What Jurors Should Know About Low Property Damage Auto Accidents (Alleged By the Insurance Industry to be Minimum Impact Soft Tissue Motor Vehicle Accidents

Unless you have had to unfortunate experience of being an injured victim of a low property damage motor vehicle accident, you may have difficulty understanding that people do get injured as a result of these accidents.

The purpose of this blog is to educate readers, who may end up on a jury, that there are two sides to every low property damage motor vehicle accident.

The definition of a low property damage accident over the years has expanded from cases where the property damage was under $500.00 to cases involving thousands of dollars worth of damage. The definition is whatever the insurance company representing the at fault driver defines it to be.

In my experience with auto accident claims and litigation for approximately 30 years,  I have seen hundreds of victims develop serious spinal and other musculoskeletal injuries from low property damage accidents.

Obviously, insurance companies hate these case claims, and they will force the victims of personal injury accidents into litigation and even Trial.  Many personal injury attorneys won’t take them – or won’t keep them if they cannot settle them without resorting to litigation.East Inflatables

Once, while backing out of a driveway and moving very slowly, I ran into a pole supporting a basketball backboard.  The impact was to the rubber part of my steel bumper.  The bumper of my car was  the older type which incorporated bumper shock absorbers. The shock of this impact was so great that I thought that I would develop injury symptoms.  Although I was fortunate not to have been injured in the accident, the impact  really rang my bell mainly because of the unexpected nature of the collision.

I did get hurt from rear end collision where that was part of a four vehicle chain reaction rear end accident. My new Corvette was first in line at an intersection when I was struck from behind and pushed out in to the intersection.  I thought that the rear end of my Corvette was demolished.  When I got out  of the car the only damage that  was visible was a crack in my bumper cover about 2 inches long and the rear quarter panel red lights popped out of their of their sockets.  After this accident  my back started hurting, and it kept getting worse with time. I kept denying that I  was injured but eventually had to get some chiropractic treatment because of horrible low back and leg pain.

Insurance companies often deny these low property damage claims, or offer very little to settle them.  They know that many attorneys will not dedicate the time and expense to litigate them. Juries that hear these cases often do not understand the medical complexities involved with whiplash injuries and  are predisposed to think that people who make claims for these types of accidents are trying to take advantage of the system.  As a result it is difficult to obtain a fair verdict that compensates the victims for the injuries they suffer as a result of these car accidents. However, it is my experience that jurors are reluctant to admit this prejudice during voir dire examination.

Skilled defense attorneys defend these cases.   So, the insurance companies motive in strongly defending these claims is an effort to discourage victims of injury accidents from seeking compensation and attorneys from representing those who do.  The advantage to the insurance company is the production of a ripple effect though the legal community.

Since so many people are hurt in these rear-end low property damage accidents, it cannot be said that these accidents do not produce injury.  It is true that some people walk away from them without injury.  Most adverse drivers that cause these accidents often do not get injured because they have the opportunity to see them coming and prepare for the impact. Their bodies also move in different directions than those whose cars they hit.

Many factors enter into the injury potential of these accidents.  Factors that can increase susceptibility to injury include: body position at the time of impact, lack of head rests, seatbelts locking on shoulder harness straps that only go over only one shoulder, bracing, unexpected nature of the collision, susceptibility to injury due to prior injuries or  pre-existing conditions, weight, age, sex (women have more susceptibility to cervical injuries) or presence of osteoarthritis or other degenerative conditions.

Whiplash injuries are caused by the unique and unusual head and spinal movement produced by rear end, side, and frontal impacts.  The symptoms associated with sprain and strain injuries to the supporting structures of the spine may come on hours or even days after the accident. Delayed symptoms associated with spinal injuries are the rule rather than the exception.  Despite this medical truth, insurance companies hire doctors who will testify that the victim of an injury accident may not have been injured, or may have been only slightly injured if they did not complain of pain immediately after the accident.

Insurance companies will argue that there is a scientific correlation between the amount of visible damage sustained to a vehicle’s components, which are  mostly metal and plastic,  and the seriousness of injury sustained to the flesh and connective tissue of a human occupant.

The simple defense argument presented in thousands of courtrooms across the country each day is that injury victim could not possibly have been injured because there was no or very little property damage to the victim’s vehicle.

