Stolen Car: Frustrated with insurance company's tactic in determining the car value. How can I see justice done?

I saw this letter in the New Straits Time letter section and share it here. I am doing that because this topic is of much interest to many of us. Basically, who determine the value of a car, the insurance company or the franchise holder of that car/dealer or generally accepted price as printed in the newspaper. I would have thought the writer has a strong case of getting his figure. Thanks.

I BOUGHT a Toyota Harrier for RM180,000 in May 2003. It was insured for the full amount on the advice of the insurance clerk involved. Five months later, it was stolen.

The insurance company was informed the same day and all the documents were submitted within the next few days. Then, silence.

After several calls and reminders, an adjuster arrived on Dec 31, 2003. He took some photographs, had a short interview with me and left promising that things would be settled soon. Then, silence again.

Knowing that the market value is always taken into consideration, I collected paper cuttings (which included estimates from AMFinance and the Cars, Bikes & Trucks pullout from NST) and obtained information from car dealers that the value of the car was estimated around RM175,000 as at October 2003.

After prodding the insurance company with several calls, I was told certain documents were missing. I promptly resubmitted them.

Then came the shocker. In late March this year, I was made an offer of RM120,000 as settlement for my claim. A RM60,000 depreciation in five months! This young man at the insurance company refused to even look at proof of the car's value as at October 2003. I refused the offer. I asked the same young man at the insurance company to get me a replacement vehicle of the same age, value and condition as stipulated in the insurance policy.

Nothing happened again. No proposal as to a replacement vehicle was made.

I feel that this run-around is an insurance company tactic to tire the insured so that finally out of frustration, the poor insured will just settle and move on. Will someone help me see to it that justice is done?

S.S.
Kuala Lumpur

Likewise you should stop pussy footing around. Begin with a stern letter of demand. In the letter you demand what you are entitled to and make a note of the date of your complaint and the time of the responses. Identify the issues such as the date and time of claim and the time it had taken the company to respond.

The mitigation they may seek to raise is an old and tired cliched defence that you failed to mitigate your losses. Rubbish I say. You are right. They do wate time to wear you down.

They took your premium contracted to protect you and have now defaulted. Time to put the boot in and call in the lawyers. You may also pursue reasonable costs including the cost of the lawyer.

Go for it and do it now!!!

There is a provison in the policy that says that "The market value of a vehicle would be determined in the even of dispute by the Head Office of the Franchise-holder and this value would be equal to the cost of replacement vehicle of the same make, model and age of Your Vehicle." I think it would be to the insured's advantage if the franchise-holder were to provide the valuation. Franchise-holder has an interest in its produce and would not value the vehicle too low as to make the sale of its cars unattractive. But a Franchise-holder could be wrong in their valuation because they are not in the business of second hand car market. If you think that this particular franchise holder has given a valuation which is below the market value, then you should ask it to sell you a car of similar make and model for the same price as the valuation they had provided.

My following comment to a related matter may be of interest to you.

"Your posting reminds me of a conversation with a Malaysian lawyer on his insurance claim some years ago. He had bought a new less-popular European car and having an accidents resulting moderate damage to the front. Insurance insisted on replacement with used parts and dragging the matter. The lawyer refused and insisted the parts should be new as the car was bought brand new only weeks ago. From what I understood then, there was a law that the insured could claim for the cost of getting a replacement car during the time of repair. He served the notice to the insurance company. This worked wonders. The full repair cost basing on the new parts which is a substantial proportion of that of the new car due to the high parts price of this less-popular models as well as the parts were not of the fast-moving [i.e. few people would buy it normally] ones, and some of the cost of arranging alternative transport was paid.

I suppose the importance is to ensure full record of all communication with the insurance company to show that they were properly giving the repair cost by reputable repairer [better from the car official dealer] and the company had delayed in the proper settlement process. My feeling is that most of these claims are handled by the administrators that are used to bully the insured that do not know their rights."

My further comment is to look at the relevant legislation government this insurance matter in Malaysia. I do not have this information with me now, so I refrain to touch on this.

In general, what is the "market" value of your car at the time it was stolen may get some assistance from the franchise holder quotation.  This is well regarded to be the best value in your favour. You may look into the availability of claiming the cost of using a replacement car at the meantime before your claim is settled.  Look at the fine prints of the policy or checking out with Bank Negara Malaysia (Insurance section) and Motor Insurance Association.  Of course, engaging your own lawyer would be an obvious choice.

I have a similar situation.  Need some good advise as to the next step forward.

I lost my Toyota Fortuner in April 2007.  It was a one-year old car.  I have just renewed, one month, my comprehensive insurance policy with RM150,000 sum insured.  In July 2007, they replied saying they would compensate me with RM130,000.  However, this value is much lower than the market value base on newspaper & Motor Traders publication - valuation about RM140,000.

I have appealed twice using these publications.  They refused to accept my appeal as the adjuster report was at RM130,000.

In such circumstances, a dispute of RM10,000, it is worth engaging a lawyer?  What alternative discourse can I take?  Is writing to Persatuan Insurance Am or Bank Negara of any help?

I think there are some short comings in our insurance company doing business here.  First, they do advise us on the right sum to insured.  Most often we over insured & thus over pay premium.  Then when things get wrong like stolen car, the expert opinion suddenly appears.  By right, the expert opinion should come before we renew our insurance.  What went wrong??If the second hand value is RM130,000 to start with, I have no issue to pay the lower premium & thus compensated at that value.

