate?

They went over his record with me on the phone and at they checked it out. The rate was still the same.

That's interesting what you said about 60 days. You mean they can bump the rate within that time?

As to his driving record. He's 20, single, drives a $350 beater about 4 miles to work. He has had mulitiple moving violations for stuff like speeding, rolling stops etc. He had one accident where he drove my car off a cliff. Fortunatly, no one was hurt and the car was worth less than $1000. Because he left the scene the police were really angry and wrote him every ticket they could think of.

Mr_Shiftright

Sure, if their investigation doesn't jive with what's on his application, they certainly can raise the rates.

oldfarmer50

"...if the investigation doesn't jive..."

Well, I gave them all the dirty details so there should be no surprise.

Mr_Shiftright

Well insurance companies can be slimey nonetheless...but if you played it straight, as I'm sure you did, then there should be no cause that I can think of. Of course, it's not real until you see it in writing.

euphonium

If he applied for insurance in my agency, we would place him in the Assigned Risk Pool based on what you have said.

How can you be sure you know his complete driving history as there may be other incidents he "forgot" to tell you?

As he is just four miles to work, a bicycle is in order - just for the safety of others on the roads.

oldfarmer50

"...other incidents he "forgot" to tell you..."

I'm pretty sure I got them all. As I said I was on the phone with the company rep and he was able to access my son's record. I know this because one ticket he got was "speed too high for road conditions". The menu on their web site didn't have that exact offense so I picked "other minor violation". The rep noticed this and after I explained why I had listed it the way I did he said: "The rate is still the same".

I have to assume that if I had missed anything else he would have mentioned it at that time.

As for the bike idea, that would be Ok for the summer but here in upstate NY bikes are not practical in the winter. Besides, drivers here like to use bikes for target practice. Two bikers have been killed in the past weeks by hit and runs. My son may not be perfect but I don't think he should get the death penalty.

Mr_Shiftright

cops in upstate NY are tyrants in my experience. I think they were voted "worst in America" in some car magazine, as I recall...even beat Texas and Chicago (I know, I know, "don't mess with..etc etc.") :P

oldfarmer50

"...cops in upstate NY are tyrants..."

I'm not so sure I'd call them tyrants but it pays not to piss them off. Half of my son's points came from the one accident. He slid on ice coming down a hill, slid through a stop sign and over an embankment into the woods.

This was in January, he was cold so instead of calling the police he called a friend and went to the friend's house to warm up (and I guess to come up with an excuse for why my car was in the trees).

In the meantime the police dragged me out of bed thinking I had been driving. When they saw it wasn't me and there was no one with the car they brought out the bloodhounds to search for him. By the time I located my son the police were in a rare mood. I made sure to accompany him back to the scene because I was afraid they would work him over if they got him alone.

In the end they took it out on him by writing multiple tickets.

euphonium

After coming up on the scene of a one car crash and finding nobody in or near the wreck, it is very thoughtful of the police to use dogs to search for an injured person wandering around the woods in a daze. It is more thoughtful to wait for the police so as to advise them they needn't call out the dogs. Leaving the scene is not recommended until you've checked in with the authorities.
Don't be afraid of Police as they are there to "Serve and Protect" so I trust you thanked them for searching for your errant son.

oldfarmer50

"...thoughtful of the police to use dogs..."

It sure was. It was after they found out he was OK that both my and the police's mood changed.

"...Leaving the scene is not recommended..."

No it is not. It can even get you a ticket

"...I trust you thanked them..."

Yes I did. And I insisted that my son apologize to each officer. I still would not have left him alone with them though. Police are people too and they can make bad judgments in the heat of the moment, just like teenagers.

Mr_Shiftright

Absolutely right. You can't generalize and you can't give away your rights to the police. Police need to be watched and monitored by the community just like politicians, the military and, to veer back on topic....your insurance company. Otherwise you are just asking for abuses to crop up.

Supposedly state insurance boards are supposed to regulate insurance companies and protect the consumer, but one has to wonder. I've tried to file a complaint against an insurance company for violation of state regulations. It's a sobering experience.

No wonder there are so many class actions suits flying around right now.

