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What is a Total Loss Automobile Insurance Claim?
A total loss claim is made when an automobile insurer decides that an accident vehicle is too damaged to repair or is simply not worth repairing. If the insurer finds that an accident vehicle is a total loss, they are required to pay the policyholder the car’s Actual Cash Value (“ACV”), meaning the value of the car immediately before the total loss accident. The ACV is determined by looking at prices of similar cars in similar condition to the accident vehicle, also called “competitor vehicles.”
What are the problematic charges?
The Projected Sold Adjustment and Typical Negotiation Adjustment both rely on the theory that used car purchasers will always negotiate downward from the dealer’s list price. These charges therefore reduce the accident vehicle’s ACV by an amount meant to represent the discount gained through negotiation. Our claim alleges these charges are illegal for a number of reasons, including that:
- they are arbitrary and deceptive;
- they reflect an outdated and untrue understanding of the Canadian used car market; and
- they are determined in ways that skew the data to benefit insurers, including by ignoring cases where purchasers paid amounts equal to or greater than a dealer’s list price.
The end result is that insurers relying on Mitchell and Audatex valuation reports undervalue the ACVs of total loss accident vehicles and undercompensate total loss accident claimants.
Who is Included?
“Class Members” are proposed to include individuals who meet ALL of the following criteria:
- he/she/they made an automobile insurance claim against one of the defendant insurers;
- the insurer determined that the accident vehicle was a total loss;
- the insurer relied on a market survey report or valuation report in which a Projected Sold Adjustment or Typical Negotiation Adjustment was applied to the list price of at least one competitor vehicle;
AND
- he/she/they were a resident of Canada (excluding Quebec) at the time their claim was made.
If you believe you might be a class member, or if you have information about other insurers who rely or relied on Mitchell or Audatex valuation reports, please contact our offices at:
Gluckstein Lawyers 595 Bay Street, Suite 301, Toronto, ON M5G 2C2 416.408.425 | Wagners Law Firm 1869 Upper Water Street, Suite PH 301, 902.425.7330 / 1.800.465.8794 (toll free) |