The Art of Adjusting® Podcast
Dive deep into the world of insurance claims with our podcast, newly rebranded as "The Art of Adjusting®"—a title echoing the revered book of the same name. This revamped podcast is not just a beacon for professionals navigating the adjuster landscape but also a wealth of insights for those curious about the intricacies of the industry.
We're thrilled to announce that Bill Auten, owner of Auten Claims Management, will now share the mic with a stellar co-host, Chantal Roberts. Chantal isn’t just the brilliant mind behind the book 'The Art of Adjusting®'; she's also the powerhouse owner of CMR Consulting. Together, this dynamic pair will decode the complexities of various claims, from property and auto to liability and workers’ compensation, providing unmatched expertise and invaluable insights for our listeners.
In our recent episodes, we've explored a range of riveting topics, offering a deep dive into the technicalities of claims, showcasing transformational journeys within the industry, and illuminating the art and science of policy decoding and investigation. Special guests, including industry veterans like Steve Frattare, have graced our platform to share their extensive knowledge and experience, shedding light on a multitude of areas within the claims adjusting world.
Subscribe to “The Art of Adjusting®” to keep abreast of the evolving landscape of insurance claims. Share our treasure trove of episodes with colleagues, friends, and anyone with an appetite for understanding the captivating, multifaceted world of claims adjusting.
For more insights, you might consider a career in liability adjusting or if you're searching for reliable adjusting services:
Visit: Auten Claims Management
To explore more about Chantal Roberts and her contributions to the industry, visit:
Visit: CMR Consulting
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- Once Upon a Claim: Explore the magical world of claims adjusting through fairy tales. Get your copy now.
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The Art of Adjusting® Podcast
Episode #64: Dents and Dollars: The Real Impact of Hail on Your Vehicle
When the sky pelts your vehicle with ice, the damage goes far beyond cosmetic dents—it triggers a cascade of insurance decisions that could impact your wallet for years to come. In this comprehensive guide to automotive hail damage claims, Bill and Chantel tackle the complex world of total loss declarations, salvage titles, and diminished value from the insider perspective of experienced adjusters.
The conversation dives deep into the mysterious "70-75% rule" that insurance companies use to determine when your dented but perfectly drivable vehicle crosses the threshold into total loss territory. You'll learn why this seemingly arbitrary percentage exists, how different states regulate it, and what options remain when your car is deemed "totaled" despite being mechanically sound.
Salvage titles represent another crucial piece of the hail damage puzzle. Bill and Chantel walk through the entire process—from initial damage assessment to title conversion through your state's DMV—explaining how this designation affects your ability to drive, sell, or insure your vehicle moving forward. Their candid discussion highlights the frustrating reality that cosmetically damaged but functionally perfect vehicles must carry this stigma.
Perhaps most valuable is their examination of diminished value claims—the often-overlooked financial loss that occurs when your vehicle's market value drops simply because it has damage history, even after perfect repairs. The hosts explore the evolution of these claims, why insurance companies have historically resisted them, and how today's information-rich environment has forced the industry to acknowledge this economic reality.
The episode features fascinating real-world examples, including a massive seven-dealership claim with a $3 million deductible where Ferrari and Maserati inventory received priority protection while everyday vehicles faced nature's wrath. Special considerations for leased vehicles round out this essential guide for anyone who parks their car under the open sky.
Want to protect yourself before the next storm hits? Subscribe to The Art of Adjusting podcast for more insider knowledge from experienced claims professionals who understand both sides of the insurance equation.
For more insights, you might consider a career in liability adjusting or if you're searching for reliable adjusting services, visit Auten Claims Management.
To explore more about Chantal Roberts and her contributions to the industry, visit CMR Consulting.
Promotions:
- Once Upon a Claim: Explore the magical world of claims adjusting through fairy tales. Get your copy now.
- The Art of Adjusting®: Master the art of claims adjusting with practical insights and expert advice. Purchase here.
Hello, I'm Bill Auten of Auten Claims Management.
Speaker 2:I'm Chantel Roberts of CMR Consulting and welcome to the Art of Adjusting podcast.
Speaker 1:Today we're going to talk about life as an insurance adjuster from the perspective of property, auto liability or workers' compensation adjusters. Our goal is to bring interesting topics in the world of claims adjusting to people who are working as an adjuster now and to people who are considering a career as a claims adjuster. Hey Chantel, how are you?
Speaker 2:I'm doing well.
Speaker 1:How are you? I'm doing pretty good the weather. Check in on the weather here we got some warm you look very springy.
Speaker 2:I know I'm loving it.
