Important News for Car Owners in San Francisco – The Appraisal Clause provision in California can be invoked by either the vehicle owner or the insurance company when there is a disagreement over the valuation of a car that has been deemed a total loss. This applies to the entire state. Under this provision, either you or the insurance company can demand an appraisal. Each party selects a competent appraiser. Ideally, these appraisers will reach a fair settlement amount. If they disagree, the appraisers will select a neutral umpire. An amount that any two agree upon is binding. Each party pays its own appraiser; the umpire fee is shared.
The Appraisal Clause in California may be invoked by either the vehicle owner or the insurance company when there is a dispute over the value of a vehicle declared a total loss. This provision applies statewide. Under this process, either party may demand an appraisal. Each side selects a qualified appraiser, and those appraisers attempt to agree on a fair settlement amount. If they cannot reach an agreement, they will jointly select a neutral umpire. Any value agreed upon by two of the three parties is binding. Each party is responsible for the cost of its own appraiser, while the umpire’s fee is shared.
The appraisal, adjustment, and settlement of total loss automobile claims in California must follow strict standards. Determining a vehicle’s value requires researching comparable vehicles and using reliable valuation data from accepted computerized services. A comparable vehicle is one of like kind and quality—produced by the same manufacturer, of the same or newer model year, similar model type and body style, and with comparable options and mileage. Newer model year vehicles may only be used when there are insufficient same-year comparables available.
In assessing the value of a comparable vehicle, the appraiser may rely on either the asking price or the actual sale price. Adjustments may be made to account for differences between the comparable vehicle and the insured vehicle, provided those adjustments are reasonable and supported. Comparable vehicles must have been available for retail purchase by the general public within the local market area within ninety calendar days of the final settlement offer.
If suitable comparable vehicles are not available within the local market during that time frame, the appraiser may instead rely on the average of two or more quotes obtained from licensed dealers in the area. If valuation cannot be established using these methods, the appraiser must support the conclusion with proper documentation and provide a clear explanation of how the value was determined.
Car owners should be aware of California’s protections against Unfair Claims Practices by insurance companies. Attempting to settle a claim for less than the amount to which you are entitled by reference to written or printed advertising material accompanying or made part of an application, failing to settle claims promptly, failing to provide promptly a reasonable explanation of the basis relied on in the insurance policy, in relation to the facts or applicable law, for the denial of a claim or for the offer of a compromise settlement. No insurer shall persist in seeking information not reasonably required for or material to the resolution of a claim dispute. No insurer shall attempt to settle a claim by making a settlement offer that is unreasonably low. The Commissioner shall consider any admissible evidence offered in determining whether or not a settlement offer is unreasonably low.
There is an additional fee of $275.00 to represent you in Appraisal Clause negotiations.
California Department of Insurance
320 Capitol Mall, Sacramento, CA 95814
800-967-9331
https://www.insurance.ca.gov/01-consumers/101-help/
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