Reasonable Value & Insurance Companies

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Reasonable Value & Insurance Companies

Postby BIGGRIN » Thu Nov 05, 2009 1:55 am

I was riding through a roundabout last week and was T-boned by a car. I was about to exit the roundabout unfortunately the driver failed to give way. My bike went under the car and I was lucky to be thrown forward. The car nearly crushed my foot and I ended up at the local hospital A&E for x-rays to check all was OK etc. Happy to say I'm alright, just one extremely lucky individual. I had 2 days off work to get over the worst of the bumps and bruises and generally feel OK now, except for occasional back stiffness. The crash was reported to the police and the driver has been more than helpful connecting me with their insurer. I was advised to provide one quote to repair or replace the bike by the driver’s insurer. Photo's of the damage were also provided to the insurance company. The car drove over the rear stay (no obvious structural damage to the frame, apart from heavy grazing). The rear wheel is cracked in half, rear derailleur was ripped off, front derailleur bent, the whole drive train would have been damaged due to the impact, seat is bent, handle bars badly bent, both STI's shifters are bent and scratched, wireless computer was damaged beyond repair, Blaze 1watt headlight was broken and the carbon fork badly grazed down one side. I'm happy to report the bell was OK. The bike was a gift (40th birthday present) and has/had a full 10speed 105 Hollow-tech 2 group set with aluminum frame. I think the purchase price was around $1500 but I'm guessing since it was a gift. My bikes shoes, spray jacket, pedals and cleats were also badly damaged and were submitted as part of the claim. I obtained 3 quotes from LBS's out of curiosity and they all came in within $100 of each other (replacement value). The gear was received in August of this year so it’s about 2 months old and has traveled just over 720kms. Sorry about the long winded introduction.
While I was previously asked to get a repair/replacement quote by the insurer, they are now advising me that they will only pay market value. While I'll was mentally prepared for a low ball offer, I nearly fall of my chair at work when advised of their assessment. I received a call today advising I would receive $700 for my bike. They obtained 1 quote from their LBS. I'm being sent their claim dispute process forms for review, as I'm obviously not happy with their offer. I don't understand how a 2 month old bike could depreciate over 50% in value. I hadn't intended to claim for other damages, as I would’ve been happy to have my pride and joy replaced. Unfortunately I now have to consider further claims for time off work, pain and suffering etc, to try and claw back the price of getting back on the road. I have free access to a lawyer and will consider that option to assist this process if and when necessary. My preference is to talk through this claim rather than bothering with the legal eagles.
The reason for my rant is to get some feedback on two things. Firstly, a way of calculating reasonable market value for my bike, any advice on how to calculate reasonable market value would be appreciated. My bike is/was a CELL TEAM with full 105 group set (I was impressed that the bike's frame handled the car's impact). Secondly for those in WA, has anyone had any experience with the Insurance Commission of WA, I was wondering through their third party provisions if their services would be applicable under my circumstances.
Any objective feedback would be appreciated.

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Re: Reasonable Value & Insurance Companies

Postby rustguard » Thu Nov 05, 2009 5:47 am

even at market value that is too low, just the groupset would cost more than that. They are trying to screw you bigtime. contact the guy who hit you and get him to make enquirees as I assume you would have to recover costs from him? he wrecked your bike let him deal with them. send the repair quote to him tell him they wont pay so he has to. (in a polite way of coarse)

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Re: Reasonable Value & Insurance Companies

Postby Max » Thu Nov 05, 2009 6:06 am

I'm very pleased to hear you're OK. Also, very pleased to hear that the bell made it through unscathed!!!

I can't give you advice on either of your specific questions, but can relate to you the story of my mate who was hit by a car a couple years ago. The bike was an absolute write-off, and he was moderately injured too (lost consciousness, some headaches, back pain). The insurance company came to the party and replaced the bike and his accessories without too much drama. What he didn't anticipate was just how much medical treatment he would ultimately need. His head injury has resulted in some "vagueness" - he sometimes cannot remember having had conversations, or needs to be told things repeatedly for things to sink in. His back is still sore, years after the fact.