Here's an interesting website on the subject--but I have no idea how accurate or fair it is--

http://www.badfaithinsurance.org/

cccompson

Last month the 10th District Court of Appeals (Franklin County) unanimously recognized that diminished value can be recovered in Ohio in Rakich v. Anthem Blue Cross & Blue Shield, 2007-Ohio-3739. This is now the law in Columbus (and I sure hope I never need it!).

According to yesterday's edition of The Columbus Dispatch, the insurance company has yet to decide whether to appeal to the Ohio Supreme Court. IMHO the decision was well reasoned and will not be reversed if appealed. Caveat: perhaps I should say that it should not be reversed. Given that the GOP holds all 7 seats, pro-business decisions are not unknown here.

Per the newspaper, the SUV in question sold for $49,000 new. Five months later it was broadsided and the insurance company paid $8000 to repair the damage. The owners are now seeking an additional $6000 for diminished value.

Mr_Shiftright

Now were they suing their OWN insurance company or the third party's?

In California I was under the impression that you can sue the third party but not your own company for DOV.

Insurance companies HATE DOV claims. They fight every one tooth and nail.

euphonium

Have never read under Collision Clauses where DV is part of the coverage.

It should be honored in all Property Damage Liability Claims and all U.M. Property Damage Liability claims.

The more pricey or costly of the vehicle in question, the more DV should be awarded.

cccompson

A number of defendants were named in the case (and the first named defendant has already been dismissed out). It appears that the insurance company here (Nationwide) was the carrier for the other driver but I can't be sure from the opinion.

LOL, the newspaper quotes the vice president of governmental affairs for the Ohio Insurance Institute as saying that the case is little more than a marketing ploy for civil lawyers and that it will have "...very little impact on how claims will be handled in the future."

Right - the spin never ends.

As it happens, Nationwide is my insurer and they will not pay DV to a policyholder unless the policy has such an endorsement.

One of the interesting points the court made related to Nationwide's claim that such claims were inherently speculative. They disposed of this summarily by saying that one of the things insurance companies do all the time is determine before and after values of crashed vehicles.

Mr_Shiftright

You can probably use the "reasonable man" argument as well: If two identical 2006 Mercedes Benz or Lexus cars are sitting side by side, each one priced at the same price, but one untouched since the day it was built and the other recently repaired with $20,000 worth of body damage, which one will the reasonable man choose?

Exactly! And what would compel him to choose the repaired vehicle?

Yep, lowering the price.

What might be somewhat "speculative" is the actual dollar amount required to convince the man to buy the previously damaged car. But we know it's going to be a substantial amount, probably 25%-35% deduct off "book".

euphonium

It's interesting to observe: Some men will not purchase a used car that has been knocked up a bit, but will not think twice about marrying a woman who has had a similar history.

marsha7

I believe that the automobile will have its useful life shortened by being knocked up, whereas the other subject in question may just be better "broken in", kinda like a good leather saddle or a rifle after the first 200 rounds fired thru it...

euphonium

200 is a lot of rounds for one trigger or - was the saddle on Roy Rogers horse?

oldfarmer50

"...will not pay DV to a policyholder unless the policy has such endorsement..."

I think you have it right there. Insurance companies will resist anything that increases their required pay out. Any business would. In the future I can see DV as an optional endorsement that you pay extra for.

I don't know if I can agree with the logic that the insurance companies should just automatically pay for DV without some compensation for it.

Some people may prefer to go without such an endorsement because they drive older cars where DV is not an issue. I can just see me filing a claim for my old farm truck. "Yes Mr. insurance man, as you can see they blended the paint all wrong and now the rust spots don't flow together like they use to."

Mr_Shiftright

DV is kind of a moving target that's true.

If a Saturn is repaired in spectacular fashion, and photos show only some sheet metal damage (no frame, suspension, radiator or engine damage), who's to say there is ANY diminution?

But if a Rolls Royce or Mercedes or Lexus even has a new fender replaced and repainted, there is definitely some amount of Diminution.

If a Ferrari has major collision, you can just throw it away...nobody will touch it on resale....the diminution would be full-bore drastic. 99% of body shops aren't even capable of repairing it.

dvexpert

Insurance companies in Ohio in have no choice but to pay diminished value to insureds when repairs fail to restore a car to its preloss condition, whether or not there is an exclusion in the policy. Insurance is based on the premise of indemnification. So if I have a car worth $30k before an accident, it doesn't matter how much is spent on repairs, if it is not worth $30k upon completion then the insurance company still owes me money.

