Is Your Insurance Settlement Fair?

Viraf Baliwalla, Car Smart Eletter, 2022-11-07, 2022-11-07

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A few months ago, we reported about how to deal with a total loss insurance claim. Hopefully, you never have to however statistics show that it is highly likely that each of us will run into at least one total loss throughout our driving life. After having done well over 100,000 insurance claims on behalf of insurance companies, plus our expertise in the car business, it is safe to say that we are one of the leading experts on total loss insurance claims in the country.

Recently, we had an inquiry from a BC citizen (Robert S.) whose vehicle had been written off. He wanted to ensure that he was getting a fair value from ICBC, the province’s public insurer. Through some internet research, he came upon our website and asked us for a review of his claim. Here was his initial email:

“I will have an insurance claim -- 2018 Mitsubishi Outlander PHEV SE, 63,000 kms, written off -- awaiting info / offer from adjustor want to make sure fair offer is given. Will look to purchase EV like Hyundai IONIQ 5 or Kia EV6. Not set on trim level at this point. Live in Kelowna, BC.”

Simple enough, we asked him to provide us with a copy of his claim report once he heard back from this insurance company. This was part of this settlement correspondence from ICBC:

“We have completed the valuation of your vehicle. The Actual Cash Value (ACV) for your vehicle is $36,966.71 + PST $2,587.67 + GST $1,848.34 = $41,402.72 less Ded $1,000 = $40,402.72. The ACV is the current market value, or what your vehicle would have sold for, in the local market just before the damage happened.”

After a thorough review of ICBC’s insurance report, we provided Robert with our Professional Opinion on the matter and pointed out the gaps in their report, which he then presented to ICBC. It took about six weeks for ICBC to respond but here is Robert’s email to us regarding the result:

“We finally have a settlement from ICBC. Comp #2 that you found was not available was dropped. ICBC also tried to provide an OBO deduction of 3% when they got back to me the second time around. I called it out and they dropped that saying it was added in error as that was something done in 2020 due to the market. We added two other comps. The result is ACV of $40,589.96 + PST + GST for a settlement of $45,460.76. This is $4,000 more than the initial ACV of $36,996.71 or $41,402.72 after tax. Thanks again for all your help. I can't believe it took so long, but it was worth it. I'm shocked by the whole process and how far off ICBC was.”

Well, Robert, insurance companies are in the insurance business, not in the car business. They don’t know or understand the car market. As a result, their numbers aren’t always but certainly could be quite far off from what your vehicle is actually worth. You need to do your homework and present the facts along with the holes in their research to support the higher valuation. To demonstrate this, here are the results of a study we did of 3,198 total loss claims in 2009:

Total Claims In Study 3,192
  Valuation Results
  # Claims %
Virtually the same values: +/- $100 259 8.11%
Insurance Company Overpaid by:
$101 - $299 231 7.24%
$300 - $499 246 7.71%
$500 - $999 445 13.94%
$1,000 - $1,999 475 14.88%
$2,000+ 323 10.12%
  1,720 53.89%
Insurance Company Underpaid by:
$101 - $299 214 6.7%
$300 - $499 188 5.89%
$500 - $999 371 11.62%
$1,000 - $1,999 301 9.43%
$2,000+ 139 4.35%
  1,213 37.99%

While it may seem to somewhat even out to the insurance company, each consumer who was underpaid may not see it the same way.

If you are involved in a total loss, give us a call. We are happy to help.

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