1. Why do auto claim settlement offers from insurers often contain errors in valuation?
There are an estimated 440,000 accidents every week across the US, with 76,000 declared total losses, each of which requiring a value to be determined for settlement. Insurers must juggle a fine line between speed and accuracy. It is obvious that a proper appraisal of a specific vehicle is a challenging, time consuming and resource consuming task. However, insurers understand that their policyholders need speedy settlements to get back on the road and back to their busy lives following an unfortunate accident. Because of this, they utilize large Market Valuation Report providers who can meet their high demand for fast turnaround valuations. In order to process thousands of reports each day, these valuation providers use algorithms that pull together samples of what are believed to be similar vehicles and make fixed program adjustments based on what are believed to be the differences between your vehicle and the sample vehicles. For every difference that they correctly or incorrectly identify, and for every difference that they miss entirely, there is a source of potential error. Only for very base vehicles would one expect these algorithms to be fairly accurate on average.
2. Is challenging my insurer’s valuation a contentious process?
Insurers certainly prefer that you simply accept values provided by their preferred estimators, but they should be well aware of the potential for misvaluations. That is in fact the reason behind there being a prescribed method in all contracts for arriving at fair settlements when initial estimates are questionable. Some Auto Claim Specialists clients have in fact been employees at auto insurance carriers. Determining a fair value for your vehicle is an exploratory and fact finding process, not a contentious one. Once the facts are laid out showing how a vehicle was misvalued, insurers inevitably accept the revised value. After all, it is their duty of good faith and fair dealing to fully indemnify their policy holders for damages suffered, and that can only be accomplished when losses are correctly assessed.
3. Why should I use a Public Insurance Adjuster to settle my auto claim?
As licensed Public Insurance Adjusters, we are experienced in negotiating claims with insurance companies. We have teamed up with expert appraisers who are, in our opinion, the best of the best. Together, with the best knowledge and the best negotiating skills, we can ensure a fair settlement of your auto claim.
4. How can you help with my total loss claim settlement?
The driver of total loss settlements is your vehicle’s actual cash value (ACV) at date of loss. A sound current Certified ACV Appraisal helps put us in the driver’s seat in negotiating your claim. Based on provisions in your auto policy, we are able to move the settlement of your claim out of the hands of the insurance company and into the hands of certified appraisers who understand all of the factors that impact your car’s value (CarFax, number of owners, service records, vehicle condition, options, accessories, local market supply and demand, etc.). In addition, the higher settlement that we negotiate gets magnified by the applicable sales tax that you are entitled to recover.
5. How can you help with my partial loss claim settlement?
Examples of partial loss claim disputes are Inherent Diminished Value (IDV) claims and Repair Procedure Loss Dispute claims.
Inherent Diminished Value is the loss in value of a vehicle due to the change in its history status following an accident. Even after a perfect repair, the vehicle will be shown to have been in an accident on its Carfax report which will lower its value relative to other vehicles in the exact same condition but with clean Carfax reports. This is a true economic loss that no insurer voluntarily offers to indemnify, but we are experts in seeing that our clients get made whole for their entire loss following an accident, including the inherent diminished value.
Vehicles must have been produced within the latest 3 model years in order to be eligible for our IDV claim services, and damages must be at least $3,000. Carriers are very reluctant to acknowledge IDV and/or pay an amount justifying adjustor and appraisal expenses for vehicles not meeting these criteria.
For Repair Procedure Loss Dispute Claims, we carefully examine the required OEM Procedures, Operations and Guidelines for repair estimates to restore your vehicle back to its Pre-Wreck OEM condition. As in the case of a total loss, the driver as to how your claim gets settled is the vehicle’s Actual Cash Value. A correct ACV appraisal can alter the entire path of the settlement process. In addition, we research the State Transportation Code regarding your specific repair requirement and review the policy language of your insurance carrier concerning required repairs. Based upon our analysis we construct an exact damage loss model for your anticipated recovery and path to recovery that will make you whole for your loss.
Eligibility for our services for Repair Procedure Loss Dispute Claims is a loss settlement/repair plan of at least $8,000.
6. Will I have any say in the valuation of my car?
The appraisal process involves two professional appraisers agreeing upon a value for your vehicle. The appraisers are required to be independent and unbiased, meaning neither should be influenced by the party they represent, either the insurer or the insured. However, our recommended independent appraisers never agree to an actual cash value settlement without first consulting with our client. This consultation is not to give our client a say in the valuation of their vehicle, but rather to obtain agreement upon whether to settle at a certain value within the reasonable range of values for their vehicle or to take the process to the next step by requesting the involvement of a third appraiser to act as an umpire.
If they expect that you might be able to get an umpire to agree to a higher value for your car that would justify the shared cost of hiring an umpire, your appraiser will disclose that information to you along with offering their advice. But it will ultimately be your choice whether to accept the valuation on the table or take the chance to get more (or perhaps less, as such things are never assured).
We expect the independent appraiser for the insurer to offer a similar level of service to their client. However, when appraisers alter their professional opinion based upon the desires or demands of their client, the appraisal process is no longer independent and unbiased. Our recommended independent appraisers never allow our clients this type of interference in the process, although we have certainly witnessed serious meddling in the appraisal process by many of the carriers. When this occurs, it is almost always beneficial to involve an umpire (or a judge) in order to resolve the case in a reasonable manner for our client.
