"fair market value" or replacement of car

[ConnorW]

What is the name of your state? What is the name of your state? Colorado

I was involved in an auto accident October 21 in my girl friend's car. She's currently getting the run around from the insurance company / rental car company of the driver who rear ended me. The driver was found at fault by the police officer and cited at the time of the accident.

I'm trying to figure out if "fair market value" or replacemnet of the car is applicable. She's upside down with the car loan on the car, and of course they're offering her less than the car is worth and much less than she owes on it. I've talked to a couple of attorneys about how Colorado operates but am getting conflicting advice regarding "fair market value" or replacement. I've even been told by one that it keeps going back and forth here in Colorado. I've tried to find out on my own by checking Lexus Nexus and other searches on the Internet but can't find anything.

If anyone knows for sure I'd appreceiate any help, especially if a pointer to the appropriate statute or case is know.

Thanks for any help.

 

[knotcops]

The insurance company is only going to give you the market value of the car at the time of the accident. Your girl friend should have purchased "GAP" insurance when she purchased her auto insurance.

Everybody believes their vehicle is worth more than it is, especially after an accident and the insurance will only pay so much. Look up the value in the Kelly or NADA books. This will tell you how much you'll receive.

 

[ConnorW]

Thanks knotcops.

I did look up the value, from about 6 different books. My girlfriend worked at the dealership she purchased the car from, she sold cars for years, so again we do know what the value is. We've also been checking out comps from local auto dealers for current sale value. As for gap, it wasn't available at the dealership she was working at when she bought the car. She was offered under half of the comps we've been getting, and just over 1/2 of the average book value. Obviously it's going to be a battle, but without knowing exactly what the law is it's a bit hard to make a good decision on what the next step is.

As I said, I've checked with a few attorneys, and am getting conflicting advice regarding replacement or fair market value, but no one has yet been able to point me to a statute or case. Replacement vs fair market value has apparently gone back and forth in Colorado, accodring to one attorney I talked to, but he didn't know what the current law stated. I do know that most insurance companies offer a flat amount and most people settle for money. However, if the law says replacement then that's what she wants to do.

Which is why I asked here.

 

[JETX]

Okay, here is the situation:
The insurance company is only obligated to give you 'fair market value' based on the condition of the car immediately prior to the accident. That means if it had a $500 dent in the fender at the time, the car is worth $500 less. If the car had double the 'normal' mileage, the excess mileage affects the value.

So, get your comps on the condition at the time. Use some online sources like:
www.edmunds.com
www.kbb.com
www.nada.com

Print out the values that you find.

Then, get your local newspaper and find some cars that best match the condition.

When you feel that you have sufficient evidence to show the value, determine the average of them and contact the insurance company. Send them copies of your research and tell them that you expect to be compensated fairly.

If you eventually feel that you are not being treated fairly, your only option is to consider legal action.

 

[ConnorW]

JETX - Thanks. I have printouts form about 6 sites, kelly, nada, edmunds, and a few others. We have comps, newspaper articles. So I know the value.

Again, the part that has me confused is Colorado law. In conversations with several attorneys I have been given two basic opinions, split about 50-50: half say fair market value, and half say in Colorado they have to replace the car.

I assumed fair market value was the way it went, but I have a few attorney's saying otherwise, with the exception of one who said replacement, but I've never seen anything other than money. Now when I ask for proof of either opinion they just end the conversation.

The case involves the driver and his insurance company and the rental car company. Originally the insurance company was handling the details on the car, my girlfriend and the insurance rep were argueing value until my girlfriend told them she had been informed by an attorney that in Colorado the car had to be replaced. There was a long pause and then the insurance rep, sounding real shaken, hastily said he'd call her back in a couple of days. Since then they've told the rental car company to handle all the details.

I'm not trying to be difficult, just trying to make sure with 100% certainty what the real scoop is. Since I'm not working because of the accident I read through the Colorado Revised Statutes and couldn't find ANYTHING one way or the other.

I appreciate the help. I guess I'll lean on my PIA/WC attorney to find me something one way or the other. I was just hoping that maybe someone here knew for sure or could point me in the right direction on where to look.

Thanks for all the help. I knew this was going to be ugly

 

[JETX]

"Again, the part that has me confused is Colorado law. In conversations with several attorneys I have been given two basic opinions, split about 50-50: half say fair market value, and half say in Colorado they have to replace the car."
*** Think about that statement for a minute and you will realize which is pure BS!! How can ANYONE replace a damaged vehicle with an EXACT equal?? Simply can't be done. Even if two identical cars are purchased at the same time, two years later they will have different mileage, engine wear, tire wear, burn holes in the seats, faded paint, cosmetic damage, etc. And since the insurance company's obligation is to make you 'whole' (to pre-accident condition) and not better, there is clearly no way that an EQUAL vehicle could be found.

