Adjuster Estimates

Tags - Popular | FAQ  

PrevPrev Go to previous topic
NextNext Go to next topic
Last Post 02/24/2008 1:40 PM by  BobH
FMV of a religous article
 24 Replies
Sort:
You are not authorized to post a reply.
Page 1 of 212 > >>
Author Messages
Leland
Advanced Member
Advanced Member
Posts:741


--
02/08/2008 5:03 PM

    I'm guessing that most are familiar with the idea that Actual Cash Value of a used item can sometimes be determined by checking what an item sells for on Ebay .

    from an HO policy: "...."actual cash value means the market value of property in a used condition equal to that of the destryed property, if reasonably available on the used market."

     

    Lets say the insured belongs to a particular religion that uses a special device, which is sold to the members. The Church forbids the members from buying the item used- they must by it directly from the Church. Your insured has such an item that is destroyed. The policy pays ACV on contents.

    The items can be found on Ebay, but again, the insured has been told that it is wrong for them to purchase anywhere but from the Church.

    The particular version of the item was sold new for $3000, but available for $300 on the internet.

    What would you do as an adjuster?

    a) recommend settlement at $300

    b) recommend settlement at $300 plus shipping & handling

    c) recommend settlement at $3000 less depreciation, in order to avoid a religious discrimination issue.

    d) other

     

    0
    BobH
    Veteran Member
    Veteran Member
    Posts:759


    --
    02/08/2008 8:25 PM
    The Church forbids the members from buying the item used- they must by it directly from the Church.

    That doesn't sound "reasonable". Aside from that, this member paid full ticket for it once upon a time, and they don't demand you buy it at full price twice do they?

    For $300 he is returned to his Pre-loss condition.  If he has RCV coverage and shows a receipt for buying a new one, then his place in heaven is assured.

    Bob H
    0
    Ray Hall
    Senior Member
    Senior Member
    Posts:2443


    --
    02/08/2008 8:36 PM

    Agree with Bob. Insurors always have the option to repair or replace. If this was a church law it would not make any differance.

    0
    Leland
    Advanced Member
    Advanced Member
    Posts:741


    --
    02/08/2008 9:15 PM
    I think part of the issue is a question of "equity". I would agree with the $300 because isn't the carrier obligated to pay the ACV of the item in cash REGARDLESS of whether the item is ever replaced or can be replaced, or should be replaced, etc.

    All the company owes is the value in CASH. What the insured does with the money is up to the insured. So when the carrier takes the option to "replace" that doesn't actually mean that the carrier has an obligation to actually buy and deliver an item, does it? They can, but they don't have to, right? All they owe is the CASH MONEY that the insured could theoretically use to REPLACE if the insured wanted to. Is my thinking correct?

    This is actually a real situation. I really don't feel comfortable mentioning the name of the church.
    0
    okclarryd
    Veteran Member
    Veteran Member
    Posts:954


    --
    02/08/2008 10:00 PM

    I would suggest using the replacement cost of $3,000 and appying depreciation to arrive at an ACV of around $300 plus the shipping.

    Say, ................ $375.00.

    If the insured does, in fact, replace it with a brand new one and can provide documentation that he has done so, then the replacment cost provision of the policy would allow payment of the amount in excess of the ACV initial payment.

    The policy is a contract and it's provisions will apply to each loss. Only the laws of the land and their interpretations can modify the contract.

    However, to achieve really good customer service surveys, ...................................
    Larry D Hardin
    0
    HuskerCat
    Veteran Member
    Veteran Member
    Posts:762


    --
    02/09/2008 2:04 AM

    You could probably compare this to items with sentimental value, but unfortunately ACV still applies.  The solution, in hindsight, would be to schedule it just like any other valuable.  Now, if this was a property of the church itself, the settlement provisions and value (ACV) under the church policy would probably be viewed differently.

    0
    Medulus
    Moderator
    Veteran Member
    Veteran Member
    Posts:786


    --
    02/09/2008 11:25 AM


    Sounds like a unanimous decision in this round table of Knights Templar and long time and respected adjusters. I will add the "Amen". This former-pastor-turned-adjuster's opinion is the same as those who have ventured their opinion before me. The insurance policy is not subject to church law. It is subject to civil law.

    Steve Ebner CPCU AIC AMIM

    "With great power comes great responsibility." (Stanley Martin Lieber, Amazing Fantasy # 15 August 1962)
    0
    Ray Hall
    Senior Member
    Senior Member
    Posts:2443


    --
    02/09/2008 12:28 PM

    When an insurance company or any entity has the right thats what it means and payment of the ACV amount removes the obligation. Remember; "we have the right but not the obligation".