Insurance companies spend millions of dollars on their commercials talking about fakes, frauds and cheaters who are trying to exploit and defraud  an insurance company out of billions of dollars. They always take the position that injury claims are exaggerated.  Insurance companies make money selling insurance and investing that money in the stock market and other investments. They advertise about fake and fraudulent claims in an attempt to  give the impression that they are actually losing money. In  reality insurance companies have us convinced us that we should not make a claims even against our own policies because our rates will go up, or our policies will be cancelled. Jurors think that if they award money damages to auto accident victims that this may indirectly affect their own insurance rates.

To analyze the effect of a low property damage auto accident one cannot compare apples to oranges.  Trying to make a statistical correlation between damage to  inanimate objects like an automobile and a human body is comparing apples to oranges. Metal and human tissue share little  similarities. Some people herniate a disc when bending over to tie their shoes. And some people walk away from accidents where their cars are totaled.  Therefore, there is no correlation between property damage and human  injury.

In order validate the proposition that little vehicle property damage equates to little injury, the analysis must also  include the proposition that major vehicle  damage must equate to major bodily injury.  Insurance companies will deny such a direct correlation in high property damage cases.  Body movement in a low impact accident can be incredibly complex.  The injury potential of any accident is a matter of medical opinion.  The opinions of treating physicians and defense experts concerning the injury potential of any accident will be divergent.  Defense experts are called upon to provide favorable answers on critical injury potential issues – and are paid to do so. Insurance company experts won’t get repeat business unless they give favorable opinions to their insurance company clients.  Accident Reconstructionists and Biomechanical Engineers can make a lot of money rendering these opinions.  A cottage industry of low property damage auto accident experts has evolved in this country which is supported financially by the insurance companies.  There certainly is money to be made,  however the perceived legitimacy of these experts rests upon the application of junk science.

A multi-disciplinary education involving medicine, physics and biomechanics should be required to qualify a  low property damage expert.  Seldom does the expert have credentials in all three areas. A person who has not treated the victim of the personal injury car accident should be required to be an accident reconstructionist,   medical doctor, engineer,  and mechanical engineer  to render injury potential opinions on low property damage accidents.

Cars absorb energy of a crash by crushing.  Energy is not absorbed by the car if it does not crush. The less crush the  more energy is transferred by the crash to the occupants.

Harmful hyper-extension followed by immediate hyper-flexion  of the head and neck results  from a low property damage rear end accident.  This causing a shearing force to the supporting structures of the spine.  But, insurance experts take the position that a change  of velocity of the impacted vehicle under 5 mph  means that someone that who was legitimately injured and sought medical treatment is always a fake or a fraud.

So, potential jurors should not automatically accept the defense arguments on a low property damage impact auto accident.  They should look to the injured party’s medical condition before the accident.  Was the victim predisposed to injury from a motor vehicle accident  because of arthritis or some other medical condition that would make them more susceptible to injury from a low impact accident?   Are the injuries that are reflected in the post-accident medical records supported by standard orthopedic and neurologic testing?  What was the  range of motion deficit identified by the treating physician and to what extent does it  to verify the musculoskletal injury? Do the x-rays show loss of the normal curvature of the spine caused by muscle spasm?    Does the doctor relate it the injuries to the  accident even considering the low property damage and why?  Was the injured party symptom free prior to the accident? If so, is there any other explanation for the development of the symptoms other than the subject accident? Does the MRI show disc bulges or herniation?  Do the bulges or herniations cause nerve root impingement or irritation consistent with the patient’s symptoms? Did the symptoms develop within a few days of the accident? In determining what injury was caused by the accident, jurors must compare the patient’s condition before the accident to how the patient’s condition after the accident.

Since your job as jurors is to be fair and impartial, you must consider both sides of the story on low property damage motor vehicle accident cases in rendering your verdict.

The picture above is from an accident in which we represented a client in a low property damage accident.  The repairs totaled less than $500.00 to replace the bumper.  The case was tried to a Jury in the Short Trial Program. After considering the facts, including our client’s long history of similar, and chronic, back pain the Jury awarded $3,000.00 to compensate him for the medical bills incurred as a result of the accident and $9,000.00 in pain and suffering as a result of the accident.

