Total Loss Disputes with Insurance Companies

The predominant company providing total loss valuations or, as they call them, Market Valuation Reports to insurance companies such as Allstate, State Farm, Liberty Mutual, AAA, Hartford, Auto-Owner’s, Progressive, Farmers, GEICO, USAA and others is called CCC Information Services. You were involved in a collision and your car was deemed a total loss. Did you receive an unfair settlement offer? Here are many of the reasons why and some of the things that you can do about it. The St. Lucie Appraisal Company has been involved in insurance company vs.claimant disputes for years. When the insurance company is not your own carrier, the odds are greater that you’ll be low-balled. However, being a loyal policy holder of long-standing doesn’t guarantee fair treatment from the company to whom you’ve dutifully paid premiums to year after year.

As an example, St. Lucie Appraisal was hired by a woman in Virginia who owned a 2001 Lexus GS 300 (not the vehicle pictured) which was insured by Allstate and suffered collision damages that exceeded the value of the car. This rendered the vehicle a total loss.¬† After the car was towed to a salvage yard, an Allstate appraiser inspected the Lexus, made his notes as to the car’s odometer, options and overall condition. The appraiser’s only deduction was $481.00 for various dings in the car’s body. The assignment to place a value on the insured’s car was then given to CCC Information Services.

CCC is an independent company providing vehicle valuation services to insurance companies. Their method is to locate similar vehicles  and use their selling prices to arrive at a value comparable to that of your car. In addition to obtaining these comparables, however, CCC takes it upon themselves to impose other variables into the mix.

When our customer contacted us, the first thing I asked was whether she agreed or disagreed with the appraiser’s $481.00 deduction for the body damages. My reason for initially asking all of our clients this question is because we generally don’t need to physically inspect these cars as long as there is no disagreement over the old damage deduction taken by the appraiser. Once it was established she was in agreement with their deduction, we accepted the assignment to place a retail value on the vehicle.

NADA Valuation Guide, the leading source for vehicle valuations, placed a clean retail value on this car of $7,700.00.

Our valuation, based on 11 comparables and taking into consideration the $481.00 deduction and an additional deduction of $75.00 for dealer prep (clean-up) came to $7,384.20.

CCC’s report, however, estimated that the 2001 Lexus was worth only $6,792.80. The most glaring and egregious deduction taken by CCC was $941.00 for what they termed “condition adjustment,” AKA dealer prep or clean-up.

Our customer sent the St. Lucie Appraisal total loss evaluation to Allstate. What followed was an endless trail of correspondences between our customer and the insurance adjuster who offered excuse after excuse as to why they could not budge from their settlement offer.

First, the adjuster noted that the comparable vehicles in our report were located throughout the country which was unacceptable. Allstate wanted us to use only local comps. However, upon reviewing the CCC report, I found that their comparable vehicles were located in places like Washington (state), Illinois, Kentucky, Vermont, New York and New Jersey – hardly places you’d deem local to Virginia.

Second, the Allstate adjuster told our customer that the vehicle would have to be physically inspected by a “certified” appraiser. Since we were in agreement with the old damage deduction, there was no practical reason to make a physical inspection of the car. We are state-licensed adjusters and appraisers. This designation carries with it a great deal of responsibility, not to mention credibility. In addition the background checks and the initial education and testing necessary to achieve this status, there are continuing education courses that one must attend in order to remain in good standing. And most importantly, should a state-licensed appraiser be found guilty of any infraction such as fraudulent activity or unfair claim practices, he or she can say goodbye to their license.

Do a Google search for “certified automobile appraiser” and you’ll find a number of scammers, some of whom have declared themselves as certified while others are merely organizations that accept yearly dues for which they deem appraisers to be certified. Unlike state-licensed appraisers, there is no punishment or expulsion from the organization if they are found guilty of fraud or other unlawful activities.

Third, CCC’s condition adjustment of $941.00 wasn’t based on anything reported by Allstate’s appraiser. I called CCC and was informed that, on every vehicle evaluation they prepare, they deduct from $600.00 to $1,600.00 for condition adjustment based solely on year, make and model. When queried further, CCC’s representative explained that the condition adjustment represented the amount of money dealers typically spend to prepare trade-in vehicles for resale on their lots. This presented a bit of a problem for me. Many total loss vehicles are in better-than-showroom condition yet CCC will still arbitrarily deduct significant amounts from their evaluations just because “that is the way they do it.” It would be justifiable if their deductions were based on comments or observations made by the appraiser who inspected the car but that’s not the case. CCC takes the deductions automatically from each and every car they evaluate.

As I mentioned, our practice is to deduct a standard $75.00 for dealer prep (condition adjustment) although sometimes, if a car is really filthy we’ll deduct $125.00 for excessive clean-up. The $941.00 deduction, however, was simply off the charts. As a concession to the insurer, I decided to call a couple of Lexus dealers in Virginia and Maryland to ask their detailing department how much actual time they spend on prepping a car for resale. One dealer said “two to three hours” while the other said “three hours.” Hardly anywhere close to the $941.00 that CCC was charging our customer. Of course, I provided a record of my calls to the Allstate adjuster and, of course, the Allstate adjuster still refused to budge.

Fourth – Each one of CCCs comparables were taken from dealer advertisements, hence, their “need” to make the condition adjustment from Private Party vehicle to Dealer vehicle. Our suggestion to the insured – request that Allstate ask CCC to re-do their valuation using only Private Party comparables, thereby eliminating the $941.00 conditioning charge. CCC responded that they did not have the capability to prepare such a report. The alternative for Allstate would be to hire a different company to prepare the total loss evaluation – one who would prepare it based on Private Party comparables.

Not all insurance companies play fair. This goes for diminished value claims and loss of use claims in addition to simple matters involving total losses. If your insurance company will be using CCC Information Services to prepare the valuation reports for your car after a total loss, you might want to consider obtaining your own valuation appraisal.

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