    I disagree with Larry if he thinks all losses start from RC,  less depreciation to arrive at ACV for a property loss. In this case this article never had an established value in the market place. It was just the price placed on it by the seller and agreed to by the buyer, but not he open market.This articles value is established by the closing of the market which in this case is when the offer to settle is tendered

    0
    JimGary
    Member
    Member
    Posts:470


    --
    02/09/2008 12:54 PM
    Though I have to agree with ya'll that the contract will allow ACV, I would hate to be the adjuster brought into court on this one. I would have to argue for RCV and get plenty of documentation from the church and supervisors.

    JWG
    I know the voices aren't real, but sometimes they're right!
    0
    BobH
    Veteran Member
    Veteran Member
    Posts:759


    --
    02/09/2008 1:07 PM
    I would have to argue for RCV
    No problem. Show me the receipt for replacement, and if you have RCV coverage it is a done-deal.

    If it's an ACV policy, then the analogy of driving a new car off the showroom floor applies. The guy had this thing in his possession, it was not sitting on a shelf for sale. As soon as you take it home, it is subject to the value that a buyer under no duress would pay for it on the open market. And on this example there seems to be some that had been sold or held for sale on Ebay, etc.

    I also consider court scenarios when I make decsions, and I have been deposed more than once. It's just one of the things to consider.
    Bob H
    0
    JimGary
    Member
    Member
    Posts:470


    --
    02/09/2008 1:50 PM

    The analogy of the car & showroom is valid, but where I think it falls short is, a person is not compelled for any reason to replace a used car with a new one, and used ones are available on every street corner, Because of the beliefs of the insured, they are compelled by church or God to replace the item at full rcv from the church. If you do not allow RCV you are infringing on their religious beliefs. Like the sliegh on the roof scenario, this one is far fetched, but I would have to still argue for RCV, if the supervisor wanted ACV then email me and attach to file, or document conversation. The religious aspect is the only hitch in it for me.

     

    JWG

    I know the voices aren't real, but sometimes they're right!
    0
    BobH
    Veteran Member
    Veteran Member
    Posts:759


    --
    02/09/2008 1:58 PM
    Because of the beliefs of the insured, they are compelled by church or God to replace the item at full rcv from the church.

    Gotcha, and they are welcome to do so. We will help them get where they want to go, by paying ACV per the policy provisions. They can come up with the rest of the money, like they did when they bought it the first time.  We aren't forcing them to buy a used one - we are talking about the amount of the check they receive in the mailbox. 

    I probably sound like a calloused A-hole, but I find it very helpful to focus on the insuring agreement. I acknowledge, but an not swayed by other factors including other peoples belief, anger, pushiness, time of the month, etc. It gets way too confusing if that other stuff enters the judgment process.

    The religious aspect is the only hitch in it for me.

    As an independent, working for lots of carriers over the years, one of them was "Church Mutual" and I'm sure many of you have done their claims as well. Of course they specialize in Churches, just like "Dentist Insurance" does dentists and I do their claims too. My point... they adjust claims just like anyone else. The policy holder has choices, how much protection they want, how much premium they can afford. ACV adjustments are the same on that church carpet as anywhere else if it is showing wear and tear.

    So you take this individual member of the church, and his homeowner policy in relation to this personal property item... and it really comes down to the loss settlement paragraph and that is the insuring agreement. Just do what it says.

    I have no idea what this item is, and acknowledge that there are some personal property items that do NOT depreciate, and the value on the open market may increase, not decrease.  Diamonds, fine art, etc.  But if Leland's example has them for sale on E-bay and there is a history of closed sales, then that has to be factored in.

    This isn't totally the adjuster's problem.  The Insured, and his agent could have scheduled this thing at a stated value along with his artwork and jewelry that they were concerned about.  If they didn't do their homework BEFORE THE LOSS then our hands are tied in terms of our options AFTER the loss.

    Bob H
    0
    JimGary
    Member
    Member
    Posts:470


    --
    02/09/2008 3:44 PM


    I probably sound like a calloused A-hole,

     

    No, I never suggested you were calloused.................Just kidding, its discussions like this that help us all when that "oddball" circumstance gets put in our pile. I'm still sugesting RCV, but agree the letter of the contract is ACV.

     

    I know the voices aren't real, but sometimes they're right!
    0
    BobH
    Veteran Member
    Veteran Member
    Posts:759


    --
    02/09/2008 4:00 PM

    Yep, that skin care lotion keeps my skin nice and smooth.

    But I still have the intake - and exhaust ports.

