Loss determination

A couple of days later an appraiser from the insurance company contacted me to arrange a time to come out and inspect the S4.  Since I had moved the car into my garage I would need to be around to open the door for them.  They made a cursory look over the car and took some notes and photographs.  I asked about how the aftermarket components would be addressed and they asked me what components had been replaced.  I rattled off a few of the major items and they took note of what I said but made no inquiry as to the costs of the items or if I had receipts.  I was expecting to discuss the aftermarket parts in more detail with the insurance adjuster so I did not get concerned about the brief attention the appraiser gave to the aftermarket parts.

Damaged S4 engine compartment
Note: Bent frame rail and firewall from engine movement.

Total loss:

A couple of days later I received an email document from the insurance company notifying me that they had declared the vehicle a total loss.  I had begun to research the process of this type of vehicle claim so I was prepared for this determination and I immediately asked the adjuster to provide me with the Market Valuation Report.

Market Valuation Report:

The automobile market valuation report is very similar to what is provided to a person that has a home appraisal performed.  The entity doing the market valuation finds some comparables and uses them to establish the market value of the loss vehicle.  This was a sticking point for me, due to the fact that the terminology of my insurance contract states that in the event of a total loss the insured will receive Actual Cash Value of the loss vehicle.  Actual cash value is the price paid for the item minus depreciation where market value is what a person in the market place would pay for the item.  The insurance company was determining the Actual Cash Value by estimating the Market Value which I objected to throughout the proceedings.

The insurance company offered a little over $10k for payout.  I was surprised that the offer was that high, I was expecting it to come in between 7-8k.  At first I was pleased at receiving an offer for that amount because I had prepared myself to receive a very low offer.  It turned out that having lower than average mileage, being a single owner vehicle, and being rated as Very Good in every component category other than Tires and Headliner, made my car’s market value better than average.

I was very pleased to hear that the salvage value they assigned to it was only $1200.  So I could buy it back for that amount.  Knowing that the motors go for about $600-$1000 used and the same ballpark for the transmission it was a no-brainer to buy the car back and sell off miscellaneous parts if for no other reason than to give me the time I needed to pull off all of the aftermarket parts I had installed.

(Jumping ahead for a moment, someone reading this may wonder, “If you were pleased at the payout offer why didn’t you take it?”  This is where being educated about the loss payout process came into play.  I, and I suspect many other car owners have never gone through a total loss claim before, so we are oblivious to the finer points.  The insurance company is in a negotiation with a consumer and the insurance company has a huge advantage in doing this type of thing all of the time.  It is also in the insurance companies financial interest to keep the payout low.  I was learning as I was going along and what I soon found out motivated me to fight for better compensation.

The consumer does not know what they don’t know, and can easily be taken advantage of by the insurance company.)

I had the insurance company send me the appraisers report and I was disappointed by the comps they pulled.  They were plain vanilla S4’s, one even was from a site called swapride.com, a car sale site I’d never heard of.  I decided I would argue that they should pull at least one or two of the comps from enthusiast web sites, where a car comparable to mine would be selling for around $15k.

CCC Market Valuation Report:

My research had made me aware of the CCC Market Valuation report which is what the loss payout is based upon, and the important fact that there could be errors on it.  What I had read about the report made clear that the vehicle owner should scrutinize this report for errors, and that’s what I did.

Next: CCC Market Valuation Report