1. Free Legal Help, Legal Forms and Lawyers. TheLaw.com has been providing free legal assistance online since 1995. Our most popular destinations for legal help are below. It only takes a minute to join our legal community!

    Dismiss Notice

Total loss appraisal taking too long - options?

Discussion in 'Automobile & Car Insurance' started by mantonakakis, Apr 6, 2019.

  1. mantonakakis

    mantonakakis Law Topic Starter New Member

    Messages:
    5
    Likes Received:
    0
    Trophy Points:
    1
    Jurisdiction:
    Colorado
    Car was hit by hailstorm in early August 2018. Full coverage, declared a total loss. Insurance company gave a low-ball first settlement offer, which is somewhat understandable, as my car's model is highly sensitive to a few key factors: body style, transmission, and condition; and exacerbated by the fact that they don't come up for sale locally very often.

    The company determined that my car was in "dealer retail" condition (the highest rating), and it has the body style and transmission that demand a premium. However, the first several claims reps refused to consider that might car might be a little trickier to value, and a lot of time was wasted getting them to agree to use comps that matched my vehicle's body style and transmission (eventually aided by the CO Dept of Regulatory Agencies).

    This chapter ended with them making me an offer based on the two cheapest cars available nationwide, which I did not accept, given my car's top-level condition, and the fact that the claims rep made numerous mistakes in his adjustment arithmetic. At this point I had to invoke the appraisal clause, solely due to a 60-day limit in the contract to do so.

    Another 6 months have passed since asking for appraisal, and there is still no resolution, as the appraisers have seemingly struggled to keep up with communication.

    The latest insurance company rep on my claim seems quite reasonable and willing to take the time to understand the market for my model, and I'm fairly confident he and I could come to an agreeable valuation if it was only up to us. However, he claims that is not an option, that since the appraisal clause has been invoked that appraisal is the only way forward. I don't see any language to that effect in the contract, though. Given that my contract had a 60-day deadline to invoke the appraisal clause, and 6 more months have passed, I feel my best course of action is to push for settlement directly between the insurance company and myself. But I don't want to do that if there's merit to the rep's claim that that is not allowable.

    In terms of legal action, I know the size of the dispute is important. The difference between what I believe to be an objectively fair value and their last offer is about $6000. Any advice on any of my options would be greatly appreciated, and I would be happy to share any of the specific language in the contract.
     
  2. adjusterjack

    adjusterjack Super Moderator

    Messages:
    9,303
    Likes Received:
    3,039
    Trophy Points:
    113

    No offense, but everybody, including me, always thinks their car is worth more than it actually is.

    That being said, I don't see any reason why you can't withdraw from the appraisal process (in writing), terminate your appraiser's engagement, pay him off, and then resume negotiations with the adjuster.

    As for legal action, you don't get to sue for just the $6000 (which is within the CO small claims limit) you have to sue for the full amount you are claiming which, I am guessing, is way over the $7500 small claims limit.

    What's the year, make, model, submodel, mileage, features, and pre-loss condition? What was the last offer you got from the adjuster? Maybe upload a copy so I can see all the figures.

    I'll give you an unbiased opinion.
     
  3. mantonakakis

    mantonakakis Law Topic Starter New Member

    Messages:
    5
    Likes Received:
    0
    Trophy Points:
    1
    Thank you for the reply. It's a 2003 BMW M3, coupe, manual transmission. Pre-loss condition was excellent (insurance damage assessor gave it the company's highest condition rating in all areas, "dealer retail"), nearly perfect, with no aftermarket modifications.

    One of the tricky things is the transmission option - the automatic was given the name "sequential manual gearbox" (SMG). This leads to a filtering issue on sites like AutoTrader, where even when the "manual" filter is selected, about half the results are actually SMG.

    Several times in the last month, I have gone through every "manual" listing in the country on AutoTrader and shared the results. Filtering out outliers, such as very low or high mileage vehicles yields an average listing price of $22,000-24,000 each time I have done this, and doesn't really change with outliers included. Their last offer was for about $16,700.

    The insurance company has used a few valuation methods, but regardless of what method is used, if I apply their methodology to the comps I find (e.g. if I use their worst-case rates for mileage/year/whatever adjustment) I always end up in the low-to-mid 20s; I have never seen anything nearly as low as the number they offered, unless I ignore 90+% of listing and cherry-pick pick the two or three cheapest listings in the entire country, in the rust belt/northeast. If instead of adjusting I run some stats on nationwide listings, and use either average or median pricing for my above-average condition loss vehicle, I still arrive in the $21k-24k range depending on search radius and when I run the numbers. I know we tend to overestimate our vehicles' values, but I don't think it's unreasonable to use average or median price for my above-average car.

    Subjectively, I am quite familiar with this market, and have been for a few years as an enthusiast. If I could find a car like mine for $17k, I would buy it in a heartbeat. Examples like mine usually go for low-20s in both my own experience and in the experience of my appraiser (an expert in and broker of more rare BMW models). It's not uncommon to see really excellent examples (like mine but much lower mileage), in the mid 30s.

