cbc marketplace investigation into diminished value insurance

[tool001]

fuck u icbc

http://www.cbc.ca/marketplace/2011/crashandburned/

[Energy]

Yeah had over $12,000 worth of accidents on my old civic because of multiple accidents that were not my fault. Sold it for way less than what I could've gotten if there were no accidents.

[ilvtofu]

That diminished value of georgia from an economics standpoint sounds like a hard thing to regulate cheating of the system, and I agree with the industry guy at the end that it's really hard to quantify so I don't blame the insurance companies personally. There are so many potential complications with implementing a policy like that far beyond what the investigation thinks.

[TRDood]

Just watched the first 6 minutes.

Given that the market will always have more risk adverse buyers/sellers than risk neutral buyers/sellers, this "diminishing value" is going to happen. Actually, I don't really agree with the term "diminishing value" or "accelerated depreciation". It's more like "risk aversion" and "lowered expectations" due to informational issues of the past AND the future.

No one (since insurance selling companies are risk adverse too) will insure against this issue since it is unobservable, unmeasurable, subjective, timing issues, etc. If ICBC insurance policies covers this as well, insurance prices will be VERY expensive.

How to get around this? lease the car, drive a beater, drive your car to the ground, take the transit, don't own any assets. When you lease the car, you are kind of sharing this risk with the dealership because you can just say "fuck it" by the end of your lease. (correct me if I am wrong though, never leased a car)

[Mancini]

I watched the video. I want to start by getting one point out of the way. It is pure sensationalism to call this "The biggest secret in the car insurance biz". Canadians generally know that an accident of any significance will reduce the resale value of the car and that insurance companies won't pay for this loss. The people who don't know this likely don't know what any of their dash lights mean either and should not represent the general population.

As repeatedly mentioned in the video insurance coverage should put you back in the same financial situation you were in immediately prior to the loss. Clearly, that's not happening here. Sure, it can be difficult to quantify the "diminished value" loss but the fact remains that no effort is made to account for this portion of a claim.

My car was hit last year by another driver and nearly totalled. I knew that if I had it repaired then I would face reduced resale value and possibly ongoing repair problems. I told ICBC that I didn't want it back and had them pay me the the value of the repair estimate, plus what they were able to sell it for as salvage. This amount worked out to be nearly the actual cash value of the car before the loss, and certainly more than it would have been worth as a repaired wreck. I saved my myself the hassle of the whole ordeal.

The bottom line is that insurance premiums are calculated using claims costs (the fact that ICBC runs an ongoing surplus is a different issue). If they're going to cover this then premiums are going to go up commensurately. It won't come for free.

[hk20000]

I have never seen diminished value being repaid out of anywhere but in Georgia. Never heard of it in Hong Kong never heard of it in Japan and certainly no one talks about it in Europe.

Cars are simply a constantly depreciating tool that just.....depreciates. You can get into an accident or you can just not change oil for years, it's a tool and when it's used it comes in its used form.

But it's an interesting watch, I used to just chalk it up to bad luck if some bastard rear ends your car.

I was interviewed for this show "Rob Fournier" and people are awarded accelerated depreciation all the time in BC. it is often rolled into a personal injury claim, or settled out of court,

but if you search through Canlii.com you will find two cases, Brian Jessel VS ICBC and Signorello VS Khan, both cases awarded accelerated depreciation in BC.

[The_AK]

So if my car was totalled the next day (given that I have been in an accident prior to this event), would ICBC pay me market value or market value reduced by cost of accident?

[Blinky]

Unless your car is eligible for and has been provided replacement cost insurance, ICBC should adjust to replacement value - what it would cost to replace your vehicle with one of similar quality and condition. I guess in theory, this means that a rebuilt-titled car could be replaced with one with clean title, though that would depend on the specifics of a given claim.

right now ICBC doesn't acknowledge that accidents impact the value of the car,

so when they are calculating the value of a car because they have to pay someone out, they currently do not take into consideration that the car had previous accidents. Unless the car was a rebuild.

this was explained to me by an ex-icbc employee.

[Doubl3_H]

Anyone know what is the maximum value damage to a car before it is written off by icbc?

Our car is less than 5 months old, and some old lady ran into us while we were parked.

We were deemed not at fault, but the damage to our car was 9500 dollars.

The value of our car new was 35,000 dollars.


Any inputs?

thanks

[Suprarz666]

I believe its over 70% of the cars value, give or take a little. Should call to double check though.

[TOPEC]

Originally Posted by Doubl3_H

Anyone know what is the maximum value damage to a car before it is written off by icbc?

Our car is less than 5 months old, and some old lady ran into us while we were parked.

We were deemed not at fault, but the damage to our car was 9500 dollars.

The value of our car new was 35,000 dollars.


Any inputs?

thanks

if the value of the claim exceeds 70% of the value of the car, it is deemed totaled. THERE IS however optional coverage that u can buy in the FIRST year for a new car, which is IF the claim value exceeds 50% of the value of the car, it is deemed totaled. my broker told me that optional coverage is not worth the price as it is pretty expensive.