Speaker 1:I know I've got the attitude but not the temperature. We are 21 degrees today and it looks, but we're going to have some days in the 50s and some melting, which is good. The ice dam phase is kind of over. It doesn't mean the claims are done, but I think if you're in first party property in this region, you're still fielding some ice dam claims Because we had probably a foot or two of snow on all the roofs and then it got warm and then here it comes right.
Speaker 2:Oh, my God.
Speaker 1:Yeah, so that's the situation here. How about you?
Speaker 2:Yeah, we are slowly but surely getting warmer. Uh, I've got to tell you I am a little upset because you know we have done our, or we're. I guess we're getting into march madness and all this. So you know, your spring is coming. Blah, blah, blah and aaron and I will be going. By the time that this episode airs, we've would have already gone up to Sioux Falls, north Dakota, or South Dakota, south Dakota, I have no idea, it's a Dakota.
Speaker 2:You know, it's one of the Dakotas anyway, um, to watch our basketball team who has done poorly this year, and it's supposed to snow up there, and I'm like, really, guys, because you know again, I'm from arkansas my cousins are already planting like cabbage and stuff, and so it it's like killing me.
Speaker 1:you're killing me smalls well, what are you gonna do? I mean, I think the groundhog uh, the groundhog did see his shadow, I think you know, I'm thinking about contracting a hit on film, that's, that's all I'm saying.
Speaker 2:Um, and I'm just thinking about it, since it's, you know, on recording whatever. I'm not saying that I'm gonna do it, but we know where to look if something you know, yes, so I just want to ask you, uh bill, what the hail are we going to be talking about today?
Speaker 1:Well, the weather's changing, as we've discussed, and when that happens you get movement of air masses in weird ways all over the country. We get a lot of wind. Here in the Midwest, you tend to get a lot of hail. Well, hail can hit anywhere really, but, um, it seems like. It seems like most of the hail claims come from your neck of the woods.
Speaker 2:Yeah, I would. I would say it's kind of like with the tornado alley, isn't it? And I mean the. Midwest uh is tornado alley, as we're used to it in Arkansas, too, where we're like. We're used to it in Arkansas, too, where we're like here hold my beer.
Speaker 1:I'm going to go outside and watch this tornado. Yeah, yeah, we don't get the hail like the golf ball sized hail here. Necessarily, sometimes you'll have a weird event where that'll happen and um, and of course you'll get all the roofers that move into town to take advantage of that. But no, where the places that get hit really hard, they'll have. You know, the auto companies will have kiosks set up for drive-through service to evaluate hail damage to your car, and I think that's primarily what we're going to talk about today, and we might talk about damage to buildings and homes next episode.
Speaker 2:Yeah, so I thought that for March, which is when we usually see hail damage I mean, you know, it can really happen anytime, especially in this tornado alley kind of area but I thought it would be good to talk about our hail damage and I can't say that I thought of this all by myself. One of our six listeners, dave, hi, dave.
Speaker 1:Hi Dave.
Speaker 2:Gave us the topics of hail, hail damage to vehicles, which is what we're going to be talking about today, and then next episode because I thought we'd split it up is going to be hail damage to homes, and that will talk about splitting up that idea. Well, it will talk about the idea of do we only cover for half of the roof? You know where that line of sight is, or something. Do we have to?
Speaker 2:put new siding on the entire thing, or new roof on the entire roof, and there's that florida law. We'll all explain all of that in like three weeks or something.
Speaker 1:I don't know something like two weeks, two weeks from today oh yeah, two weeks of today. Yeah, I guess we pre-recorded these, by the way amazing there's. That is like pulling aside the little curtain for all of you secret and by the time this actually airs, the weather might be completely different here, but I chose to wear green today because saint Patrick's Day is going to be just a few days after this episode.
Speaker 2:Yeah, so four days. I totally didn't think about that.
Speaker 1:Well, top of the morning to you.
Speaker 2:Well, I know what can I do, what can I say. I'm just not prepared, although I have all the topics picked for this this year already.
Speaker 1:You are. You are a genius, I am a planner.
Speaker 2:I'm a nester and a planner.
Speaker 1:Thank you for that.
Speaker 2:So one of the first questions I think comes down to is, when we're looking at hail damage, you know, how do we know if it's a total loss? What happens if it's a total loss? What's the formula for a total loss and I don't think it matters necessarily for hail damage versus just a regular collision or comprehensive claim. I don't think that really matters one way or the other what the quote unquote cause of the damage is. What do you think?