Looking forward to some good advise.

In response to the last communication, I have this to comment:-

For 'market value' valuation, Franchise-holder would hold some water. But at the same time, Jack is also right that they could be wrong in their valuation because they are not in the business of second hand car market. But in my opinion, the Franchise-holder is the better reliable source in which the learned Judge will recognise.

This market value thing has always been a subjective and highly disputable matter. Even second hand market value have 2 valuation. The used car purchasing valuation from consumers and their re-selling valuation back to the consumers. Again, it may not be just the make and year model of the car. It is also the road-worthiness and physical condition of the car that need consideration for such assessment.

Insurance companies practically has no control on the value the insured wish to insure his property/car. They cannot be scrutinizing each and every proposal. It is for the insured to know the value of his own property and to propose for insurance. Unless the sum insured is too way out, say for a Proton to be insure at RM200K for example, then the insurance company's underwriter should question. Otherwise, difference of a few thousands can be very subjective.

Will continue on this  subject again later as I need to hurry off for 'happy hour' now.

Insurance companies especial the agents, they used the strategy of 'Taroh first and talk later'. These are all rubbish. In Malaysia, insurance companies are not genuine ones and not sincere in their dealings and always use delay tactics.

As I read before: Are you going to pay your monthly premium and ONLY find out that you are not eligible to claim when things happen. Belief me, it's still better not to buy any form of insurance. Imagine after paying over tens of thousand over the years, one only found out that its not claimable because the person is a bankrupt and have no account to redraw the money.

As an insurance agent. I have experience yearly motor claims more than the yearly total premium collected for the past 7 years on a twelve months basis. Feel free to look at major motor Annual Report of any major motor insurance claim ratio. Example Kurnia Insuran, P&O, PanGlobal, Am Assurance,Uni Asia General, MAA General.

Statistic from Bank Negara, the director general of the insurance industry, show that the least profitable business portfolio are motor and medical insurance.
 
In Malaysia, the third party motor insurance policy on bodily injury is (unlimited) and property damage (2 million)for private vehicle. Last year alone the press has highlighted two(2) case of third party bodily injury awarded by the court of an expatriate couple for RM6,000,000 and RM9,000,000 for another case involving a two year old infant which left her paralysed for nine years and many many cases not mention in the press for your knowledge.  

As compare to Singapore & Hong Kong, third party bodily injury claim against motor insurance policy are limited to S2,000,000 and HK1,000,000 (Correct me if I am wrong),which make driver/insured more law abiding as the driver/insured may end up paying his/her own driving negligence by causing third party injury.

Where else in Malaysia, motor insurance agent are merely runners for road tax, visit finance company to get registration card,lining-up in JPJ to get road tax. Under paid but overwork compare to insurance company administration staff. No EPF, no sale no commission, no service no income, you cancel policy, agent vommit out commission earned(Clawed back commission). Low intergrity, low morale, but is it a sin to earn more money with this kind of government and inflation rate.

Medical insurance premium has experienced at least three(3) premium hike for the past ten years. The motor insurance which are tariff rated (PIAM) rating has not been revised for 25 years despite numerous appeal by insurance company and   professional bodies.

A better service means a better remuneration to this industry, a better law enforcement, and a better insurance knowledge to the public which are negligence about money and their risks affairs.

Third party premium for a private car policy as minimum is RM75.00 or RM158.00 without NCB Discount.
Assume that an insurance company collected premium from 1,000,000 cars with an average premium of RM100. RM100 x 1,000,000 cars = RM100,000,000.

1% make a claim of average RM500,000 on bodily injury claim ie. RM500,000 x 10,000 = RM5,000,000,000. (Com. go bust)
0.5% make a claim of average RM500,000 on B.I Claim ie. RM500,000 x 5,000 cases awarded = RM 2,500,000,000 (Bust)
0.25% "   "  "     ""   ""     ""      ""    ""                                         = RM1,750,000,000 (Co go Bust)

Malaysia is a country of first class infrastructure but 0 mentality and 100 % humanity (unlimited bodily injury), with no productivity.

Stolen Vehicle or Car Insurance Claims and Coverage

To be consistent and in line with the Motor business market trend, we are pleased to announce
the 'Agreed Value' Sum Insured for New Private vehicles. This benefit shall be available effective
immediately.

The terms of the Agreed Value policy are as below:

1. New Vehicle Registration (up to the first 5 years).

The Agreed Value policy is available ONLY for New Vehicles. This also applies to fully imported vehicles, under New Registration in Jabatan Pengangkutan Jalan (JPJ). This benefit will be provided for the initial 3 years of the vehicle. Upon 4th year renewal, this benefit shall be automatically ceased and the Sum Insured will be as accordance to Market value.

2. Sum Insured must not be greater than RM250,000.

The Sum Insured to be accepted as Agreed Value shall be no more than RM250,000. This is in accordance to the limit posed in e-cover note system.

3. New (first year) vehicle to be insured at Purchase Price.

The Agreed Value for the 1st year will be in accordance with the Purchase Price less the Motor Insurance premium and Road tax amount.

4. 10% Depreciation for 2nd and 3rd 4th and 5th year renewal.

The Insurance Company has set on 10% depreciation rate each year on the Sum Insured for the subsequent renewal on 2nd and 3rd 4th and 5th year.