Legal Liability of Physical Education Teachers and Coaches

Prior to becoming an attorney, I taught high school physical education in Western Pennsylvania for 12 years. I also coached  gymnastics and track.  I have a masters degree in the  scientific basis of physical education and sports.  I then came to UNLV to work on my doctorate in Education Administration.  I taught physical education classes at UNLV for two years prior to entering law school.

My education and experiences in these areas gives me the unusual background which enables me to comment on the topic of legal liability of physical education teachers and coaches.

The thing that exposes physical education teachers  and coaches to  more  liability than classroom teachers is “movement”.  The amount of student movement in the classroom is limited; therefore, the classroom teacher does not have the liability exposure of a PE teacher or coach.  Add to that the fact that PE teachers and coaches deal with many students moving at the same time. We also have projectiles mixed in with his movement – such as baseballs, softballs, footballs, tennis balls, discus, shot-put, javelin,  etc. – which can cause injuries.   We also deal with various instruments that propel these projectiles to high speeds.  These include bats, golf clubs and  tennis rackets, etc.  You get the picture.  So, because of “movement” the chance of  injury to  our students and athletes is exponentially higher than the liability of the classroom teacher.

The premise of physical education is that movement of the human body carries with it certain physical,  social and emotional benefits.   So there is no way to eliminate movement form what  coaches and PE teachers do.

Furthermore, your facilities are of greater size than that of classrooms.  There is more areas for PE teachers to cover and supervise.  Your facilities include both indoor and outdoor areas.

Many of you also must deal with the presence of water in the form of swimming pools and showers.

Obviously, no students or athletes should ever be left in a swimming pool without teacher or coach supervision.  A swimming pool should remain locked when not in use and the teacher or coach should be the first person in the pool and the last person out.  The danger of drowning and slips and falls goes hand-in-hand with pools and shower facilities.

It is my position that a PE teacher should be the first person into a gym or pool, especially when equipment is present which can create a potential for injury.  The gym or pool should always remain locked when not in use, and the PE teacher and coach should be the last to leave.  This rule is probably a bit  idealistic; however I strongly believe that it is necessary.

Accordingly, in order to prevent accidental injury to our students and athletes, PE teachers and coachs must be concerned with safety of students and athletes much more so than the classroom teacher.

The law that applies to the primary liability exposure  of a PE teacher or coach is “negligence”.  Under the law of negligence a person has the duty to act in a reasonable manner when it come to the safety of others.  If you create an unreasonable risk of harm (by omission or by commission) and somebody gets hurt, your are responsible for the injured person’s damages in the form of medical expenses, loss of income and earnings capacity and for intangible damages for physical and mental pain and suffering.

In Nevada , if you are acting within the course and scope of your employment with a city, county or the state, you have a statutory  limit on your liability exposure of $75,000.00.  However, teachers and coaches get involved with little league, midget football, AAU sports programs, etc.,  where they are not in the course and scope of your employment with a public school. Thus, not every liability exposure will be protected by the statutory cap on damages. Private school teachers do not have the benefit of this liability cap.

When we coach activities outside the public school, we often use our personal cars to transport students. This exposes us to potential liability for injuries caused by our  negligent driving.

If an at fault accident occurs while we are working for a public school, then the school district will pay for damages, subject to the statutory cap.  You will be protected by the cap and you  won’t have to pay, so long as you were  in the course and scope of your employment. When you are involved in coaching or teaching an activity outside of the course and scope of your employment, your assets  are personally exposed.

Therefore,  it is important to be concerned about safety, because following reasonable safety procedures is your duty of reasonable care to your students and athletes.  Anytime that you cut corners on any safety procedure, you can be exposed to potential liability.

If you belong to any professional association, they may offer liability insurance at a nominal rate.  Volunteer coaches may be protected by liability coverage of the league in which you involved.   If you coach, you should inquire into these types of liability insurance protections which may or may not be available to your athletic association or league.