 

[ConnorW]

Ya know JETX, I don't assume anything anymore. I've never heard of the rental car company being 50% responsible either, but that is the way it is in Colorado.

I've lived in places where the requirement in a similiar situation was that the at fault party had 3 options: repair the vehicle to bring it back to a pre-accident condition, no matter the cost; replace the vehicle with one of at least similar make/model/miles/condition; or pay whatever the complete balance owed on any vehicle loan was. I've also lived in places where all that was required was what an "industry standard value" listed. Thus the guy that had his mint 69 somethingorother was valued at $500 because that was what "industry standard" said a 69 not listed was worth, even though it had been appraised at over $7500 a few days earlier.

You're right, it is impossible to replace a vehicle with one of exactly the same condition. And laws differ greatly depending on where you live, nor do they always make sense. I'm not asking for advice, I have advice from 10 Colorado attorneys, I'm asking if anyone knows what Colorado law states and if someone can point me to that.

 

[JETX]

I doubt that you will find any statutes detailing the compensation 'plans' that an insurance company must comply with.

If you are confused as to what a Colorado insurance company must do, contact the state Division of Insurance.
Division of Insurance
1560 Broadway, Suite 850
Denver, CO 80202
(303) 894-7499 - Phone
(303) 894-7490 - Consumer Information
(800) 930-3745 - Toll Free
(303) 894-7455 - Fax
[email protected]

 

[ConnorW]

JETX - Did that "we can't give legal advice" and "normally it's money" is all they'll say.

It's a bit frustrating, it's been almost 3 weeks and no one can provide an answer, or will provide an answer, or will provide any proof to back up their answer. Here's pretty much the conversation my GF had with CDoI over a week ago.

GF: "Hi. My car was hit from behind, the insurance company of the driver who hit my car wants to total the vehicle. I've talked to a number of lawyers and gotten conflicting answers on whether it's replacemnet of the vehicle or fair market value. Is there a law, regulation or something that details whether it's replacement of the vehicle or fair market value?"

CDoI: "We can't give out legal advice."

GF: "But that's not legal advice."

CDoI: "That's all we can tell you. You'll need to talk to a lawyer if you have any other questions."

GF: "So there are no regulations as to what's required?"

CDoI: "Yes, there are regulations."

GF: "So, does the regulation say fair market value ot replacement of the vehicle?"

CDoI: "We can't give out legal advice."

GF: "I'm not asking for legal advice, I'm just asking what the regulation says."

CDoI "You'll have to ask a lawyer."

GF: "Can I get a copy of the regulations somewhere?"

CDoI: "You'll have to ask a lawyer."

GF: "I guess you couldn't tell me if I'm required to have my car insured either, because that would be legal advice. You guys are useless!" -click-

Then came much swearing and yelling.

Argh. They're as useful as the PUC here, not much. I told her to just get an attorney that gives her the answer she likes the best.

I really do appreciate the help.

 

[JETX]

You have to remember, your dealing with 'clerks' who have certain words that trigger certain responses.

Your question should be phrased to eliminate the legal issue.
"I am curious about insurance coverage. If a vehicle is damaged in an accident and the 'at fault' parties insurance totals it out, is the insurance company required to provide replacement or market value?"

(I am willing to bet you dimes to donuts, the answer is MARKET value.... but since you want to confirm this on your own.....).

 

[ConnorW]

JETX - I'm figuring market value too, that's what I always figured, but the GF heard "replacement" and likes that better. It's her car, so...

I told her to come up with a comp sheet and call every dealer in the area and talk to them. I'm sure she could get close to a hundred comps for actual vehicles on their lots or what they would sell it for, or have recently sold it for. Then she just has to find the average and should be close to what she owes on it.

 

[JETX]

Then she will have to get ALL of them in writing or some other form to PROVE them to the insurance company.

As stated previously, unless she had REPLACEMENT insurance (more expensive) she is only going to get fair market value as determined by the insurance company.

 

[knotcops]

JETX - I'm figuring market value too, that's what I always figured, but the GF heard "replacement" and likes that better. It's her car, so...

I told her to come up with a comp sheet and call every dealer in the area and talk to them. I'm sure she could get close to a hundred comps for actual vehicles on their lots or what they would sell it for, or have recently sold it for. Then she just has to find the average and should be close to what she owes on it.

She may like replacement better, but she will only get fair market value.

Fair market value is NOT what a dealer sells a car for. Dealers always over inflate the sales price of a vehicle. The fair market value will be closer to what the dealer PAID for the vehicle before they sell it.

 

[JETX]

Actually, no. "Fair Market Value" is what you would pay a 'normal' seller for the equivalent vehicle. Normal meaning not a distress or auction sale.