    Not that it's the ultimate authority or anything, but Hagerty lists the value for a "good" 2003 M3 at $22k and "excellent" at $34.5k today, so I don't think I'm too far off in my understanding of the market. I am absolutely open to changing my position if I'm shown even moderate evidence, but all I've seen to this point overwhelmingly points to the reasonableness of my expected settlement.

    I will upload a spreadsheet shortly with literally every manual coupe nationwide on AutoTrader recently.
     
  4. mantonakakis

    mantonakakis Law Topic Starter New Member

    Messages:
    5
    Likes Received:
    0
    Trophy Points:
    1
    Okay, actually here are a few of my own valuations from different times.

    First, from August 2018, every e46-generation M3 within 100 miles of me, all body styles and transmission options. Average for a manual coupe, $27,244. Average for an SMG coupe, $17,695. Average for SMG convertible, $14,834. Applying all of the insurance company's own adjustments and rates to the two manual coupes, I got an adjusted ACV of $27,019. At that point the insurance company was in the $13k range because they used SMG and/or convertible, and did not adjust for either.

    Second, after I got Colorado DORA involved, the insurance company agreed to use only manual coupes in their valuation, circa Sept. 2018. I let them pick a few cars, then applied their adjustments to every manual coupe I could find within 1000 miles, and got an average adjusted ACV of $22,373. They were at $16,717 at this point, and they had errors in arithmetic (flipped negative sign here or there), and subtracted out 5% for dealer profit. They used cars that were on the east coast, ignoring listings that were more local. They had no response/explanation for ignoring every single comp I provided, and at that point I reached the 60-day mark and invoked the appraisal clause.

    Finally, late March 2019. Every manual and SMG coupe nationwide on AutoTrader, with examples less than 50,000 miles and greater than 150,000 miles excluded to eliminate outliers. Loss vehicle mileage about 117,000. Within 1,000 miles of me, average manual was $22,269, average SMG $18,219. For manual only, median $19,996, 60th percentile $21,792, and 75th percentile $28,221. Adjusting at $0.03/mi (the rate usually used by the insurance company) to the 60th and 75th percentile prices, based on 40th and 25th percentile mileage, gave $20,821 and $27,067 respectively. This was an attempt at quantifying both my vehicle's higher-than-average mileage and higher-than-average condition - maybe not perfect, but better than just picking the cheapest few nationwide listings and/or using SMG or convertible for comps.

    It wouldn't take me long to go through and adjust every listing for year and mileage - I'll do that and update this post with that average.

    Update: late-March listings within 1000 miles at $700/year and $0.03/mi, average ACV $21,476, median $19,969, 60th percentile $20,675, 75th percentile $28,202. Those numbers are within a couple hundred dollars if I use $1200/year adjustment.
     

    Attached Files:

    • M3.zip
      File size:
      38.9 KB
      Views:
      0
    Last edited: Apr 6, 2019
  5. mantonakakis

    mantonakakis Law Topic Starter New Member

    Messages:
    5
    Likes Received:
    0
    Trophy Points:
    1
    Too late to edit, but this should read "several times since filing the claim 8 months ago."
     
  6. adjusterjack

    adjusterjack Super Moderator

    Messages:
    9,303
    Likes Received:
    3,039
    Trophy Points:
    113

    Sorry, but I can see where they are coming from:

    https://www.cars.com/vehicledetail/detail/765705507/overview/

    Used 2003 BMW M3 Coupe 6 Speed Manual for Sale in Brooklyn NY 11218 Brooklyn Auto Sales

    Used BMW M3 For Sale - CarGurus

    Used BMW M3 For Sale - CarGurus

    Used 2003 BMW M3 Coupe Manual on Whittier, CA - Sport Of Cars

    All of those have comparable mileage (or less), have manual transmissions, and (with the exception of maybe Brooklyn) are in rust free climate, and are all well under $20,000.

    Also consider that asking prices are almost invariably higher than selling prices.

    You might be able to push your settlement to $17K to $18K but based on what's available I don't think you will get more than that.
     
  7. mantonakakis

    mantonakakis Law Topic Starter New Member

    Messages:
    5
    Likes Received:
    0
    Trophy Points:
    1
    The thing is, only the second listing is actually a manual, despite all being listed as such - and that's the exact trouble I've been facing. (You can tell by the shifter, SMG/auto has a shorter lever with chrome/silver accents and no leather boot). The last listing doesn't seem to still be available, and doesn't have any extra photos or a VIN to check, but for the price I would bet it was SMG.

    The only definitely-manual car is by far the highest priced.
     
  8. adjusterjack

    adjusterjack Super Moderator

    Messages:
    9,303
    Likes Received:
    3,039
    Trophy Points:
    113

    If there's one there will be more.

    Show that one to the adjuster and ask for $17,999 plus tax and license and see how that goes.
     

Share This Page