There are many basic rules that can protect you from liability.  These are too numerous to list, however the following are some of the more basic safety rules:

 

  1. Don’t hide in your office between classes.  You have the responsibility to supervise your students.  They can wander off and get involved in all sorts of mischief.  Students can get into fights and altercations with other students which may require your intervention.  There  are many entrances and exits to a PE or athletic complex.  You and your fellow teachers and coaches have  the duty to provide reasonable supervision  these entrances and exits.  This will involve the establishment of a plan and cooperation of your co-workers.
  2. Always keep your pool and gym locked between classes.  Don’t give your keys to students.  These areas should be locked between classes especially when there is equipment set up in the gym. Always check the pool and gym for the presence of students and athletes before you lock the doors.
  3. Mats should always be under any equipment which creates the possibility that as student may fall.  The greater the danger the more matting is required. Never allow the use of any equipment without adequate matting.
  4. It is my strong opinion that some activities should not be taught in PE classes.  Gymnastics should be limited to basic tumbling and basic vaulting skills.  If vaulting activities are used then students must be individually spotted.  Most students do not have the strength to perform skills while hanging or supporting their bodies with their arms.  Therefore there exists the likelihood of falls. If the fall occurs while some is in an inverted position this can cause is spinal injuries, paralysis and even death.  Trampoline (including various types of mini tramps) should ever be taught in PE classes.  If these tramps are used in extracurricular activities such as cheerleading and gymnastics, make sure that there is you have insurance to cover accidents.  You may be surprised that many insurance companies  won’t insure trampolines, or the premium for this coverage may be unaffordable.
  5. For example, remember that even innocent activities  like softball can be dangerous if basic rules are not followed. When there is a fly ball students must be instructed to call for it, and the persons not calling for the catch should back off.  There is always a risk of collision between students  especially when you have 30 students on the fielding team and not just 9.  Head to head collisions and collisions between large and small students carry with them the likelihood of serious injuries.  Remember that there are safety rules that apply to all sports.
  6. Check surfaces where water is present to determine if slip resistant surfaces are inadequate or worn.
  7. Do an inspection of your facilities on a monthly basis.  Report any maintenance repair problems to your maintenance department and to the school administration.
  8. Use appropriate safety equipment for each sport or activities.  If eye protection is reasonable then make provisions to obtain and to use it.
  9. Keep non-participating students out of harms way.
  10. If a student gives you a doctor’s excuse follow the physicians instructions.
  11. Go over safety rules with your students for each new sport or activity.
  12. Do not use strenuous exercise to discipline or punish students. Consult with your school nurse to determine if you have any students who have medical conditions that cannot tolerate any strenuous activity. Never have any physical contact with any student, unless he your safety and the safety of your students is in jeopardy.

When I taught PE, our high school district established a safety committee.  One person from each department was assigned to identify and report  safety hazards to buildings and grounds (maintenance) and to the superintendent.  We identified hazards and immediately repaired them so that they would not be a source of potential injury.

Risk management is concerned with the identification, assessment and control of risks that can endanger students and cause injuries.  Identifying risks is critical to safety.  Risk probabilities can be dividend into he following categories:

 

  1. Very likely to occur- high potential for serious injury.
  2. Some chance of occurrence- high potential for serious injury.
  3. Small chance of occurrence- high potential for serious  injury.
  4. Very little chance of occurrence- high potential for serious injury.

These should be addressed immediately and given high priority.

When the risk involves a medium and low potential for serious injury, these potential risks should be immediately addressed but should have less priority of than those risks which have the potential for serious injury.

Much of what is presented in this article may seem like common sense procedures to you. If this article does not trigger any proactive response from you, go back and read it again, because when it comes to safety, there is always room for improvement.

There always will be risks that cannot be fully identified, prevented or contained. Chances are that you will not be held responsible for those types of  risks because they are not foreseeable.  In preventing accidents decisions should be made that will prevent accidents thus mitigating your liability exposure.   Always be proactive and when it comes to preventing accidents and make sure that you have adequate insurance to protect your personal assets.

Nevada Auto Insurance Companies – Potential for Settlement of Car Accident Claims

INTRODUCTION

I was browsing the internet recently for information on auto insurance company settlement ratios.  The first information that I found involved the country of  India. That post stated that  insurance company settlement ratios ranged from 97.03 per cent to 53.85 percent.  Most  settlement ratios went down slightly from 2011 to 2012. This may be due to the current worldwide economic conditions.