[freakshow]

IMO, a bigger issue is that you pay insurance based on the year/model/milage, but you get paid out based on the condition.
So two 1999 Civics pay the same insurance cost up front, but if they're written off, they'll get paid out differently if one is a rust bucket. That's not right.

[Gh0stRider]

those fuckers

[ilvtofu]

Originally Posted by freakshow

IMO, a bigger issue is that you pay insurance based on the year/model/milage, but you get paid out based on the condition.
So two 1999 Civics pay the same insurance cost up front, but if they're written off, they'll get paid out differently if one is a rust bucket. That's not right.

How is it not right, If you go buy a mint 1999 civic for $4k and I buy a 1999 rust bucket for $500 and we both total our cars why would you expect me to get 3k-4k payout? The insurance costs the same because if I damage the headlight on my rust bucket and needs to be replaced it will cost pretty much exactly the same to replace that headlight on the mint one as it would on the rust bucket

[Doubl3_H]

Originally Posted by TOPEC

if the value of the claim exceeds 70% of the value of the car, it is deemed totaled. THERE IS however optional coverage that u can buy in the FIRST year for a new car, which is IF the claim value exceeds 50% of the value of the car, it is deemed totaled. my broker told me that optional coverage is not worth the price as it is pretty expensive.

we bought the so called " new car replacement policy" insurance from a third party insurance broker.

but they said its up to icbc to deem whether or not the vehicle is a total write off.


One interesting thing I found out was that icbc when they do their repair estimates, they estimate with aftermarket parts instead of OEM parts.

[deep87]

Originally Posted by freakshow

IMO, a bigger issue is that you pay insurance based on the year/model/milage, but you get paid out based on the condition.
So two 1999 Civics pay the same insurance cost up front, but if they're written off, they'll get paid out differently if one is a rust bucket. That's not right.

thats why you dont get collision coverage on the beater and pay half the insurance

[TOPEC]

Originally Posted by Doubl3_H

we bought the so called " new car replacement policy" insurance from a third party insurance broker.

but they said its up to icbc to deem whether or not the vehicle is a total write off.


One interesting thing I found out was that icbc when they do their repair estimates, they estimate with aftermarket parts instead of OEM parts.

yup, that is why my insurance agent suggests me to buy that middle tier optional coverage for the first 3 years so i get oem parts,
because the top tier coverage is not worth it and only covers for 1 year.

heres more info on the new car insurance thing

http://www.icbc.com/autoplan/optional/optional-new

not sure how ur policy differs from a 3rd party company.

[q0192837465]

What I understand from my study to become an agent is that the point of insurance is to help u get back on ur feet. It is NOT meant to put u back to the financial position before the accident. It means it will prevent u from going bankrupt but the insured have to live with the fact that shit happens and they are also responsible for bearing the inherent risk of living in a society.
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[freakshow]

Originally Posted by ilvtofu

How is it not right, If you go buy a mint 1999 civic for $4k and I buy a 1999 rust bucket for $500 and we both total our cars why would you expect me to get 3k-4k payout? The insurance costs the same because if I damage the headlight on my rust bucket and needs to be replaced it will cost pretty much exactly the same to replace that headlight on the mint one as it would on the rust bucket

That's a good point, but ultimately, it takes extremely little to write off the $500 rust bucket, so they really have a much lower maximum payout.

[Rich Sandor]

If the accident is not your fault, you can always sue the other motorist for diminished value.

I prefer that method to bundling the policy into basic insurance, as it would cause basic rates to skyrocket on newer vehicles.

[Blinky]

Originally Posted by freakshow

That's a good point, but ultimately, it takes extremely little to write off the $500 rust bucket, so they really have a much lower maximum payout.

What are you doing buying collision coverage on a PoS? If I had a PoS, I can guarantee you I'd only be insuring it for liability.

Originally Posted by Rich Sandor

If the accident is not your fault, you can always sue the other motorist for diminished value.

I prefer that method to bundling the policy into basic insurance, as it would cause basic rates to skyrocket on newer vehicles.

I believe when you settle your claim with ICBC you waive all your rights of recovery against the other party. This is typical of insurance as in some cases, your insurance company will legally pursue the other party (or other party's insurer) to recover some of the loss.

[Rich Sandor]

No, because ICBC does not provide coverage for diminished value. You waive your right to recover only what ICBC provides coverage for and has covered the other party for.

It's just like if you have an accident and want $3 million, but the other party only has $250,000 coverage. ICBC will cover the $250,000 but you will have to sue to get the other 2.75 mil. Same thing with dim. val.

[VR6GTI]

Originally Posted by Doubl3_H

we bought the so called " new car replacement policy" insurance from a third party insurance broker.

but they said its up to icbc to deem whether or not the vehicle is a total write off.


One interesting thing I found out was that icbc when they do their repair estimates, they estimate with aftermarket parts instead of OEM parts.

third party insurance is a joke, save yourself the headache and purchase it right from ICBC.