The insurance company has the option of repairing my car, totaling my car and paying me the retail cash value, or replacing my car. It's their choice and they may choose the method most economical for the company. When they choose to repair, they take on the burden of repairing the car to the condition that it held prior to the loss. Since no car can be repaired to that level, there is a potential for DV on every claim.

Insurers, too, understand diminished value and reluctantly admit to its existence when their backs are to the wall. During State Farm Mutual Automobile Insurance Co. v. Mabry, 274 Ga. 498, 501; 556 SE2d 114 (11/28/2001), a lawsuit that caused insurers to begin paying diminished value claims as a normal course of business in the state of Georgia, State Farm provided testimony under oath confirming that the potential for diminished value exists in every claim, even when cars appear properly repaired. Georgia Supreme Court Justice Robert Benham wrote the following November 28, 2001, recounting the testimony of State Farm's witnesses and documents it presented during discovery:

“... The first question, whether diminution in value occurs even when physical damage is properly repaired, is one of fact. The trial court found that there is a potential for a diminution in value loss in every event of loss, and that diminution in value can occur even when a vehicle is repaired properly. In support of those findings, the trial court relied primarily upon documents produced by State Farm during discovery and upon the testimony of State Farm’s witnesses. The documents from State Farm acknowledged that there is a common perception that a wrecked vehicle is worth less simply because it has been wrecked. Witnesses for State Farm testified that a potential for diminution in value exists in every automobile accident, and that the public perceives a loss of value in any wrecked vehicle and would choose an unwrecked vehicle over a wrecked one, assuming the vehicles are otherwise the same ...”

When the repair option is chosen, the quality of repairs is an important consideration for two reasons:

1) If I wreck my $30K car and it is totaled, it will cost the insurance company $30K to either replace it or pay me the cash value so I can buy another. But when the repair option is chosen by an insurer, the preloss language in the law prevent them from putting a wooden fender on in place of steel that they could buy for a fraction of the cost. I must get my car returned in the same condition after repairs as it was in before the loss. If that can't be accomplished (and it never can) they must make up the difference in money or keep repairing, re-repairing, and re-repairing the rerepairs.

2) If during repairs my car's value is enhanced in some manner, I would owe betterment. So why would it be that if an insurer chose to repair my car leaving it less valuable than it was, why would I be required to absorb the loss from a poor choice the insurer made? I pay when it is bettered and I also pay when its value is lessened???? What's fair about that?

Personally, I don't know what the big deal is with this case, especially if it is third-party. I have been valuing cars for more than 10 years for attorneys and consumers, and all insurance companies pay diminished value in Ohio in third-party cases. All pay in first party cases where repairs fail to indemnify policyholders.

Lastly, the difference in a car's value before and after the loss is the primary measure of damages in Ohio. Cost of repairs is a secondary measure to be used when there is no testimony regarding value.

Now ask yourself this question: Why would insurers use the secondary method of determining a settlement instead of the primary method? Answer: Because with few people filing dimininshed value claims insurers wind up making out like bandits instead of paying all they owe, and most people don't even know they have been cheated. They skimp on repairs and very few ever consumers have cars inspected postrepair to find out the true condition of their auto and its postrepair value.

Diminished Value Slideshow

Diminished value is your auto insurance company's best kept secret

David Williams
Auto Repair and Diminished Value expert

Mr_Shiftright

Very interesting stuff.

Determining inherent DOV (as opposed to repair-related DOV) seems like a difficult task. I know some folks use "calculators" (formulas) in order to quantify judgment but these formulas seem to create as many problems as they solve.

cccompson

The "...big deal in the case..." was that Nationwide declined to pay the DV claim and prevailed at the trial court level. The appellate court went the other way (and, I believe, said it was a case of first impression).

Just why Nationwide took this stance (you said "all" insurance companies pay such claims in Ohio) is unknown.

robr2

...isn't DV really only applicable when the car is sold at some point in the future??

You may suffer a loss today of X dollars but should the insurance company have to pay that amount if you don't sell the car immediately? After all, is the DV going to be the same in 10 years when you finally trade in that 200K vehicle?