Speaker 1:Each carrier will have their own kind of protocols as to when a vehicle is deemed to be a total loss and I would say it can be problematic, especially in terms of hail damage. So if you've got enough hail damage where the to repair that car and make it um, good as new or good as it was prior to the hail damage, um, may be enough, may cost enough to total that car out, but that car can still roll down the road and drive and function just like it did the day before the hail in most cases, and it's all cosmetic. So when you've got a total loss, when you've got a car that's been in a collision and is deemed a total loss and you choose to take a salvage title, meaning that you're not going to put the car into a junkyard and take the money You're actually going to keep the car and use it every day and fix it up and use it every day. So when you have a collision claim, a collision loss, there's an argument to be made that that car is probably less safe now because it's been repaired, depending on what happened to it then uh, prior to the damage versus a hail claim where really all you have is a bunch of dents in the hood and the roof and the trunk.
Speaker 1:That is a different scenario and and that doesn't necessarily mean it's a dangerous vehicle anymore. Yet it's been deemed a total loss and you have to take a salvage title and you know registering that vehicle? I don't. I wish I knew the laws with registering a salvage title. I have no idea, but there's something in my head that suggests that it's a little difficult to get a salvage title and it's because there's safety issues that could be in play. Are you familiar with any of that?
Speaker 2:there's safety issues that could be in play. Are you familiar with any of that? Well, yes and no, we used to do it quite a bit. Well, I would say quite a bit, quote unquote but when we were handling trucks and they wanted to necessarily keep those trucks or whatever, we would give them salvage titles if they wanted to get it, and they were total losses and our administration department would do that actually, and it goes back to contacting that state's department of motor vehicles. So it would be something and I know that a lot of carriers have these where a particular unit does nothing but total losses, like that is all the adjuster does. So that adjuster.
Speaker 2:The total loss adjuster would probably be the go-to person on that, as opposed to someone like you and me who would be an independent multi-lined. We handle a lot of things. We're kind of like the jack of all trades, master of none. We know a little bit about everything, which is why we can hold ourselves out to be experts in this little podcast here. But yeah, so it was difficult in the fact that we had to get the original lien-free title. Then we would send off and we would do this regardless, even if it wasn't a total loss, like if we were paying off someone. Paying off that sounds bad to go with Phil and you know um putting out a hit on them or something. God, this this episode is dark.
Speaker 1:We'll fix your car, but you got to take care of that groundhog.
Speaker 2:He needs to sleep with the fishes. Uh, anyway, squirrel, we. We would go in and we'd get the title after we paid off the lien holder and we'd get the title, turn it into the Department of Motor Vehicles, get the clean title and send that off to the insured. When it was a total loss we would still do that. We would get the title from the lien holder, paying the lien holder off and we would go ahead and send that if it was a total loss, you know, to the salvor, whoever would buy that, like the tow company or whomever, or if it was a uh, the owner, the insured who wanted it, we would get it converted over into a salvage title. And it took a couple of weeks and by a couple of weeks with the Department of Motor Vehicles, depending on what state, it was three to six weeks to do and it does have like a different color to it, the salvage title.
Speaker 2:It will say in great big letters salvage. And of course, as you know, with insurance companies and with us, you should at least be doing your ISO or ISO checks. You can do VIN checks, of course, to see if cars have been in accidents. Iso will usually put that, because if you type in all of the information and I know it's laborious to type in all of the information, but it's really good practice to do that to put in the VIN. You can see how many times also that truck or car or whatever has been in an accident. As opposed or in addition to going to like Carfax or something to that effect. So it's not bad, it's not hard, it's just it's kind of laborious because there's a little extra steps to it by going to the Department of Motor Vehicles in that particular state and getting a salvage title.
Speaker 1:And I've come across situations where the policyholder implores the insurance company partially because they don't want to have to go through the effort of getting a salvage title then and then having to drive around a car that that is kind of, you know, marked um as a salvage. But I think the main purpose of the salvage title is to make sure that you're not selling a car to someone and misrepresenting that it, you know, never was in a serious damage situation.
Speaker 2:That is exactly it, yeah yeah. It is to kind of help protect future people or future buyers.
Speaker 1:But back to hail damage. Like I say that, the safety issues are really non-existent with a hail damaged car, you've got an ugly vehicle now, yes, a vehicle with character, but it is. I really don't. I'm not an expert in that field. Chris Stanley is the guy. We want to actually talk to. Chris, if you're out there, um, you're the guy.
Speaker 2:Why didn't we ask him, if you? Don't know, I don't know I mean, I know I plan these things, but I don't.
Speaker 1:I tell you I know everything, but I don't Well shout out to Chris Stanley he's, he's, he runs the IA Path. It's a training program and his background is auto appraisals and he's a great guy.