I then found the website for Ohio Department of Insurance which indicated that in 2011, Ohio residents paid $5,056,298,077.00 in auto insurance premiums. Of that, State Farm companies collected about $959,000,000.00 and Allstate companies  collected $429,000,000.00. The complaint ratio for Ohio is  one complaint for each million dollars of auto premiums paid.  Insurers on the Ohio list include Allstate companies, American Family, Farmers, Geico,  Liberty Mutual Noationwide, Progressive, Safeco,  State Farm and USAA, which also are carriers that write auto insurance in Nevada.

I then came across a post entitled Top 6 Worst Auto Insurance Companies – 2011  on the Michigan Auto Law Blog.  This article listed Dairyland Insurance Company as receiving the  Worst Insurance Company in Michigan Award.

Allstate and State Farm were  rated 3d and 4th worst.  Allstate was criticized for cutting payments to its own customer as a way to boost its profits.  Further criticisms were for the use of a computer program designed to reduce claims payments, and for  pushing  injury victims to accept quick, but very low, settlements.

State Farm is the number one provider of auto insurance in the county. In 2009 it had a $777,000,000.00 profit nationally.  Michigan is a no-fault state.  State Farm is the most aggressive insurance company in Michigan accusing its own customers of fraud and putting them under investigation and fighting payment of their no-fault insurance benefits.

Progressive was the winner of the Michigan Auto Law’s Worthless Coverage Award, indicating that Progressive’s uninsured motorists coverage was worthless.

There are many internet postings indicating that Farmers is rated the worst insurance company overall.  They had the most complaints in California, Washington, Texas, Oregon, Arkansas, Arizona and Colorado.  They were criticized for worst ratings for collision repair, overall claim experience, worst claim  settlement representative, worst claim process and settlement procedures and consumer reports ratings. Their employee salaries and bonus encouraged and condoned delay, denial and underpayment of claims and forced litigation of claims.

Affiliated, subsidiary, sister and related companies of Farmers include domestics state companies with the Farmers in their name,(Example: Farmers Insurance Company of Arizona), Truck Insurance Exchange,  FFS, FIG, Fire Underwriters Association, Foremost Insurance Company, Mid Century Insurance Company, Prematic Service Corporation,  Truck Underwriters Association,  Civic Property and Casualty, Exact Property and Casualty, Bristol West Insurance, Neighborhood Spirit, Zurich North American, Zurich Financial Services Group and 21st Century Insurance.

Based upon my observations in handling personal injury claims against insurance companies for the past 30 years, I have come up with the following chart which rates the settlement potential of the major auto insurance carriers doing business in Nevada.  If you are a claimant you may want to refer to this chart to before you criticize  your attorney for not promptly settling your auto insurance claim.

BEST SETTLEMENT POTENTIAL

State Farm is by far the most solvent insurance company in the world. The chance of his insurance company becoming insolvent, I am told, is very low.  They are the number one auto insurance carrier in the nation.  Therefore, they can afford to pay more to settle an auto claim than any other insurance carrier in Nevada.  I do find that State Farm is quick to assign special investigators to first party claims where any fraud is alleged.  They will hire an attorney who will subject the insured to EUO (examination under oath). In the EUO the first thing that the attorney doses is to read insurance fraud statutes into the record and they have told my clients that they are sending a copy of the EUO  transcript the Attorney General.

WORST SETTLEMENT POTENTIAL

It is very difficult to settle car accident claim against Farmers Insurance in Nevada. I am told, and experience bears this out,  that Farmers doesn’t offer more than 1.3 times the claimant’s medical bills to settle a  pre-litigation personal injury car accident claim.  Farmers will also try to devalue the injured victim’s medical bills.  This makes it almost impossible to settle a Farmers claim, unless the claimant has Medical Payments Coverage that pays for all he claimant’s medical bills. Therefore, the chances of settlement of a Farmers claim are dismal  and litigation is almost necessary.

Farmers will pay car accident claims that have a value well in excess of their insured’s liability policy limits.

