Tuesday, 25 August 2009
The third Tuesday after the car was stolen was the day that things got really interesting. By that time I'd utterly given up hope on seeing my car again, and had already moved on and picked out the car that I'd most like to buy to replace my Civic: a Ford Fusion Hybrid, which I'd already test driven and loved. I was just waiting on Progressive to move on too, and that morning, they did.
The agent called me up and gave me an offer: $17,477. This was quite a bit less than I was expecting, and far less than I was hoping. This was even what I thought was a realistic hope, not a pie-in-the-sky lottery-winning hope. The important thing is that it was considerably less than what I felt was a fair price for the car. I had already come up with what I felt was a more accurate value for the car, and I told her that, but we didn't get into the specifics. She didn't really want to discuss anything, but she did send me along the valuation report that she had procured from Autosource to come up with that number.
The process is not quite what a lot of people would expect; it's not just a matter of giving me the Blue Book price for my car or the original purchase price. Instead, several local "comparable" vehicles for sale are adjusted and then averaged to come up with a price, and then taxes and fees are added. Theoretically, it's the amount of money that I would need to spend to go to a local dealer and pick up a theoretically equivalent car on the day of the loss. Washington State law and insurance codes are pretty specific on how comprehensive loss auto insurance works. Where there's a lot of room to maneuver is in deciding what counts as a "comparable" vehicle. There were three things that I saw that were wrong about the "comparable" vehicles chosen on that Autosource report, and those were the things that I would need to argue with her about to try to get a more reasonable amount of money from my policy.
The report listed fourteen vehicles, but only two of those had automatic transmissions. The other twelve were manual, but in the column for adjustments in value between that car and mine was $0, every time. That same report listed the value of an automatic transmission on my car as $800. So, I felt that an appropriate adjustment would be $800 * (14 - 2) / 14, plus tax. (You would get the same number if you added $800 to all of the manual cars and then re-averaged.) It turned out later that Autosource used 34 local cars, not 14, but only 14 were listed. The agent and I both missed that at first.
The second problem I saw is that the average mileage of the cars on the report was more than 10,000, but mine had 5,000. I didn't have any proof of that number, since it was just getting time to have maintenance done but I hadn't done it yet, so there was no record of my mileage other than the 6 on the original purchase contract. That difference in mileage worked out to be $215 by my calculations, based on how Kelley Blue Book values decreased by increasing mileage from 5,000 to 10,377. (Again, we weren't using KBB, but it was the best source I had for how much a mile is worth: about 4¢.)
Finally, in my original estimate, I was looking at certified preowned (CPE) vehicles. If I were to get a used Civic that's what I'd get, and I felt that they would most accurately reflect the condition of my car, which was excellent. It still smelled new. The difference in selling price of a CPE car and a regular used Civic in this area was $1,241. But, since those vehicles also come with a comprehensive inspection along with their excellent condition, which mine did not have, I decided it wasn't fair to adjust the estimate by that full amount, so I thought I should get half that. This was admittedly my most shaky request, and I didn't really expect to get any money in this area, but I needed something to "negotiate away" to reach a compromise between my numbers and hers.
Those three differences, with tax, came out to about $1,600. So, I asked for her original value plus $1,600, or about $19,150. That became my hopeful estimate. If you remove half of that shaky $1,241 you get $18,467, and that became my more realistic expectation. Armed with those numbers, which I felt had a pretty strong basis in reality and fact, I was ready to go to financial battle with the agent the next day. It's her job to try to get me to settle the claim for as little money as possible, and if I wanted more than that—what I would consider a fair amount of money for my car—I was going to need to argue my case convincingly.