Speaker 2:We should just have him on anyway.
Speaker 1:We should. Yeah, yeah, and he has a podcast too. I think it's IA Path, I think. Okay, all right. Anyway, shout out to Chris. He would probably have a lot of good answers for us on these questions, but I don't think that there are any safety issues. I mean, you could maybe tail lamps or headlights if they're damaged, of course you can, I think, fix those yeah.
Speaker 2:When you're talking about a diminution of value, and we'll kind of get into that. But you're right, it is something that is usually mechanical. So I would say the formula for for totaling that vehicle is is a little bit different, like you said, because it's mostly quote, unquote, cosmetic and yeah, and and, of course, cosmetic in this particular instance means we could pop out the dents. Maybe we have to repaint it or something, I don't know.
Speaker 2:It just depends kind of deal Replace body panels Maybe, but it's not going to be like an honest to goodness fender bender where our crash pad, our bumpers, are crushed in and we may have frame damage, or that could be the concern.
Speaker 1:Airbags deployed. They usually don't deploy in a hail situation, maybe a Hail Mary situation.
Speaker 2:Yeah, now, you know I have worked quite a few hail climbs. You know I have worked quite a few hail claims. One of the biggest that I did was a seven vehicle car lot, or seven, seven car lots. It was one insured, of course. It was with Lloyd's of London, naturally, and their deductible was $3 million. But they did have a Ferrari and like Maserati dealership and it was rather interesting because when they knew that the hailstorm was coming, they started moving those cars that were on the lot inside like anywhere they could and and even to some of the sister lots to save those cars, while the I don't know Toyotas or Hyundais or whatever it was I don't even remember by this point, I just remember the, the really rich cars because they were nice uh, stayed out. And I remember having to call my boss in London and ask for like $6 million and he said, yeah, but there's a $3 million deductible. And I'm like, yeah, I know that was taken into consideration because there's a lot of cars here.
Speaker 2:Yeah, so, in one of the things that we had to be looking at was what was a total loss in that state, and which was Oklahoma in this particular instance, and what the policy considered to be a total loss because there was a whole methodology of figuring out how to settle this particular claim. Usually we would pay with auto claims, actual cash value for repairs, little carrot to the insured. They paid like 70% of. It was kind of like a RCV ACV instance. They would pay like 70% of the damages and then once the car got repaired they would release the other 30%. But this 70% number is sometimes like your quote unquote, magical number.
Speaker 1:I say quote unquote a lot today I don't know, yeah, quote unquote Is that policy or that procedure only used for hail damage?
Speaker 2:No, I think it's used mostly for any kind of, and sometimes it's 75, don't get me wrong.
Speaker 1:Well, what I mean is where they they'll pay 70% of the repairs.
Speaker 2:Oh, I think that was just that one particular policy, because there were seven dealerships under this umbrella, because a lot of times when there are dealerships who have had a hail event, they will offer a hail sale. I'm going to say that three times fast. So where they will knock off I don't know $10,000 or however many dollars off of it to try to get this damaged product off of their books. And so I think that's the reason why the underwriters in this particular instance wanted to pay 70% instead of the full value. What would happen if the insured the car dealership for this instance got paid 100 percent of the car damage or the physical damage to the car and then immediately turned around and sold it? Well, they're kind of getting.
Speaker 1:It depends. I mean, they're going to sell it at a discount, so technically they're losing money on the sale also discount, so technically they're losing money on this sale also.
Speaker 2:And, um, so if they, if they accept the insurance proceeds uh, you know the argument that they may or may not be made whole yeah, but remember, car dealers are going to be like any other retail store and this is a good point for us to talk about and, although it deals with slightly different things, any kind of time that you have like a retail store, you're dealing with a retail loss, for example a theft You're not going to pay the amount that's the sticker amount, right? For example, cokes have gotten outrageously expensive. They're like $9.50 here in Kansas City and you know that the grocery store doesn't pay $9.50 for that. They may pay $9 for that 12-pack and that is what you would pay as the insurance company. You would pay the $9 because you're not paying.
Speaker 1:Yeah, you're not paying their profit.
Speaker 2:Exactly, exactly. So it's the same for cars and the dealers. So even if they knock off $10,000, they're not. I mean maybe they're selling it under value, not what they bought it for, but probably not. I mean they probably still have a little bit of coach and, don't get me wrong, car dealers have an extremely narrow margin of profit. But yeah, there you go. So I think that's more your question going to like is that 70-30? I think that is more the one policy that I was working with it was a Lloyds of London policy and not necessarily anything else, but going to the formula for any kind of damaged vehicle, I think would be 70-75.