In litigation Farmers mostly uses in house counsel. Their in house counsel are very busy.  Each attorney has handles a lot of cases.  The attorneys are generally likeable individuals.  They sometimes, on egregious liability claims (i.e. drunk driving) or very high property damage car accident claims, will settle prior to an arbitration hearing or trial. In most cases, if the claimant gets a good arbitration award they will be willing to offer a more reasonable settlement offer, generally less than the arbitration award, to get the claim settled.  In some cases they will agree to pay the arbitration award plus any costs and prejudgment interest that may be awarded by the arbitrator.  Farmers, I believe tries to weed out those cases where the claimant’s attorney does not strongly believe in his client’s case to the extent that he is willing to go thorough litigation to get a higher settlement for his client. I believe that this strategy works with some attorneys.

Mercury,  Dairyland, American Access, Prudential and Progressive Insurance are companies that write a lot of minimum liability policies $15,000.00/$30,000.00) for their insureds.  They employ a strategy to low ball cases.  They do not want to pay out their minimum limits. They hire aggressive attorneys to handle cases and they often make you go through the time consuming arbitration program. And, when you win the arbitration, then they will exempt the small case out of the short trial program and now the attorney is in normal litigation.  In normal litigation the cost of trying  the case, including the cost of paying doctor to come to trial to testify,  is in many cases higher than the amount in controversy.  Of course, the down side exposure to the client associated with not prevailing in excess of a low offer of judgment is very high.  This potential downside exposure could be tens of thousands of dollars to the claimant. This puts pressure on the attorney and the claimant to accept a lowball offer of judgment served by the defense.

Progressive writes a lot of a minimum policies because of their television commercials and low premium advertisements.  Often they  get large claims against minimum policies and there is no underinsurance available. In these cases you try to get their insured to personally contribute to the settlement. However, with or current economy (most people don’t have any saving) this strategy doesn’t often work.

MEDIUM POTENTIAL FOR SETTLEMENT

Companies that fall into this category  are Geico, Allstate, USAA, American National, American Family, Met Life and  Nationwide.  However, these companies do not like low property damage cases. They do not like case that involve any questionable liability or comparative fault.  If there is comparative negligence element involved with a claim, they offer only a minimal settlement, and force the claimants attorney in litigation. On low impact cases they will hire biomechanical expert to inspect the vehicles, and he always renders an opinion  that nobody could have been hurt in the accident.

CONCLUSION 

The purpose of his article is to give you some indication of how various insurance companies in Nevada will react to your claim. You need to know what you are  up against on an auto insurance claim. This is the only way that you can make an intelligent decision to either settle or not settle your claim. I think that it is good policy to  explain to each client the adverse insurance company’s idiosyncracies on settlement , so that the client can be prepared for what is likely to transpire on his claim.

There Was a Car Crash and My Vehicle is a Total Loss or Has Major Damage – What Rules Apply?

STORY LINE

A friend of mine recently was involved in a parking lot accident in which his two-door luxury vehicle sustained major damage.  Eventually his vehicle was taken to a certified repair facility for repairs.  After repairs were approved by his insurance company, they called him and advised him that another frame rail was bent and the extra cost of repair made his vehicle a total loss. The additional repair cost for the frame rail was about $3,000.00.

His insurance company offered him $31,000.00 for the total loss value of his vehicle.  My friend considered that price to be unfair.   He told his insurance company that his vehicle had a premium plus option package instead of a premium package.  His insurance company thereafter informed him that the premium plus option package increased the value of his vehicle and advised him that his vehicle was not a total loss and again authorized repairs. As of this date, the final disposition of this property damage claim has not been determined.

WHAT RULES APPLY TO TOTAL LOSS AND MAJOR DAMAGE?

TOTAL LOSS

Approximately one out of seven vehicles involved in an accident results in a total loss.

  1. A total loss in Nevada involves a vehicle that has been damaged to the extent that the estimated cost of repair, not including the cost associated with painting any part of the vehicle, would exceed 65 percent of the fair market value (Actual Cash Value-ACV) of the vehicle immediately before the damage was incurred.  Vehicles with less than 65 percent damage are not considered a total loss and are not salvage vehicles.  If your vehicle has damage of  65 percent or more, it is considered a salvage vehicle.  The actual cash value includes sales tax, DMV and transfer fees.
  2. Your vehicle also can be considered a total loss if it has been submerged in water to a point that the level of the water is higher than the door sill of the vehicle and the water has entered the passenger, trunk or engine compartment of the vehicle and has come into contact with the electrical system of the vehicle; or a vehicle that is part of a total loss settlement resulting from water damage.  An insurance claim for water damage will be under your  comprehensive coverage.
  3. Non-repairable vehicle- A vehicle, other than an abandoned vehicle, that has value only as a source of scrap metal, or has been designated by its owner for dismantling, or has been stripped of all body panels, doors, lights, etc., or has been burned or destroyed beyond a restorable condition is a non-repairable vehicle.  Non-repairable vehicles are issued a Certificate and may not be restored to operating condition. If your vehicle qualifies as a total loss it becomes a salvage vehicle.