Devil's Advocate Here.

dvexpert

Insurance companies would like you to believe that you have to wait until you sell your car to collect diminished value because it allows them to stall claims payouts and hold on to your money. DV is an element of damage caused in the same occurrance as when the fender got smashed. Generally speaking, if an insurance company accepts liability for an accident, it owes for all the losses (those not specifically excluded in the list of exclusions that accompany the policy), not just the losses it wants to pay.

In my example above a vehicle owner has an asset worth $30K in its preloss condition. A loss occurs and the value immediately depreciates by at least $10K with $10K in damage. The asset is now worth $20K. Repairs are begun and $10K is spent on reconstruction. But is the car again worth $30K now that its repaired and has a damage history? Probably not. Is it worth $29K? $28K? Probably not. Most people would rather buy an undamaged car than take the risk of buying the repaired one for only a $2K savings. Would $5K in savings turn the head of a buyer? What would it take to make someone want a repaired car over one that had never been damaged? When you find that number (a number that represents what a consumer will pay in an armslength transaction with full disclosure) you will know the amount of DV you are owed.

If you have proof that your asset has lessened in value, and an insurance policy that promises to pay you for your losses, why wouldn't you want to collect for the diminished value just as you did for the damage to the fender? Both are losses caused in the same occurrance and covered by the same insurance policy. What logic has you convinced that you can be paid for one now, but you have to wait to collect the other?

The average diminished value loss is staggering. Why would you want to wait to collect what you are rightfully owed immediately after the accident?

David Williams
Safe Collision Repairs

marsha7

DV now means that the insurance can close the file on the claim...insurances hate nothing more than keeping a file open indefinitely for something as simple as DV...what if you do not sell the vehicle for 7 years, that is a long time to keep a file open, now multiple that by 1000s of vehicles, and the recordkeeping would be a nightmare...

Also, the DV 10 years down the road may not matter, but it would when the car is newer...if you bought a ten year old vehicle, even knowing it was wrecked 9 years ago, would hardly change the vaue of the car at year 10, as it has already lost much of its value...so recovering DV at year 10 might just be silly...

Did I miss the point???

dvexpert

You missed the point.

One does not have to sell their vehicle to collect diminished value. It is an element of loss just like damage to a bent fender and other property damage. If an insurance company accept liability for damage, diminished value should be included.

Is there Good Hope for Fair Auto Insurance Settlements?

David Williams

marsha7

the point I may have missed...of course DV should be included, my point was that it should be paid at the same time the repairs are concluded, as DV will have the greatest effect the newer (younger) the car is...

I meant that for a company to pay DV 5 years later would be silly, as the greatest DV takes place when the car is newer, or, put another way, paying $2500 in DV when the car at 10 years old is only worth $3000 from a wreck 5 years ago makes no sense...

We incur the loss now, so DV should be paid now, as tho it would compensate us for the loss of value as tho we traded the car in today, not some time in the future...

lilyowen

That it is a loss incurred is an item of debate throughout many states currently. That it exists is not so much.

I am curious though, why an advocate for the collision repair industry would be pushing dv so hard? It will only really detrimentally effect the industry (except for PRI's) More vehicles will total, earlier and more often. In addition, it likely will work out to be a wash for the carriers as they will now -- and with impunity -- be able to reduce total-loss ACV settlements for DV. If carriers start giving DV, you can rest assured they will start taking DV.

dvexpert

My mistake. Sounds like we are on the same page.

dvexpert

I am neutral toward the collision repair industry, not an advocate. Most PRIs agree that only about one car in every one-hundred inspected is repaired as well as it could be repaired. Even in that one case there are limitations that prevent the car from being in its true preloss conditon. Additionally, most shops align themselves with insurers against consumers, only conusmers are not aware of that fact. They are led to believe these direct repair shops and their insurance agent are looking out for them. Nothing could be further from the truth.