Speaker 2:That's usually when you're looking at it. You know when you get to, when you're adjusting your claim and you're looking at your car, just like when you look at your house, you should be running that Marshall Swift or that BEX evaluation so that you can do co-insurance right. You should still be doing that with a car. You should be looking at what the value of that car is and then looking when it comes into your estimate, comes in and running that, that section and saying, okay, we've got 70% of damages. You know this. This the damages equal 70% of the value, or 75% of the value or whatever. And that's kind of when you go hmm, if I get a supplement it's definitely going to go over into total territory. So do I total it now? Do I not total it? These kinds of things.
Speaker 1:Right, just to illustrate it for folks that may or may not be able to follow the conversation. So if you've got a car that's damaged in hail or collision or whatever and the book values say $25,000 and you get a repair estimate and it is $18,000. That's just a little more than 70% of the value of the 25,000. 70% of 25,000, my math says is 17,500. So if you got an $18,000 repair bill, the insurance company is going to say, well, that's a total loss. It's more than 70% of the value of the car. So that's a total. If it's $17,499, the insurance company has got to make a decision. Do we total this now If they get a supplement, and it's going to definitely push it over? And what is the criteria that the insurance company uses, whether it's 70 or 75% or even 80%, whatever it is, or even 80%, whatever it is? Who sets that rule and why do they have to declare a total loss? That would be the big question that I have right now, today, because I don't really know the answer to that and I probably should.
Speaker 2:Well, I think it can go by a lot of things A the state can say boom, this is it right. B the carrier or the policy can say this is the bright line, or you just kind of feel it out. I was always told 75, 70, 75, somewhere around there. Actually, what I was told was the bright line was 75. However, when you start getting into the 70, 75, somewhere around there, actually, what I was told was the bright line was 75. However, when you start getting into the 70 ish, that's when you need to talk to your supervisor because you're going to say you know it's 73%, am I going to get a supplement? Are you going to roll that dice? And maybe you need to talk to the appraiser or the field estimator and the body shop and say what's the probability of me getting a supplement out of this? Because it's going to flip that thing over and that's.
Speaker 2:It takes a long time to kind of get the, the, the salvage going on. A total loss, of course, as you know, because you've got to get salvage bids and then you have to get the title and pay everything off and blah, blah, blah. I mean, you know it's not just a couple of days worth of work. It sometimes takes a couple of weeks because you should at least leave your salvage bid process open for a week so everybody can get their bids in. But unless you're turning that over to like Carpart or AAA or whoever is the new people who do that nowadays we dealt with semi-tractor trailer rigs and we would put it up on our webpage and we had a list of salvors who would bid for that nationwide. But that's a little bit different from what a lot of domestic carriers do for cars. They may turn it over to car part or something to that effect, or what's that salvage company that that does all of those things?
Speaker 1:um auto car? Yeah, I don't, I don't um. I I deal with a lot of salvage companies that that collect various types of oddball salvage from industrial accidents and things like that. But uh, the ones that focus just on automobiles, I'm not not familiar with them by name, ccc or no. That's an estimating platform.
Speaker 2:That's the estimating thing, but we'll get to that too. Anyway, by the way, this like 75, 70 ish rule can be used on anything like your cargo, like you just mentioned, or what have you. So that's.
Speaker 1:I kind of lost our train of thought but well, one of the things that I had asked is why they do it, and I just looked it up in New York. New York sets a standard of 75%, okay, and I don't see where that is a statutory kind of issue here.
Speaker 2:I was also going to say DFS.
Speaker 1:I found it.
Speaker 2:Oh, okay, because I was also going to say it might be. Where do you have 15 New York CRR, 20.20 CII, but okay, well, the reason I ask is because I do have, on the art of adjusting website and the auto resources, I have a total loss amount and I mean it might be a couple of years old, they might've changed it. But also, the other thing that I was going to say before, before I cut you off, is the it could just go down to what everybody else does. You know the standard practices and procedures of an adjuster and in adjusting a claim, so go ahead. What does it say in New York?
Speaker 1:Well, I stumbled on a page that relates the car rather than the cost of repairs, which means that might be a little more than the cost of repairs, so you could actually take that money and get the car fixed, get a salvage title and roll down the road with it. That's the basic premise that we're working off of here in this conversation. Here in this conversation, and one of the other questions that you had brought up, relates to diminished value claims. Now, diminished value claims are a little different than total loss situations. Yes, diminished values assumes that you've, you've got a car. That back to the scenario with a $25,000 car, let's say you've got $5,000 in damage and you get that repair done.