Vehicles Over 10 Years Old

Older vehicles, 10 model years old or older, are not considered salvage vehicles if the only repairs needed are a limited number of items. Specifically, the hood, the trunk lid, and/or up to two of the following: doors, grill assembly, bumper, assembly, headlight assembly and taillight assembly.

If the vehicle requires more repairs than this, the 65 percent rule applies.  For example, the 65 percent rule would apply if the grill, front bumper and one headlight assembly were replaced.  If only the hood, the grill and the bumper were replaced, the 65 percent rule wound not apply and the vehicle would not be considered a salvage vehicle. Remember that the 65 percent rule does not include any cost of paint or labor to paint the vehicle.

You Can Choose to Retain the Total Loss Vehicle

Before you decide to retain a salvaged vehicle you should consider the following:

  1. The  insurance company will deduct the salvage value of your vehicle from the fair market value of your vehicle. If your vehicle is a total loss and has a fair market value of $10,000.00, the salvage value may be only $2,000.00.  So, if you retain the salvage you only get $8,000.00 from the insurance company. You can retain salvage and sell the salvaged vehicle to a salvage yard perhaps for more than the salvage value, however this option may not be worth your time. Or, you can choose to repair the salvaged vehicle on your own.
  2. In accordance with NRS 487.860, a vehicle that has been issued a salvage title may not be registered in Nevada until it has been inspected by a Nevada registered garage, Nevada licensed body shop or Nevada licensed re-builder and the DMV.

License Plates

If your vehicle is total loss, remove your license plates from your vehicle. Your options are:

  1. Transfer them to another vehicle within 30 days.
  2. Surrender them to the DMV and apply for a registration fee refund.  You must have a copy of the Salvage Title to apply for a refund.
  3. Surrender them to the DMV and receive a credit toward another registration.

You must transfer or surrender the plates before your cancel the liability insurance on any vehicle.

Application for Salvage Title 

If you have collision/comprehensive insurance coverage and your vehicle is totaled,  your insurance company will assist you in completing the Salvage Title procedures and application. If you do not elect to retain the salvaged total loss vehicle, you must transfer Title of your vehicle to the insurance company, and they will pay you the full fair market value on your vehicle. Once the Title is transferred, the insurer will have the right to the car as well as the duty to dispose of it.

Salvage Titles

A salvage vehicle means a motor vehicle, that at any time, has been declared a total loss vehicle, flood damaged, or non-repairable and has the term salvage or similar words placed on any title issued for the vehicle.

Salvage vehicles in Nevada are issued an orange-colored Salvage Title. An original Title is blue. A salvage vehicle may not be registered or operated on any public street until it has been rebuilt and inspected.  Once a salvage vehicle has been repaired, it becomes a rebuilt vehicle and may be registered and/or sold if the proper procedures have been followed.

Fair Market Value

Be aware that your idea of fair value and you insurer’s idea  fair value may differ drastically. Remember that you have the right to a fair settlement and the right to negotiate with your insurance company to get one. The insurance company has leverage over most claimants because the claimant often needs to get paid to get into another vehicle.  Only if the claimant is financially solvent, can he decide to keep fighting with the insurance company to get a fair settlement.  A fair settlement is receiving the amount you’ll need to by a like car, or a car of the same or similar model and the same year and condition of your totaled vehicle.

Records of  past maintenance and repairs, including costs can be helpful in the fight to obtain a fair total loss value from the insurance company. This does mean a dollar-for-dollar increase in value for the cost of the repairs, however the repairs will factor into the actual cash value calculation.