He got lawyers involved early, even though he, like you, was reluctant about it. I doubt that if he'd done it himself, that he'd be able to afford the medical treatment he's still receiving. Also, they made absolutely sure the insurance company didn't screw my mate over when replacing his bike. Long story short - my advice to you is to get lawyers involved. It might seem unpleasant, but more unpleasant is dealing with a disinterested insurance company as "the little guy", and realising in a month that you need ongoing medical care and can't afford it.

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Re: Reasonable Value & Insurance Companies

Postby russellgarrard » Thu Nov 05, 2009 10:11 am

Tell them you won't take anything less than a replacement with an EQUIVELANT bike! The insurance company is trying to screw you. You didn't choose to be in the accident so why should you have to take anything less than a full replacement, especially with a bicycle that new!

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Re: Reasonable Value & Insurance Companies

Postby m@ » Thu Nov 05, 2009 10:39 am

Glad you came out of it physically ok - I'd book in with your GP to get the once-over and make sure there are no injuries that aren't obvious just yet though.

What is happening here is that the driver is shifting their problem onto you - the insurance company are likely well within their rights to pay replacement value only (in addition to medical expenses etc) - but this is between them and their client (the driver). It is up to the other party to make restitution to you - whether this is from their own pocket, their insurer or a bit of both is irrelevant and not your problem in the least.

It's not up to you to deal with the insurance company directly - what you should do is have your lawyer draft a letter of demand to the other party, listing your expenses and forward a copy to them in person or by registered post, with quotes etc attached. They then have a set period of time to respond; nine times out of ten the letter will do the trick as they want to avoid court as much as you do (or more so, since they know they were in the wrong). Your access to free professional legal advice puts you at a massive advantage - use it! Try to settle it out of court if you possibly can though - it will be a massive PIA at best if it goes to court. Even though you were not at fault, a civil court can find that you had contributory negligence (eg if you are judged to have been riding too fast for the circumstances), and split the costs of both parties on that basis... Tracking down any witnesses to the accident will help your case immeasurably if it does end up in court.

On the insurance agent's specified value - before buying my Cell Team I looked around for second-hand ones; couldn't find any advertised for less than $1000, and they were all a couple of years old and not the current model. So $700 even as 'market value' for an almost brand-new bike is ridiculous IMO - and as a depreciated value, that's 50% depreciation in two months - they are trying it on for sure! But that's up to the driver to sort out - all you have to do is supply the quotes.

FWIW - legally the driver should have remained at the scene of the accident until Police arrived. If they don't play fair - it's in your interest to push the Police to lay charges against them relating to the accident - this will then assist in your civil case. But I hope it doesn't come to that - we're not talking about a large sum compared to if they'd hit an expensive car - or caused you serious injuries - they should be thankful it was no worse, open their wallet and put it down to experience!

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Re: Reasonable Value & Insurance Companies

Postby arope99 » Thu Nov 05, 2009 3:50 pm

I had an accident in July 2009 when I got hit by a car, and my bike was written off. Bike was Sora equipped and bought for around $1000 in 2008. The bike was badly damaged especially the frame. I've got 3 quotes as well for different LBSs (including accessories), and the value quoted are pretty much close to each other. The bike value quoted are more expensive than my original purchase, as comparable new bikes in 2009 are more expensive due to the lower Aussie dollar. Then I sent one of the quote to the driver's insurance, which takes them quite a while to process, including sending an assessor to view my bike. But in the end, the insurance made a cash pay out to me equivalent to the value in quote. Luckily they never mentioned anything about paying market value etc. I was pretty lucky that when the money from the insurance is in my account, 2010 bike are just coming and plenty of discount offered to 2009 bikes. I managed to get may self an upgraded 2009 bike (Tiagra/105 equipped) from the insurance payout.

I think the insurance company should do the same for you.

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Re: Reasonable Value & Insurance Companies

Postby r2160 » Thu Nov 05, 2009 5:06 pm

Given that the bike was 2 months old, my suggestion would be to tell them to replace the items. Simply give them a list of items including brands, and tell them you expect immediate delivery, and that they can collect the wreckage on delivery.