Speaker 1:The argument is that it was 20 worth $25,000 book value prior to the accident. But after the accident, because it now has a collision loss on its record, it will be more difficult to sell that car at $25,000. And I might only be able to get $20,000 for it. I'm just using round numbers, so don't jump. But so you've, you've had a loss up to about 10 or 15 years ago. That wasn't really I don't know when this actually came to light. I recall talking about it first back in maybe 2014 or 2015. Prior to that, I don't really remember seeing much discussion about diminished value claims, so if there's anybody who's an expert in that and wants to pipe in or hit me on LinkedIn that'd be, great, I do, I remember, because I was kind of still am very much opposed to the diminished value aspect because the concept is and I mean, I understand the concept.
Speaker 2:The concept is it's the car has been in an accident and so it has lost value because it has been in an accident and someone doesn't want a car that has been in an accident and so it has lost value because it has been in an accident and someone doesn't want a car that has been in an accident. Okay, great. But the issue is we as the insurance company have to put the car back to the original position and if that is done then there is no diminishment in value. If it has not been done, then you have a claim against the body shop who didn't do the work correctly.
Speaker 1:Well, that could be, but now we've got all of these resources where you can look up a VIN number. True, and that environment has created this stigma associated with repaired vehicles, and possibly rightly so. I'm not an expert to say whether or not that is the case. Right, I will say that if I had a vehicle, if I had a choice to buy two vehicles and I knew one had never been in an accident and one had been in an accident, and they were the same price I would buy. I would choose the car that had not been in the accident. Now, if the one that was in the accident was $5,000 cheaper, would I consider that Maybe? Well, that is a demonstration that the diminished value is a real life thing that governs people's decision making and governs the intrinsic value that something has. So, from that standpoint, I agree with the concept. What I think, though, is what gets everybody's brain in a bind on this is that the purpose of the insurance policy originally was to fix the car it wasn't to consider these economic issues related to the car.
Speaker 1:It was just a you got a broken car, this policy, you can buy this policy and pay for collision and comprehensive to fix the car. So we're going to fix your car. And then, uh, the bean counter said well, wait a minute, there's some other losses here that you're not considering, and that's what that you know. The traditional mindset of fixing the car breaks a lot of adjusters brains.
Speaker 2:Yes, and there and there, and I mean, okay, fine, that's the way it is, and and and. So again, we're going with what is standard and normal, with an insurance adjustment of a claim, and that is standard and normal. So this is what we do Now. A lot of policies are now saying in first party cases, we are not going to pay for diminishment of value.
Speaker 1:And again you could get a probably a policy credit if you had some endorsement of value. And again, you could get a probably a policy credit if you had some endorsement. I mean if, if I was writing insurance policies for autos, what I would, because clearly they didn't contemplate the diminished value piece when they wrote these policies, I'm pretty sure.
Speaker 2:It should be by now, because it's 2025.
Speaker 1:By now yes, by now there's. They should be saying all right, if you want to diminish value, we get it. We understand the economic argument, but we're going to make that a separate coverage because some people just want their car fixed, they're not worried about this economic damage piece of it and they want to save a little money on their premiums. So we'll give you a policy credit if you'll agree not to pursue any claims for diminished value and we'll put an exclusion in your policy for that. So that's one way to handle it. That way, you're accepting the appropriate premium as the insurance company, you're not getting dinged a loss that you didn't contemplate originally, which I think is really what the big argument is against diminished value claims is that that's not what was originally contemplated when they wrote the policy. And then you'll get some people, like some of the folks on LinkedIn lately who've been commenting on my post who you know just take the position that. Just take the position that, well, the insurance companies are just trying to screw everybody anyway, yeah.
Speaker 1:Yeah.
Speaker 2:Well, you know, there are three types of diminished value, and one of them is the one that I kind of mentioned, which was a repair related diminished value, which is the loss value due to a low quality repair of an accident. There's the inherent diminished value. It's a repair due to a low quality repair of an accident. Um, there's the inherent diminished value. It's a repair due to the original condition. Uh, as closely as possible. So I mean, sometimes, well, we haven't even gotten to like the betterment stuff and we're not going to. Uh, I bet that's the question for Charlie. Is that what you said? The guy's name was?
Speaker 1:Chris Stanley.