You have the option of seeking professional help if you still can’t get a fair  settlement value for your vehicle.  The question is, can you can afford it? You have the options stated in your insurance policy. Your policy may provide  for  an independent arbitration. You can always hire an attorney. Both courses of action will lead to additional expenses and delay . Before entering into arbitration or suing your insurance company, make sure it’s worth the fight and the extra costs.

Insurance companies rely on allegedly independent appraisal companies or computer programs to calculate the final amount that they will offer on a total loss.  Total loss adjusters make the initial assessment of value, and then enter information about the vehicle such as milage and condition, usually resulting in a lower settlement.  Remember that fair market value is not the Kelly Blue Book value on your vehicle. It is considered a value which is somewhere between the fair price to purchase a like vehicle from a dealership and the price to purchase a like vehicle from a private party.

Total Loss and NO Insurance

If an insurance company is not involved, and there is no third party insurance; and, you do not have collision/comprehensive insurance coverage, it is your responsibility to assess whether your vehicle meets the definition of a salvage vehicle. You must notify any lienholder within 10 days, and the lienholder must apply for a salvage title with 30 days.

When there is no lienholder, you must you must either apply for a salvage title within 30 days or sell the vehicle to a DMV-licensed salvage pool, automobile auction, re-builder, automotive wrecker or a new or used motor vehicle dealer.  You may not sell the vehicle without first obtaining a salvage title

When you retain a salvage vehicle, the re-built vehicle must be inspected by a licensed garage or body shop and the DMV before it can be sold or registered. It is he owner’s responsibility to complete these steps and to obtain a standard blue Nevada title  before the sale.  If your retain the vehicle but choose not to rebuild it, you should sell it only to a DMV-licensed salvage pool, automobile auction, re-builder, automobile wrecker or a new or used motor vehicle dealer.

Improperly selling a salvage vehicle can be a felony offense.  Sellers must disclose in writing that the vehicle is a salvage vehicle. All future titles will be normal Nevada Certificate of Title but will be “branded” which means that title will be labeled with the word ‘‘rebuilt” or other appropriate term.  The brand cannot be removed.  Any purchase may  considered a felony offense if the vehicle is valued at $250.00 or more.  Any aggrieved purchaser or lessee also can bring a civil suit against the offender.  If successful, the purchaser will be awarded court costs, attorney’s fees and whichever of the following is greater:

  • Three times the amount of actual damages;
  • Five thousand dollars; or
  • Actual damages such as punitive damages as may be allowed by the court.

VEHICLES WITH MAJOR DAMAGE – DIMINISHED VALUE

If your vehicle major damage but is not totaled, what are your rights? All insures must be pressed to recognize and pay diminished value.   A diminished value  report will cost you about $59.00 and can be obtained from Claim Coach. Even though insurance companies will always tell you they don’t pay diminished value on your repaired vehicle, they are potentially on the hook for the diminished value of your vehicle.

Diminished value is the reduction of a vehicle’s market value occurring after a vehicle is wrecked and repaired.   A reasonable person will not pay the same price for a wrecked-then-repaired vehicle as he would for a vehicle with no prior accident history.  Even if the repairs are proper and certified, the vehicle will still lose value.  To collect diminished value from an insurance company is very rare.

In Nevada there is no case law, that I am aware of, involving diminished value. There is case law in other states on diminished value, but these cases involve large and expensive vehicles such as large boats and commercial airliners. It appears that nobody wants to go through the expense of and appeal to make case law on an insurance company’s obligation for paying diminished value on a repaired  passenger car. If we did have such a case that reached our Nevada Supreme Court, this could prove to be very problematic and financially detrimental to auto insurance companies in all states.

If you want to receive fair market value on a totaled vehicle and if you are looking for receiving diminished value on a repaired vehicle, be prepared and be ready to fight the involved insurance company.  Get your supporting  documentation together and  persistently bombard the adjuster with your arguments.  Who knows,  you may eventually wear them down.

If you have a rare, expensive or classic vehicle, you may want to consider obtaining stated value insurance. With stated value insurance, if your vehicle is totaled the insurance companies, must pay you the stated value.  This coverage is more expensive with traditional auto carriers, but  is much more affordable with specialty insurance companies dealing with classic and restored cars.


SEO Powered by Platinum SEO from Techblissonline