Every day in Ontario, hundreds of cars are stolen, and hundreds more are damaged beyond economical repair, or ‘totalled’. If you experience this misfortune, the insurance company may offer significantly less than you believe your vehicle to be worth. As a customer, what are your rights and what are your options?
First, review the documents from the insurance adjuster. Make sure that the details of your vehicle, such as mileage, condition and options have been captured correctly. I’ve had files cross my desk where an adjuster has used visibly damaged clunkers with over 300,000 km as the basis for establishing ‘fair value’ of a low mileage vehicle in great shape.
There are 3 steps that one can take to address the situation. Personal negotiation, use of an independent appraiser, and referring the matter to an appraisal umpire.
Negotiation is self-explanatory. If the difference in values is relatively small, and/or there are obvious errors in the description, then speak with your insurer. We have many good insurers in Ontario, and often these differences are resolved with dialogue. If this is not successful, then it is time to retain an independent appraiser.
Section 128 of Ontario’s Insurance Act gives insurance customers the right to obtain an independent appraisal. In turn, the Act requires the insurer’s appraiser and your appraiser to see whether they can agree upon a fair value for the vehicle in question. Most claims are resolved by this point, unless the disagreement is so significant that a neutral third party, the ‘appraisal umpire’ is required.
As the name suggests, the umpire is to decide which of the two appraisals best represents the value of the vehicle. The umpire is chosen by the two appraisers, and if they cannot agree, they can ask the courts to decide. The umpire’s fees are split 50/50 between the parties. In one matter last year, the umpire awarded our client almost 400% more than the insurer’s best offer.
Though having to make a claim is seldom pleasant, in Ontario, insurance customers have the right to invoke the options above to ensure that they get fair value and fair treatment, no matter the circumstances.