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Smart Shopper Questions About Auto Insurance & Accidents
4410 messages, Last post on Nov 29, 2009 at 5:58 AM
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Replying to: Mr_Shiftright (Aug 19, 2007 5:43 pm) 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. |
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Replying to: cccompson (Aug 20, 2007 1:20 pm) 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".
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Replying to: Mr_Shiftright (Aug 20, 2007 1:52 pm) 
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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...
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Replying to: marsha7 (Aug 20, 2007 6:01 pm)
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Replying to: cccompson (Aug 20, 2007 1:20 pm) 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."
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Replying to: oldfarmer50 (Aug 21, 2007 2:11 am) 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. |
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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
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Replying to: dvexpert (Aug 25, 2007 5:07 pm) 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. |
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Replying to: dvexpert (Aug 25, 2007 5:07 pm) Just why Nationwide took this stance (you said "all" insurance companies pay such claims in Ohio) is unknown. |
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