Speaker 2:Chris, that's it, yeah. And of course there's the immediate one and that's, I think, the one that most people think about and we've hinted towards how you get that value. And of course you should be, as an adjuster, again looking at what the value of the vehicle is when it comes into you, because you're needing to know if it's a total loss or whatever. And there's a couple of ways to do that. We've mentioned CCC, which is something that most big carriers subscribe to, and they look at you, put in your VIN number and all of these features and they'll spit out like three common cars or what would be like kind of quality cars with similar mileage, similar paint jobs, similar, whatever features, and that should be in that particular zip code, or maybe two or three zip codes, you know, 50 mile radius, who knows? And they'll list the, the, even the auto dealer who's selling that car.
Speaker 2:So you know, you could go to as the adjuster say, okay, your car, mr. You could go to as the adjuster say, okay, your car, mr Otten, is worth $3,500, and you can go to Bill Jones Auto Shop and buy a car for $3,500, just like yours. Basically, now, most people, most claimants first party and third party would go to like NADA, which is the National Automobile Dealers Association. You can kind of do the same thing. Kelly Blue Book, kbbcom I believe we can put all these in the show notes can also do a very similar instance and you can do that too. And I would recommend doing like the NADA or the Kelly Blue Book, if you're doing your fast and loose one to determine if the vehicle is a total loss, when you're looking at what the value should be as compared to what the estimate came back as so, having worked in environments that did not deal with auto claims on a regular basis.
Speaker 1:So I worked for a property casualty carrier for 10 years that wrote no auto at all, but occasionally there'd be claims involving automobiles because people damage them in all kinds of ways Overspray, you know. If you insure a painting company and they're painting a building nearby, you get overspray. You know, if you insure a painting company and they're painting a building nearby, you get overspray claims. Or you get a farm accident where a tractor runs into it or something like that and those situations. If you're in that environment and you don't have systems set up for estimating damage to vehicles and finding comparative values for total losses, you have to kind of wing it and you're brought up a few different ways to do it. It's just to look up values at dealerships for the same make, model and year, knowing that you're seeing the asking price, not the sale price, Right so? But you know, just like building damages here in New York, you can kind of take a. What do they call it now? I can't think.
Speaker 2:Marshall Swift.
Speaker 1:No, where you take all the available resources into consideration to value a property oh market value well, market value is one of them yeah, isn't it.
Speaker 2:Isn't it market value where you're no?
Speaker 1:no, no, there's. There's a. There's a rule in new york where you've got to take all of all of resources. It could be market value, it could be the purchase value, book value, it could be the insured value, rental value, all that stuff, what is that called?
Speaker 2:Dude, I know what you're talking about.
Speaker 1:I can't think of the name of it because I'm not in property mode right now, but the point is be thorough. Broad evidence rule Broad evidence rule.
Speaker 2:Thank you very much, and then we have fair market value and then the replacement costs.
Speaker 1:Depreciation, Depreciation, yeah. So when you're when you're evaluating an automobile, you can take the same approach and ultimately you have to settle the claim. You know, if you're in an argument over the book value of something, get all the resources you can together to make your case and you know, hopefully reasonable minds can find you know, because the claimant's always going to want more for their car than maybe you found online that it's worth. So those are fun, contentious kind of arguments, but they happen not only with automobiles but RVs, farm equipment, computers, just about anything under the sun that can be damaged. You're going to be faced with a situation where you've got to find the actual cash value of it to settle the claim. And yeah, anyway, that's my broad evidence rule rant, now that I remember what it's called, Thank you.
Speaker 2:Well and again it can be used. And that's the cool thing and one of the reasons why I do promote us as adjusters becoming multi-lined is because you learn things from the other lines that you can apply in other areas. So you can apply the broad evidence rule here in automobiles as well. And in fact we kind of had to do that because there is no CCC or NADA or Kelly Blue Book for a Peterbilt or a Freightliner or whatever.
Speaker 2:So what we had to do is call a couple of Pete Liners, because that would be the Peterbilts and the Freightliners meshed together, but yeah, so we would have to call a couple of dealerships in that region, and they could be hundreds of miles apart. But you know, say, hey, what would you give me for a freight liner with a hundred thousand miles, blah, blah, blah, and list it out, and that person would, of course, give you, uh, their price, but it again, it would be you their price, but again it would be the sticker price, even if you walked in, even if you told them I'm giving you cash, what's the cash discount? And yeah, whatever, but anyway. So I think we've talked that to death. One of the other questions was when we were talking about salvage titles. We didn't really talk about this, but you mentioned it.
Speaker 2:What happens if that person is like, begging us, don't turn it into a salvage, please don't turn it into a salvage. We'd probably, I would probably have to uh, you know, because sometimes it's required, but they can. The person can like, let's say, the insured does not have comprehensive coverage because after a certain age you can not give it. You know, you can drop your comprehensive and collision coverage. I don't recommend it, but I mean whatever. Anywho, yeah, you can absolutely and you can drive it around as is, if that's what you want.