7. Is there any reason I would need your service if I have purchased GAP protection?
Absolutely. As many insureds find out the hard way, insurance settlements falling short of a vehicle’s Actual Cash Value can leave the borrower with an unexpected remaining balance due after all parties have settled. This is particularly frustrating because the sole reason for purchasing GAP protection is to avoid such a predicament. Please see We (Indirectly) Help GAP Providers for a full explanation of how this can occur. In addition, even if your total loan balance is paid in full following a total loss accident does not mean you were fully indemnified for your loss. For example, if your insurance settlement is $15,000, your loan balance is $16,000 and your GAP Provider pays $1,000, you are still not made whole if your car’s Actual Cash Value on the date of loss was in fact $19,000. In such an instance your primary carrier should have paid your lender $16,000 and paid you an additional $3,000, and there would be no GAP claim at all. We call this type of claim a “Liability Realignment Claim” because that’s what it does – realigns the liability so that each party pays their true fair share, resulting in the insured being made completely whole for their loss.
8. How do you get paid?
In the case where your vehicle has been declared a total loss, if your offer from the obligated insurance carrier appears to be fair, we will inform you upfront for no charge. Otherwise, we will advise you of your options for proceeding forward, including exercising your contractual right to appraisal.
The first step in the appraisal process is obtaining a Certified Appraisal of your vehicle. In order to maximize the opportunity for a successful outcome, we obtain on your behalf a Certified Appraisal from a qualified and professional appraisal firm that meets our standards for approval. We typically pay $450 for a certified appraisal from a licensed appraiser with the sharp skillset necessary to help negotiate a fair valuation when confronted with challenges from the insurer-chosen appraiser. Negotiating fair insurance settlements is always a team effort between the appraisers and adjusters.
Fee Structure for Total Loss Claims: If your vehicle’s appraised value is materially above the carrier’s settlement offer, we will propose to represent you for the cost of the Certified Appraisal plus just 20% of the net added value that gets negotiated (settlement increase less appraisal cost) plus a $20 software fee, with a minimum total charge of $820. Thus, our minimum fee is just $350 ($820 less appraisal cost and software fee).
Additionally, our adjuster fee will never exceed 10% of the total claim regardless of how much we help increase your settlement. So, for example if we increased your settlement from $4,000 to $10,000 and the appraisal cost is $450, resulting in an uncapped fee of $1,130 (20% of the net increase plus $20), we would cap our fee at $1,000 (10% of the $10,000 total claim).
Fee Structure for Eligible Diminished Value Claims**: For diminished value claims, which require much more negotiation time and expense, we charge our cost of appraisals plus 25% of the net negotiated diminished value (negotiated diminished value less appraisal cost) plus a $20 software fee. Appraisal costs are higher ($550) for this claim type since it essentially requires two appraisals – one to value your vehicle prior to the accident and one to value your vehicle following its repair. So, for example, if we negotiate a $4,000 diminished value payout, our portion of the fee would be ($4,000 – $550) * 25%, or $862.50, and the total fee would be $550 + $862.50 + $20, or $1,432.50
**Eligibility requires vehicles produced within the latest 3 model years and damages at least $3,000. Carriers are very reluctant to acknowledge IDV and/or pay an amount justifying adjustor and appraisal expenses for vehicles not meeting these criteria.
Fee Structure for Repair Procedure Claims: This claim type is the most labor and time consuming of all. It requires appraisals for both the Actual Cash Value and the repair plan. With the cost of a Certified Appraisal being $450, the cost of a repair plan appraisal being $250, the total appraisal costs are $700. If you hire us to help get your vehicle repaired correctly according to OEM guidelines at your repair facility of choice, our fee is 8% of the total repair bill capped at 35% of the negotiated increase in the repair claim settlement, plus a $20 software fee.
Thus, if the original repair settlement offer is $12,000, the final cost to bring the vehicle back to its pre-loss condition is $20,000, and we increase the carrier’s settlement offer to $19,800, our fee would be $1,620 (8% of $20,000 is $1,600, 35% of the increase from $12,000 to $19,800 is $2,730, so the lower of the two is $1,600 + $20 software fee). Of that $1,620, $700 is simply reimbursement for our appraisal costs.
If the original repair settlement offer is $21,500, the final cost to bring the vehicle back to its pre-loss condition is $25,000, and we increase the carrier’s settlement offer to $25,000, our fee would be $1,245 (8% of $25,000 is $2,000, 35% of the increase from $21,500 to $25,000 is $1,225, so the lower of the two is $1,225 + $20 software fee). Net of our appraisal and software costs, the public adjuster fee is just $525.
9. Can I trust you to represent my interests in a professional manner?
We are all licensed Public Insurance Adjusters. As such, we have a duty to act solely on the behalf of you, the insured. We have passed rigorous state testing and bonding requirements, and our conduct is regulated and monitored by our respective State Insurance Commissions. Your Auto Claim Specialist is also a specialist in your state’s current insurance laws and regulations pertaining to unfair claim settlement practices, record maintenance requirements, continuing education requirements and so on. We follow the Public Insurance Adjuster Code of Ethics “to a T,” as it is only our PIA license that allows us to legally represent your interests in insurance claim settlements.
10. In which states are you licensed to do business as a Public Insurance Adjuster Agency?
Please refer to the list on our license page. If we are not yet licensed in your state, please contact us. We are happy to add states as needed. Many can be added in a matter of days. A few have more time-consuming requirements.