How can I get enough money to replace my car?
March 24, 2008 9:19 AM   Subscribe

How do I get a fair settlement for my totaled car in Pennsylvania? The insurance adjuster insists that I am not owed the replacement value of my car and refuses to budge.

My neighbor hit a patch of black ice a few weeks ago and struck my unoccupied, parked 1996 Mazda Protege. A few days ago the insurance adjuster (Traveler's insurance) came back with a settlement of about $3300 based on the NADA book value.

I looked around and the Kelley Blue Book value for my car starts at about $3500 and goes up to $4300, with my low mileage car (~49,000 miles) in the upper range. Even cars with twice the miles are retailing at $4000. I've been collecting sales ads for replacement cars due to the good advice in this thread.

The adjuster refuses to budge and insists that I am only owed the NADA value of my car and nothing more in the State of Pennsylvania, even if a replacement vehicle would cost much more. They won't even consider retail prices for equivalent vehicles and were very short with me when I brought up the option.

My insurance (Geico) has been absolutely no help and has left me to take care of this on my own. I'm considering retaining legal counsel, but I don't know how to sort through all of the ambulance chasers. I'm not even sure if it will be worth it for less than $1000 difference.

I've contacted the state insurance bureau, but it will take them a few days to answer my question.

So, how does this work for Pennsylvania? Am I not entitled to the cost of a replacement car? Is the insurance adjuster even telling me the truth about PA law? They're taking the rental car back on Friday so I'd like to have a course of action planned by then.
posted by Alison to Law & Government (11 answers total) 3 users marked this as a favorite
It should state in your policy how the company determines the value of a totaled vehicle. If it doesn't, then I'm betting they can use whatever system they want, I doubt that it is determined by state law.

Whenever I've insured a vehicle that I consider as being worth more than a typical vehicle of it's year/make/model I've negotiated the replacement value in advance of taking out the policy (for example my old '57 Chevy, my low mileage Miata, etc), usually this involves an appraisal by an expert prior to the policy being written.

posted by HuronBob at 1:09 PM on March 24, 2008

I can't answer your specific questions, but do you know the neighbor at all? Talk to them. See if they'll go to bat for you. The insurers are jerking you around and don't care what you think because you're not a customer. They might pay attention to your neighbor and if your neighbor is at all decent (s)he will give them a call. (S)he's the one who owes you a car...
posted by the christopher hundreds at 1:25 PM on March 24, 2008

It should state in your policy how the company determines the value of a totaled vehicle. If it doesn't, then I'm betting they can use whatever system they want, I doubt that it is determined by state law.

But this is the other person's insurer. Alison didn't agree to the terms of that policy and is not bound to accept them. If Alison's neighbor smashed up your '57 Chevy or your low milage Miata and offered you a plate of beans as compensation (per their system), would that be fair? Sure you can get under-insured/uninsured coverage to make up the difference between the beans and the actual value in some instances but those don't apply here.
posted by the christopher hundreds at 1:33 PM on March 24, 2008

Find out your rights. These guys should be able to help. This part of the site states: How much is my insurance company required to pay me if my car is damaged?

Your insurance company is required to pay the amount necessary to return the motor vehicle to its same condition just prior to the damage in question. At your request, you may obtain information from the insurance company regarding repair facilities within a reasonable distance of where the motor vehicle is located and where work will be performed in accordance with the written appraisal. You are not required to use any specific repair shop.

You can also try the Pa. Attorney General's office.
posted by theora55 at 1:47 PM on March 24, 2008

Response by poster: *OP*

My car is really totaled. It needs about $5500 in repairs to get it back to working condition, and most of us know that even with that amount of work it will never be the same.

I got a reply back from the State Insurance Bureau that was pretty informative. There are three methods in the State of Pennsylvania for determining an insurance settlement for a totaled car:

- Guide Source Method-the average retail value using two separate sources (i.e. Red Book, NADA book, CCC, ADP, or other approved valuation

- Actual Cost Method-An appraiser's determination of the actual cost of a vehicle of similar or like kind and quality;

- Dealer Quotation Method- The average of at least two quotations from actual dealers.