Diminished value is the tool that levels the field for consumers. If its use means more cars total. so be it. If insurers take as well as give DV, that's fair too.

manda613

Please bare with me I'm new to this whole forum thing.
Saturday I purchased a new car (it only had 21 miles when I drove it off of the lot). Monday evening I had to go back to the dealership to finalize a few things. When I drove out of the parking lot I got into an accident. There were 74 miles on the car. It's pretty bad and I don't know if it's totalled or not.
Fortunately, I had just signed papers adding GAP insurance to my loan. However, I was told by the guy that towed my car that if it is totalled I may be entitled to another car since it is under a certain mileage. This sounds completely ridiculous... but I wanted to know if anyone had heard of this?
I live in Pennsylvania, in case it matters.

qbrozen

well, if its totalled and you have GAP, then it doesn't matter. Unless you are concerned with a down payment. did you put one down, and how much was it?

manda613

I had a trade in worth $1,200.

qbrozen

was the accident your fault or the other party? What is your deductible?

manda613

Fault is still to be determined. My deductible is $500... I just spoke with the place that towed my car and they said it's probably going to be totalled. So far $9K in damages and he hasn't even looked at the powertrain yet.

oldfarmer50

"...9K in damages..."

Man, I've had nightmares that end like that. I've never heard that you can get a new car if it is totaled under a certain milage. I think that guy was just trying to make you feel better.

I don't think 9K in damages will total most new cars. My father had an accident in his new (500 miles) Buick in 1998. 8K in damages. They fixed it and it's still on the road.

You are probably going to eat the $500 deductible.

marsha7

I fail to see how $9K in damages will total it...

okko1

insist on full replacement of your car. i as thousands of car buyers have purchased this insurance to never in 100,000 miles have a accident. you know that carfacts.com can be a major issue at time of resale.

qbrozen

You honestly don't know who was at fault?

Well, since it MAY be your fault, then you MAY be out $1700 ($1200 trade plus $500 deductible). What kind of car is this? If a cheap one, then I can see it being totalled. If over $20k, then you've got a LONG way to go to get it totalled. Hopefully you'll know soon enough.

marsha7

but I will say this...anyone pulling out of a parking lot or driveway, onto a roadway, usually has to yield the Right of Way to traffic already on the roadway...and, it was stated that the poster was "pulling out of the dealership"

While not jumping to conclusions, I would be interested to know "the rest of the story"...

Mr_Shiftright

I noticed you were critical of formulaic approaches to calculating DV. So do you use formulas or just give a % opinion based on comps, etc.?

manda613

I have a 2007 Hyundai Elantra. New Car Blue
Book Value $14,640. The way it was explained to me, is that if the damages exceed a certain % of the KBB price they will total it. So far the damages = $9K. That's already close to 62% and there are still more to be assessed.

Here is my version of the accident (there are two sides to every story and then there is the truth, right?): I left the dealership the same way I came in (there is a road along side of it). When I got to the intersection with the main road, I realized that I was on a one way road (of course going the wrong way). I am not familiar with the area at all, so I just wanted to get to where I knew. I needed to make a left onto the road I was facing. I had my left turn signal on and a guy coming from the left stopped to let me out. I sat there for a min and waited for 2-3 cars coming from the right to pass. When they did I pulled out and that's when my car collided with another car coming from the left. Again, I'm not familiar with the area so I'm not sure if this woman was upset that traffic appeared to be at a stand still for no reason and decided to go out around or if there are two lanes of traffic during rush hour???

qbrozen

When they did I pulled out and that's when my car collided with another car coming from the left.

Shame on your car! I guess it learned its lesson!

;b

Sorry, I shouldn't make light of your situation, but I always find it humorous when a person telling an accident story personifies objects. Its very very common. Like, "the car then careened off the road" or "the tree jumped out in front of me."

Kirstie_H

My favorite are the negative stories about SUVs - "due to poor visibility, an SUV backed over a 4-yr-old child today..." I was quite surprised to learn that an SUV had ANY vision capabilities.

Back to topic... perhaps the OP was hit by a car turning into the dealership, who might have taken too wide a turn. I know we don't know the details, but it is possible that she was not the one at fault.

manda613

Well, I've obtained a copy of the police report... and just like the magic eight ball said "out look not so good"

Coppers are saying it's my fault... not to mention that the other woman's speed was 000, funny!?!?

cccompson

Back to the original question here - push hard to have this thing totalled. At the time of the collision it was a used Elantra worth, what, 12K, maybe.

volvomax

If they total the car,they will just pay it off.

I can't see how you would be entitled to another car.