Speaker 2:I usually call those rolling totals. But yeah, but you would also still have that salvage title. You can do whatever you want with it. Yeah, you can take a totaled car and fix it up to where it's like you know. It looks brand new. It still has a salvage title, but there you go.
Speaker 1:Yeah, so salvage titles. I've never owned one, I'm not sure. If I had a hail-damaged vehicle and it was totaled, I'd probably get rid of it. Would you keep it?
Speaker 2:Yeah, it's hard to tell. I mean, you know, you, you everybody I think gets that thing where you're like I want a brand new car, you know. And I mean I never get quote, unquote shit. Oh sorry Expletives I'm going to have to beep myself out. Anyway, I never get brand new cars, I always get used cars. But still new to me. New to me and everybody wants that new to me car Right, so maybe I would probably get a new to me car.
Speaker 1:I would probably just Financially, it would probably be a better deal for you to take the salvage title drive around with no little or no car payment for a while save up your money for your next car.
Speaker 2:See, the thing is and that's one of the things that I think about is that I don't have a car payment now and we save up already to not have car payments. Or if we do, it's because we've put I don't know 50% down or something, so that our car payments don't have to be that much. Yep, we can get them paid off quicker because it's just another debt that we have. Definitely don't lease cars I've never leased a car and, as Aaron says, dave Ramsey is my cult leader and Dave Ramsey doesn't recommend leasing vehicles and and that is something to be thinking about, when you get into a car accident or it has hail damage or whatever, is what happens with your leased vehicle and the leasee is the person who rents the car, the lease or is the owner or owner of the car. So it kind of works the same way. It's just that you as the, as the renter or the leasee, has to let the lease or know that the car has been in an accident or has hail damage or whatever.
Speaker 1:And I think you lose a little control over that decision-making, whether you keep the car or not.
Speaker 2:Yeah, I bet you do, and you may even experience a gap, and this is where gap insurance comes in. Not really going to talk too much about that, but the car is worth, let's say, $5,000, but you still are renting to own or whatever leasing to own this car and your payments are $7,000. Well, if the car is totaled, the most that the insurance company is going to pay is the $5,000, which means you still owe $2,000 to the lease company. That's the gap and they have gap insurance for that.
Speaker 1:It happens with a loan too.
Speaker 2:Yes, it does happen with a loan too. Very, very important. My stepson, my youngest stepson, learned about this because he, of course, terrible, terrible driver and tends to total every single car that he has within minutes of. I mean, it's just like, oh my god, please, we're not buying you another car. And yeah, so he when, when we finally stopped buying him cars, he experienced the whole gap issue. We're like, yeah, have fun with that, it happens right away you buy a new car. When we finally stopped buying him cars, he experienced the whole gap issue.
Speaker 1:We're like, yeah, have fun with that. It happens right away. You buy a new car, a brand new car. You roll it off the lot and instantly declines in value.
Speaker 2:Yep yep, yep. So yeah, you kind of lose a little bit of control with the leased car. You do have to notify the leased company that they have had an accident, um, so, and the payment's going to go to lease company, probably the body shop, then the lease company, maybe you all three, and good luck trying to get that all settled um you know. So there you go um yeah very good.
Speaker 1:Well, I think we've've punished this topic to death today.
Speaker 2:I think we have.
Speaker 1:Hopefully we've taught somebody something and maybe we've opened opportunities for us to learn some things too.
Speaker 2:Yeah, yeah. So, like I said, next time in two weeks next episode is going to be March 27th we're going to be talking about hail damage, naturally to homes and commercial buildings or just buildings in general, and all that, so it should be fun.
Speaker 1:Yes, ma'am.
Speaker 2:Yay, so we shall see you in two weeks.
Speaker 1:Yes, ma'am, happy St Patrick's Day.
Speaker 2:Happy St Patrick's Day. Bye, bye-bye.
Speaker 1:Thanks for joining us on the Art of Adjusting podcast, where we talk about life as an insurance adjuster. Hit that subscribe button real quick and tell all of your adjuster friends to check this out as well. For independent adjusting services, go to wwwautinclaims, and for anyone interested in working as an independent liability adjuster, go to the contact us tab to join our roster.
Speaker 2:So this wraps up another Art of Adjusting podcast. If you enjoyed this podcast or this episode, please give us five stars and a review. It does help the algorithm pick us up. In the meantime, you can contact me at theartofadjustingcom for consulting and training purposes.
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