Thursday, May 23, 2013

STATE FARM INSURANCE COMPANY AND AUTOMOBILE DIMINISHED VALUE

STATE FARM INSURANCE COMPANY AND AUTOMOBILE DIMINISHED VALUE

FORT PIERCE, Florida - Do you own a late model car that was damaged in a collision that was a result of someone else's carelessness? Of course most of us are aware that, even though our automobiles were repaired to perfection, that they are now worth a lot less because of the bad Carfax and other Vehicle History Reports that are now permanently attached to them. When you call The St. Lucie Appraisal Co. for an automobile diminished value report, you have questions. But that's not all - most of you also have some astonishing tales to tell. And it's hard not to share your outrage after hearing some of these stories. In this article we'll look more closely into some recent State Farm Insurance Company claim practices that certainly got my attention.
In the first instance, a claimant in Florida filed an automobile diminished value claim against State Farm after her 2010 Nissan Versa was repaired. The vehicle had a pre-accident trade-in value of $8,750.00, repairs were approximately $5,600.00 and State Farm's file handler offered the claimant $700.00 for diminished value. The offer was based on a report compiled by an independent appraisal company hired by State Farm to evaluate the claim. St. Lucie Appraisal's automobile diminished value report, based entirely on verifiable dealer quotes, resulted in a loss of value of $2,400.00. State Farm's file handler told the claimant that automobile diminished value settlement figures over $2,000.00 were typically for Porsches and BMWs.
Two things became apparent after further examination of their document; that State Farm hired an unlicensed appraiser to prepare their report and that the appraiser's diminished value figure of $700.00 was based on nothing at all. At least nothing that was visible on his report. There were no quotes from auto dealers, no auction results, not even a formula that would explain how he arrived at the figure.
Florida Statutes 626.855 defines a “RESIDENT INDEPENDENT ADJUSTER” as any person who is self-employed or is associated with or employed by an independent adjusting firm or other independent adjuster, and who undertakes on behalf of an insurer to ascertain and determine to amount of the claim, loss, or damage payable under an insurance contract or undertakes to effect settlement of such claim, loss or damage. A 5-20 All Lines Adjuster's license is a requirement for appraisers who perform such tasks as obtaining agreed repair prices and diminished value settlement amounts. What would possess State Farm to make such a questionable choice? During my conversation with State Farm's file handler, I asked him to explain how his independent appraiser arrived at the $700.00 figure. After perusing the report, he had to concede that he didn't know. I also took the liberty of correcting his statement to the claimant, as if he wasn't already aware, that Porsche and BMW diminished value figures reach well into the tens of thousands of dollars.
The second instance involves a different unlicensed appraiser. A claimant in Florida brought her damaged vehicle, a 2011 Honda Pilot, to a State Farm-approved auto body shop that is part of a Honda dealership. The vehicle had a pre-accident trade-in value of $27,500.00, repairs were approximately $10,500.00 and State Farm's file handler offered the claimant $900.00 for diminished value based on a report from the same appraisal company referenced above. Our automobile diminished value report, again based entirely on verifiable dealer quotes, resulted in a loss of value of $5,600.00.
The body shop manager, who ostensibly represents State Farm, gave the claimant's contact information to yet another independent appraiser who called the claimant and offered to work on their behalf preparing an automobile diminished value report. Even after the claimant refused his solicitations, he continued to call. Why would a vehicle owner rely on his impartiality, having been recommended by a representative of the insurer? Once again, the appraiser in this case is not properly licensed in the State of Florida.
A question of collusion exists in this scenario and raises questions about how State Farm approaches automobile diminished value claims in general. Similar scenarios are being played out in all 50 states. Every insurance company is concerned with cost containment both in claim payments and claim handling expenses. How inexpensively can appraisers prepare automobile diminished value reports that show no research data? If what I saw is all there is, St. Lucie Appraisal could churn out hundreds of them every day for about twenty dollars apiece. The sad fact is that car owners faced with huge losses after collision repairs are playing against a stacked deck. Misinformation and low-ball appraisals from unqualified vendors seem to be the rule of thumb at State Farm but at least the situation has improved from when the insurer refused to recognize the existence of diminished value at all.


paypal payment button The fee for an Automobile Diminished Value Report is $275.00. You may also make your Credit Card Payment by telephone, call 772-359-4300. Credit card payments can be made on the PayPal page. Click on "Don't have a PayPal account?" to be taken to the secure credit card payment page. 

After making your secure payment please email the body shop estimate or the insurance company appraisal to contact@stlucieappraisal.net or FAX to 772-466-8400.

NOTE: TESLA OR OTHER EXOTIC CAR OWNERS PLEASE CALL 772-359-4300 TO ARRANGE FOR AN AUTOMOBILE DIMINISHED VALUE APPRAISAL.