Is Your Insurance Company Lying To You?

Written By Viraf Baliwalla, 2023-11-22

ICBC Total Loss Settlement Offer Overturned; BC Policyholder Awarded 77% Higher Settlement For Her Vehicle

Megan Smeth of Salt Spring Island, BC was involved in a vehicle accident on Dec 5, 2022. Her 2003 Chevy Suburban with 320,000 km was deemed a total loss by ICBC (the Insurance Corporation of British Columbia), the province’s public insurer. After two long months, she was finally contacted by her adjuster who advised that her vehicle was deemed a total loss and worth only $6,850.63 plus taxes. Smeth wanted to keep the vehicle for parts so her adjuster advised her that the salvage value would be $800. Her total settlement after deductible would be $6572.70. Smeth rejected the value, feeling it was too low. However, the adjuster stated that "the value was not a negotiation, nor an offer, it is fair market value".

Smeth advised the adjuster that she would do some of her own research, to which she was told "ICBC does not accept ads (from policyholders to demonstrate market value); ICBC conducted the research and confirmed that this value is fair and reflective of the market based on what your vehicle's condition and mileage was. What you choose to replace your vehicle with is your choice."

Not satisfied with that response, Smeth surfed the web in search for assistance from a claims consultant and found Automall Network, a licensed auto dealer/broker who specializes in helping the public with total loss claims. The first step Automall Network instructed Smeth to do was to request a full copy of the insurance company’s settlement report with the comparable vehicles used to arrive at the settlement offer. Instead of sending the full report, the adjuster only sent the first summary page claiming that is all she had access to. When pressed further, the adjuster relented and sent the full six page report.

"Just doing a quick review, I found several holes in the insurance company’s research" says Viraf Baliwalla, President of Automall Network and a consumer advocate. "It was quite obvious to anyone who knows the total loss process that the settlement offer was low".

"I had never been through a situation like this before so had no idea of what to expect or how to deal with it" says Smeth. "I didn’t know what my rights or options were. I didn’t know whether I had a leg to stand on. It was quite intimidating, especially going up against the government, so I knew I would need help. Viraf walked me through my rights and my options and gave me the confidence to fight back.

"So I took a chance and retained Automall Network’s services to do a deeper dive into the insurance company’s settlement offer and come up with their own professional opinion of what my vehicle was actually worth."

After presenting Automall Network’s True Market Value™ Report to her adjuster with comparable vehicle ads from multiple classifieds sites, the adjuster reiterated that ICBC was allowed to use publicly advertised vehicle ads to come up with their settlement offer, however "ICBC does not accept ads for disputes. The values are derived from market research by an independent valuation company and are not negotiable."

"You cannot be forced to accept a low-ball offer from your insurance company, even if it is a government insurer", says Baliwalla. "Most people don’t know that there is a system of checks and balances to ensure that the public is being treated fairly.

"Everyone has a right to dispute an offer, so long as they can properly back it up with the right data and expertise. You cannot just say that you ‘feel’ it is worth more but you also don’t have to just take it on the chin" adds Baliwalla, who has been an expert witness in court and a neutral umpire in prior total loss disputes and has trained and provided settlement valuation services to many insurance companies for almost 20 years.

According to ICBC’s guidelines published on their website, in the event of dispute with your adjuster, you must first request to speak to their Supervisor, followed by a Manager. If still no satisfactory resolution can be reached, the claim must go through independent arbitration with the Alternate Dispute Resolution Institute of Canada (ADRIC), the costs of which are shared between ICBC and the policyholder.

"The process in BC takes approximately 3 months to arbitrate. Similar processes exist in all the provinces and US states but are much faster in private insurer regions such as Ontario" says Baliwalla, whose business is situated in Toronto but deals nationwide.

So Smeth started her dispute journey. She first requested to speak to a supervisor. Three weeks later after having to follow up, a supervisor finally called and reinforced the adjuster’s position. As per the ICBC guidelines, Smeth then requested to speak to a claims manager. Another three weeks and a follow up email later, a manager finally connected with her, had a conference call with Smeth and Baliwalla, however stated that he had not reviewed the file which he claimed was not on the ICBC system. It was then resent to him by Smeth. After review, he came back with a somewhat sweetened offer for the vehicle but also had raised the salvage charges to Smeth from $800 to $1790 to help offset the increase.

Totally frustrated, Smeth decided to go to arbitration.

"It was now a matter of principle. I had felt totally bullied throughout the whole process. It was now August, eight months had passed because of their delays, and I felt they still weren’t being fair. So I decided to go all the way" says Smeth.

After reviewing all submissions from both ICBC and Smeth, the arbitrator found in Smeth’s favour and awarded her a total of $11,635.04 based primarily on Automall Network’s explanations and data, an increase of 77% from the original ICBC offer.

"The insurance settlement process is broken" claims Baliwalla. "It is sad that ICBC tried to use their leverage and position of power unfairly. But they didn’t know who they were dealing with. Most people are under a great deal of pressure at a time like this. Normally, the insurer threatens to pull the rental soon after a settlement offer is presented, which is a pressure tactic to force a quick acceptance of the settlement offer. Luckily, Ms. Smeth was able to do without a replacement vehicle for an extended period or else she would not have been able to pay for even a lower value replacement vehicle unless she succumbed to their low-ball value. If she had accepted, it would have dramatically affected the level of vehicle she could replace with. And if she had financed, luckily she didn’t, but the settlement may not have covered what was owed so she would have to come up with the difference out of pocket. It could completely impact one’s lifestyle" Baliwalla adds.

"I pay high premiums already to protect me in the event that something bad happens. ICBC has an obligation to taxpayers to treat us fairly. I shouldn’t have to undergo high pressure negotiations or even arbitration to get a fair settlement. Imagine if I was a senior or a newcomer to this country. What does this say about the province I call home?", adds Smeth.

Automall Network is a licensed auto dealer/broker that specializes in championing the rights of consumers and helping people get a fair settlement amount in the event of a total loss. Having provided valuation services to many of the nation’s insurance companies for almost 20 years, they now provide their expertise and services to help the public, starting with a no charge review of the initial settlement offer.