[Wichita-SCCA] Jeeps Cause Pain

Sun Mar 18 11:32:37 EDT 2007

Wow.  You just opened a BIG can of worms.  Here's the breakdown as I 
understand it.

1.    Documentation will help your cause.  The more documentation the 
better.  Save all your parts invoices as you build & maintain the car --  
just be cautious about letting your wife glance at the file!  <grin>

2.    On the honestly slick or show car vehicles it would likely help if you 
obtained a professional valuation complete with detailed photos every couple 
of years.

3:    Don't buy "Stated Value" insurance on your car.  Buy a standard policy 
instead.  The reason why is that the Stated Value is actually a coverage 
cap.  Basically it says that in the event of a Total Loss the policy will 
pay actual cash value (ACV) of the car up to the coverage cap.  Stated value 
protects the insurance company, not you, by limiting their liability 
exposure.  In addition the insurance company will charge a premium based 
upon the full stated value.  This premium would then typically be much more 
than would be charged for a standard policy on the same vehicle.  The 
standard policy has no such cap.  It pays for a total loss based upon market 
value for similar cars sold in your market area over the last 90 days or so. 
With the stated value policy offering less coverage at a substantially 
higher premium than a standard policy, the clear choice is to go with the 
standard policy.

4.    One thing to remember is that most insurance carriers place a $1000 
limit on damage, theft, or value added to a vehicle's ACV regarding any 
custom items (paint, wheels, engine mods, etc.).  This limit will most often 
show up as an endorsement in your auto policy so it pays to read the policy 
to find out where you stand.  This only applies to your car if you are 
claiming against your own carrier.  It doesn't count if the other guy was at 
fault and you are going against his insurance carrier as a claimant.  But it 
comes back to you and your own coverage if the other guy is an uninsured 
motorist even if the other guy was at fault in the accident.

5:    Having said all of the above, in the end it might not make any 
difference.  The reason why is that there is a quirk in Kansas law that 
allows the insurance companies free reign to stand on their offer whether 
that offer is fair or not.  The reason why I say that begins with public's 
commonly understood notion that the basic process of determining a vehicle's 
ACV is laid out in directives and policy regulations issued by the Kansas 
State Insurance Commissioner's office.  These rules talk about such things 
as finding comparable cars for sales or that have recently sold in your 
market area for the purpose of averaging their actual selling prices to 
arrive at a local ACV.  Or they could look in books such as NADA or Bluebook 
or CPI and  base their offer on those.  Or they could work with national 
database companies such as ADP Autosource, CCC Valuescope, and so forth. 
These rules are intended to protect the vehicle owner and force the 
insurance companies to play fair by actually considering your documentation, 
the vehicle's condition, and so forth.  Thus the public thinks that the 
Insurance Commissioner's office will fight for them when and if they want to 
challenge the insurance company's total loss offer.

The quirk is that the insurance companies can bypass all of that if they 
want to.  They can disregard anything coming from the Insurance 
Commissioner's office in terms of how they determine a vehicle's ACV.  This 
is because of wording in a minor paragraph of the 2005 state Transportation 
Bill wherein the definition of ACV is defined as being a vehicle's value 
provided by a national database company.  That's all it says.  It doesn't 
say that the ACV provided by the national database company has to be fair or 
correct or even researched -- it just has to exist.  These national database 
findings claim to be all done by computers without human influence based 
upon  objective input data but the truth is that the outcome can be and 
often is manipulated by the insurance companies to reduce their settlements. 
It comes down to the legal fact that an actual statute as voted on & passed 
by the state legislature and signed by the Governor will override rules and 
regulations created in-house by a state agency every time.  In Kansas then, 
an insurance company has the ability to make an offer and then stand on it 
regardless of fairness.  No ... you can't sue either your insurance company 
or the other guy's insurance for Bad Faith negotiation either -- its not 
allowed by Kansas law.

The good thing in all of this is that most insurance carriers do not take 
advantage of the quirk and they do try to provide a fair total loss 
settlement offer.  Most carriers find that it is in their own best interest 
to make fair offers.  Even with these guys however, their idea of fair is to 
offer an ACV for "average" condition rather than to adjust based upon 
condition &/or options.  This works out great for the guy with the poor 
condition car but is hard to overcome if you own an above average car.

6:    If you do choose to fight an offer then be prepared to spend time (up 
to several weeks or longer) and money (to pay for your side of the 
arbitration).  There's no guarantee that you will win in arbitration either. 
It's a crap shoot and they won't pay for vehicle storage or rental past the 
date that they made their offer.

This whole thing tends to push people into either accepting what is offered 
or to try to negotiate a higher offer with the adjuster.  It often happens 
that a polite, professional approach to negation combined with documentation 
of vehicle condition or special interest will succeed in obtaining a 
somewhat higher offer.  If so then accept that second offer as fighting the 
insurance company is almost certainly a poor business decision.  It may not 
be sufficient in your point of view but let it go.   Cut your losses and get 
on with life.

Maybe one way to get a bit more would be to owner-retain salvage.  This is 
where they remove the salvage value of the wrecked car from the total loss 
settlement and give you the balance but you get to keep the wrecked car. 
One wrinkle here is that late model cars will find a "salvage" brand on 
their titles so take that into consideration but still you might be able to 
rebuild the car at a low enough price to come out okay or you might be able 
to part it out.  Either way you'd be taking a chance but I've seen it done 
many times.

Good luck,
Greg Laws

----- Original Message ----- 
From: "Eric Linnhoff" <knuckledragger at kcweb.net>
To: "'Wichita Region SCCA.'" <wichita-scca at wichitascca.org>
Sent: Sunday, March 18, 2007 9:23 AM
Subject: Re: [Wichita-SCCA] Jeeps Cause Pain

> Glad to hear that you're alright and hopefully the car can be repaired and
> saved.
>
> That brings me to a question which perhaps Greg can answer since he's
> familiar with this field.
>
> If the other guy's insurance company decides to total it, can you fight
> their "judgment" in any way?  What I'm saying is, I'm sure most of us "car
> guys & gals" really love our cars and we pour more than the usual amount 
> of
> TLC into them.  Things like crazy amounts of preventative maintenance such
> as proactively replacing all of the brake calipers, rotors, lines, etc.
> Drain and refill the manual tranny with fresh synthetic fluid, replace the
> 1st & 2nd gear synchros and shift forks, etc.  Things that the average
> buy-it-and-sell-it-off-in-4-years owner isn't very likely to do.  And we'd
> rally rather not have the other guy's unfeeling insurance company just
> crunch the numbers and total the car out because "according to the book"
> your car is only worth XXXX dollars,.when we darn well know it's in better
> shape than KBB or NADA can account for.
>
> So Greg, can a victim fight the big bad insurance company and get his baby
> restored to pre-crash condition?  In a perfect world, that is the fair and
> correct thing to do.  Or is it such a big legal battle hassle that it's 
> just
> not worth it and instead you decide to firebomb their office late one 
> night?
>
> Eric
>
> -- 
> No virus found in this outgoing message.
> Checked by AVG Free Edition.
> Version: 7.5.446 / Virus Database: 268.18.12/724 - Release Date: 3/16/2007
> 12:12 PM
>
>
>
> _______________________________________________
> Wichita-SCCA mailing list
> Wichita-SCCA at wichitascca.org
> http://wichitascca.org/mailman/listinfo/wichita-scca_wichitascca.org
> 