The people at Travelers got really pissed off when I used the phrase 'retail price', though it is in the wording of the Guide Source Method, the one they themselves use. They calculate the 'monetary value' based on the average NADA book value and a market survey. This value ends up being well below the retail price, the price I'll have to pay to replace my car.

I explained their calculation methods to the state insurance bureau and they said that it sounded like they are in compliance. There are a bunch of ways to calculate the NADA book value, and I am hung up on the word 'retail' in the state guidelines so I'm interested to see which one they used. Travelers will be sending me a copy of the paperwork they used to value my car and I'll wait to see if I want to file a complaint based on what is written there.

I don't know my neighbor that well and I doubt she would fight for me. She's not a bad person, but she hit several people's cars and some of those people were pretty pissed. We were nice (I swear! We gave her tea!), but when we called her later to double check her insurance information (we wrote it down incorrectly) and she sounded pretty scared. I'd rather not bother her with something I think she'd prefer to forget.

Lastly, I think they take the meanest people available and make them total loss agents. I'm kind of shocked at how many times agents have laughed at me today or completely stonewalled me, just for trying to clarify their valuation methods. I just had to say it. Those people are nasty.
posted by Alison at 2:26 PM on March 24, 2008

you're going to have to take it to the next step. the agent is making it sound like the value of the car was mandated by some kind of law ... but it's their company's law, not the real one. give them a figure they want, and tell them to pay it or face litigation. and if they turn you down, take your neighbor to small claims court.

ultimately, you're not asking for much ... so they'll most likely meet your demand, but they're going to say no a couple of times first. just remember: you can also say no.
posted by lester's sock puppet at 2:34 PM on March 24, 2008

What is your insurance coverage with Geico? Do you have collision coverage? If so, then Geico is responsible for paying for damages. If you don't have collision coverage, then you have to deal with the other insurance company directly.
posted by JackFlash at 3:49 PM on March 24, 2008

I'd rather not bother her with something I think she'd prefer to forget.

If you want to leave her out of it, that's your choice, but remember that she is the one who caused the damage and she is the source of this headache you have to deal with now, not to mention the other neighbors who are no doubt going through the same thing. If I were you I'd let her forget it as soon as she and/or her insurance company got me a new car. It's still her problem at this point and she needs to be reminded (politely) of the fact until you are satisfied with the resolution.
posted by the christopher hundreds at 4:13 PM on March 24, 2008

As a former claims adjuster (but not for Traveler's and not in the Commonwealth of PA), I would look for ads in newspapers for the same car as you had and in the same condition and see how they compare to what you are offered. The company I used to work for would accept such documentation and revise the offer based on that. Another thing that can help your case if to show produce receipts of recent improvements to your car (new tires, new battery, etc.). If you do have tires in decent shape on the totaled car, you can negotiate to retain them, although you probably will have to put some kind of tire on the totaled car. Ask the adjuster how they viewed the condition of your car as their is a big difference in value between Clean and Average and Poor. State that your car was "extra clean". Also a threat to the State Dept of Insurance would work at the company I worked for (there is nothing apparently that the supervisors hated more than filling out the paperwork the State demanded). Good luck.
posted by daneflute at 7:10 PM on March 24, 2008

Have you had any luck?
posted by the christopher hundreds at 9:34 AM on March 27, 2008

Response by poster: Arg. No. They will not even entertain the idea of giving me their fax number so I can send them ads for prices of similar cars.

The paperwork arrived in the mail yesterday. I'm not quite sure how they got their numbers for the market survey, but they left off an aftermarket car alarm and my new set of tires from the estimate. I'll be calling them later today to get them added, but I am not looking forward to being sneered at over the phone just yet.

Luckily, I have a fund for times like these. I don't need the settlement check to buy a new car, so I'm hoping that I'll be able to wait them out.
posted by Alison at 10:28 AM on March 27, 2008

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