Good idea on the solicitors letter also. Given the size of the claim, legal fees for them could escalate pretty quick.

"Pain is temporary. It may last a minute, or an hour, or a day, or a year, but eventually it will subside and something else will take its place. If I quit, however, it lasts forever" Lance Armstrong

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Re: Reasonable Value & Insurance Companies

Postby BIGGRIN » Sun Dec 06, 2009 1:36 am

It's taken a fair bit of work but I think it's fair to say I won.

I took a step back to consider my rights rather than negotiate on their terms and came up with the following strategies.

Firstly, I took some time to understand available mediation processes, both with the insurer, the Financial Services Ombudsman, as well as the small claims court/tribunal (Magistrates Court in WA). From this perspective, I realized the insurer has substantial opportunity to show "reasonableness". Once I understood these processes, I decided to commit - I felt the insurers approach was unreasonable (in the extreme). I anticipated it would take up to 12 months to reach some sort of settlement.

Secondly, I discussed these mediation processes with the above agencies. I would encourage anyone caught in a similar situation to take this approach. In particular, the Financial Services Ombudsman was very helpful. They gave some very clear advice, not only the obligations of the insurance company, but also how to enhance my strategic approach to reach settlement.

Thirdly, I contacted the original insurance assessor (low quoting mongrel) and advised I'm consulting with the Financial Services Ombudsman, the local Magistrates Court and requested a copy of their dispute resolution process. I ensured my dealings with the assessor (low quoting mongrel) were polite and professional in all instances.

Fourthly, I hopped onto the front foot and contacted the insurer to identify their list of preferred LBS bike companies, then went and obtained quotes. In most instances, I obtained quotes above the repurchase value of my gear (value $2k, quotes obtained were $3K.). This was a lot of work but paid dividends when settling. Some of these companies were hostile, be warned (especially toward bikes purchased over the internet).

In the end a lot of these steps were not required. However, what it did do was reinforce my belief that my chain was being yanked. I was seriously pissed and was going to follow this through.
I can't put my finger on the actual step that changed their mind from unreasonable market value to full replacement assessment. However, it's probably due to the fact that I'm a persistent bugger and was going to cost them a lot of time resolving a small claim. The persistent requests to meet face to face to discuss my claims were continually avoided. It was during my 9th phone call that the insurer changed their tune. Now I'm having fun getting my new bike and accessories.
From a Cell Team and accessories worth approx $2K they have just reimbursed the purchase of a Malvern Star Oppy 2009 and $640 worth of accessories. Getting a better bike and gear than originally owned was appreciated, especially since I was the one that went through the pain of being T-boned by a car and was lucky to escape without serious injury.

Thanks to Blazing Saddles Cyclery in Scarborough for their help and humour as I bumbled my way through this exercise.

In summary, the squeaky wheel makes the most noise?

I'm planning to send the original insurance assessor (low quoting mongrel) a Christmas card.

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Re: Reasonable Value & Insurance Companies

Postby Colin_T » Sun Dec 06, 2009 2:00 am

Congrats on getting the bike replaced and sticking it to the insurance company. They can all rot in hell as far as I'm concerned.
Depending on which state you live in, there might be a gov organisation that deals with compensation claims for motor vehicle injuries. In WA we have the SGIC (state gov insurance commission). These guys will pay for medical expenses and possibly give you a pay out depending on how much physical damage you suffered, including long term damage.
I mention his because I got clobbered by a car some years back and told the SGIC I was fine. However, I then spent the next 2yrs getting physio for a recurring back and neck problem, and I had to pay for that out of my own pocket.
If you have any pain or discomfort from the accident, get it checked by a doctor and have the offending motorist's insurance company pay for it, or see if the gov insurance will pay for it. Do not sign your rights away until you are 100% well and fully recovered from the accident.
Kicked a black cat? Sounds more like ran over one, backed over it, hunted down its mother and did the same.

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Re: Reasonable Value & Insurance Companies

Postby Driftwood » Mon Oct 02, 2017 6:10 pm

Obviously some time has gone since the original post however I’m sure this has been very helpful to many people, myself included who have been or are going through a similar process.

Great followup BIGGRIN!

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