Q:My son was in an accident with our second car. Although it is an older vehicle, I keep it in perfect shape and it’s an excellent car. The problem is our insurance company wants to write it off instead of fix it. We are having an argument over how much the car is worth. What can I do?
A:Insurers generally will only allow a certain percentage of a used vehicle’s value to fix it.
For example, if you are in Saskatchewan and your $10,000 vehicle is in an accident, the maximum amount the insurer will agree to spend on repairs is 75 percent or $7,500.
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That sum includes your deductible, so if you don’t have a package policy, you’d pay $700 and the insurer would pay $6,800.
The exact percentage will vary from province to province, or insurer to insurer. Some provinces do not have government insurance, so then it’s a matter of contract and what your particular policy says. Check your policy for these limits.
That’s not the difficult part. Usually, the negotiations centre on two things: what is reasonably required to fix the vehicle and how much is the vehicle worth?
Every insurer will have an appraiser inspect your vehicle and the damage that was caused. It doesn’t matter what caused the damage – collision, hail, deer strike or vandalism. The parts and labour required to fix that damage must be assessed and the total repair bill estimated.
An adjuster is a different person from an appraiser, whose sole role is to estimate the damage. The adjuster sometimes gets involved in determining who is at fault for the accident, which may affect whether you have to pay your deductible.
As well, the adjuster applies the rules from your insurance policy, determines the value of your vehicle and decides whether it will be repaired or written off.
If it is written off as a total loss, your insurer will determine its market value as of the date of the damage and loss. That amount (possibly less your deductible) is paid to you in cash, so you can find a replacement vehicle.
One problem is that used vehicles, although older or with a lower value, are worth more to you than the market price.
Your question involves a debate frequently held in insurance circles. What is the vehicle worth? Most insurers use an automated computer system to determine value.
That system is built and maintained by someone other than the insurer, and that company collects data on used vehicles to determine what the typical vehicle of that year, make and model is worth.
Adjustments are made for mileage, shape and options on your vehicle, and a value is determined.
If you have concerns about the value of the vehicle your insurer has determined, ask for the computer sheets that led to the value.
My experience is that these computerized assessments are often faulty. They sometimes have the wrong information about what options your vehicle has, and sometimes even the mileage has been recorded incorrectly. The sheets should list a number of comparables – vehicles of the same make, model and year as yours.
Check every detail on every comparable vehicle, especially mileage and location. Often they list a phone number, so phone the seller and get more information. If you can show there are errors or problems with the insurer’s assessment, that’s a big first step toward increasing your value.
Next, search for comparables. Look in your newspaper, auto trade magazines and on the internet.
Many internet ads have pictures and either an e-mail address or phone number to contact the seller. I call the seller and talk about the car’s condition and equipment and what the bottom-line sale price is. People are willing to help when you explain you have an insurance problem.
Also, if you have recently put repairs or additions on your vehicle, that can increase its value. Send your adjuster copies of all recent repair bills.
Finally, if you and your adjuster cannot come to terms over value, go over their head. Ask to speak with a more senior adjuster or someone in management.
Your insurance policy will dictate what recourse you have. In some cases, you can sue in small claims court or you can go to arbitration. There is usually a mechanism whereby value disputes can be resolved by a third party.
The key is to do your research. Your adjuster has multiple files to deal with, while you only have the one. Be the squeaky wheel, be prepared and put forth arguments based on facts.
Rick Danyliuk is a lawyer with McDougall Gauley LLP in Saskatoon.