    Bob H
    0
    Ray Hall
    Senior Member
    Senior Member
    Posts:2443


    --
    02/10/2008 9:56 AM

    If a bench trial was held no court in the US would allow RC on this claim. I dont think any home office claim round table meeting would either..

    0
    Tom Toll
    Moderator & Life Member
    Senior Member
    Senior Member
    Posts:1865


    --
    02/10/2008 6:53 PM

    Dependent on type of device, it may be an exaggerated value to place more money in the church coffers. This is an ACV loss of $300.00 plus shipping, or what ever the used items value is after research. I agree with Ray, no carrier would allow RCV on an item like this. It apparently has an intrinsic   value, only to the Church.

    Success is not final, failure is not fatal: it is the courage to continue that counts.
    0
    JimGary
    Member
    Member
    Posts:470


    --
    02/10/2008 10:22 PM
    Since we have no other description other than "an item", I am assuming that it is unique item, specific to that one church. That being said, would the ebay value be more of a salvage value than an ACV. Or are we assuming that this is a common everyday item that a specific church has place an arbitrary value on for its members? That would also be a consideration for me.

    JWG
    I know the voices aren't real, but sometimes they're right!
    0
    BobH
    Veteran Member
    Veteran Member
    Posts:759


    --
    02/10/2008 10:31 PM
    would the ebay value be more of a salvage value than an ACV

    When I think of salvage, I think of a wrecked car or scrap from something that is no longer suited for it's intended purpose. If the item for sale on E-Bay is not damaged, and is simply used, I don't consider it salvage value.  It is Fair Market Value.

    I would pay what we owe when we know we owe it, and deal with the 1% that re-open as a 2nd chapter in the book. Sir would you like that $300 in twenties?

    Or are we assuming that this is a common everyday item that a specific church has place an arbitrary value on for its members? That would also be a consideration for me.

    OK, let's say the $40 coffee maker I just got has a value of $3,000 according to this group. Kinda like a fund raising dinner at $3,000 per plate, you know the meal isn't worth $3,000 but you are OK on contributing to the cause. Sir would you like that $40 in twenties?

    Keep in mind that this guy already made his donation to his church when he bought the thing orignially, and we aren't taking that away from him or his church.  We are settling a claim for Unscheduled Personal Property.

    Bob H
    0
    JimGary
    Member
    Member
    Posts:470


    --
    02/11/2008 8:00 PM
    Posted By Bob Harvey on 02/10/2008 10:31 PM
    would the ebay value be more of a salvage value than an ACV

    When I think of salvage, I think of a wrecked car or scrap from something that is no longer suited for it's intended purpose.

     

     

    Again assuming this is a unique item, it is no longer siutable for its intended purpose, according to the church.

    (and yes I know this is a stretch)

     

    JWG

     

    I know the voices aren't real, but sometimes they're right!
    0
    Linda
    Life Member
    Guest
    Guest
    Posts:35


    --
    02/23/2008 11:51 PM
    This is in some ways a case of not enough information. What type of religious article would drop in value from $3,000 to $300?? We don't know. That is a lot of drop.

    Religion is not part of the policy language and we only have what is between the first and last page on which to base our settlement recommendations.

    If a policyholder purchased his damaged carpet from an interior decorator at an inflated price, say $100 a yard vs. $50 a yard it actually could be purchased for at the local carpet company would we pay the $100 a yard or the $50 a yard? That's a no brainer regardless of whether or not the policyholder chose to again order the carpet through the interior decorator for the replacement. We owe for LKQ. If the policyholder chooses to pay the higher price that is out of his pocket so long as he has been indemnified for what he actually had.

    Ebay and other auction sites are blocked from some company computers due to the volitility of auctions on any given day. You cannot use auctions for pricing contents. What sells for $100 today may be $200 tomorrow and $50 the next day. Regardless of the popularity of the auction sites, they are not reliable for our purposes and dangerous for us to use as tools to settle claims. The sources must be consistant in values and availability for us to be able to use them.

    I would seek another avenue of determining a replacement value or acv as the case may be and base my payment recommendation on solid ground.
    0
    You are not authorized to post a reply.
    Page 1 of 212 > >>


    These Forums are dedicated to discussion of Claims Adjusting.

    For the benefit of the community and to protect the integrity of the ecosystem, please observe the following posting guidelines: 
    • No Advertising. 
    • No vendor trolling / poaching. If someone posts about a vendor issue, allow the vendor or others to respond. Any post that looks like trolling / poaching will be removed.
    • No Flaming or Trolling.
    • No Profanity, Racism, or Prejudice.
    • Terms of Use Apply

      Site Moderators have the final word on approving / removing a thread or post or comment.