Wednesday, August 10, 2016

Accelerated depreciation BC and ICBC, no longer necessary to sue in certain situations.


Accelerated depreciation is not a new legal issue.  I think it’s fair to say, though, that some lawyers have had experiences with these claims and others have not. 

Accelerated depreciation is what happens to the value of a vehicle when it has been damaged in an accident and then repaired.  Let’s take, as an example, a 2016 Toyota Rav4 worth $36,000 and sustains $15,000 in damage.  If the owner chooses to sell the vehicle after it is repaired, the transfer documentation include a declaration that it has sustained more than $2,000.00.  This will alert a purchaser to the fact that they are purchasing “damaged goods”, and there will be a negative impact on the vehicle’s value. 

ICBC has, historically, been very resistant to these claims.  Their reasonable concern is that if these claims are readily acknowledged and paid, the floodgates will open.

Many of those collisions result in damage costing more than the $2,000.00 threshold.  Most have no idea of this notion of “Accelerated Depreciation”, and those who do know about it have no idea how to approach that aspect of the claim.

As I talk with customers, a pattern emerged.  Many had conversations with personal injury lawyers who advised them that they would have to pursue their claim through Small Claims.  With only a few hundred, or a few thousand dollars of loss, most were not inclined to enter into the murky unknown of a lawsuit and the claim would die. 

The purpose of this article is to outline the process for claiming accelerated depreciation without the small claims process. 
In my conversations with people across Canada, I found it interesting that ICBC has been the most progressive insurance company with regards to accelerated depreciation claims. 

Although no company policies have been publicly published, there has been a shift in how ICBC deals with these claims.  It is the excellent work of those personal injury lawyers who have included accelerated depreciation losses to claims that has undoubtedly resulted in this shift, most recently Rutter vs Adams which awarded accelerated depreciation sustained to a Toyota Matrix.

My personal experience, working as an advocate for many clients for whom accelerated depreciation is their only crash related loss, is that there is a divide in ICBC with regard to how these claims are being handled. 

There are particular situations where the likelihood of getting paid accelerated depreciation at the adjustor level is quite good, and there are situations where it is less likely.  We will focus on the situations/circumstances where the likelihood of success are greatest.
The below circumstances are the ideal elements, in which, I have continually seen the greatest success in achieving fair, financial compensation for the accelerated depreciation loss without the need for a law suit:

1.        Liability is not at issue, i.e. 100% of fault was assessed on an ICBC insured driver
2.       The claimant owns the vehicle and or is financing the vehicle (not leasing)
3.       The vehicle does not need to be sold but if it has been sold this helps to solidify the claim
4.       There may or may not have been an injury but the claimant is not pursing an injury claim with a lawyer

If the above requirements have been met, the claimant may simply inform their adjustor that they will be pursing an accelerated depreciation claim.  According to the ICBC Material Damage Manual:
If the claimant indicates a concern, either to the adjuster, estimator, or Express Repair participant, that the vehicle value may have diminished as a result of the accident, the adjuster, estimator, or Express Repair participant must immediately notify the Manager Estimating Services or designate.
At this point the adjuster or designate will inform the client they can will need to quantify the loss.  That’s where an independent appraiser can come in.

A customer can expect to pay in the neighbourhood of $200 - $560 plus costs for an appraiser’s researched opinion of the value of the Accelerated Depreciation claim.  This expense can include a physical inspection of the vehicle, review of the documentation related to the damage sustained and the repairs, and careful market research.

Once ICBC has been provided the appraiser’s opinion, ICBC will assess the valuation independently and provide their offer.  At the time of this article, it is my understanding that there is no set protocol or procedure mandated by ICBC to determine the loss, but it is up to the adjuster to determine their own assessment.

Rob Fournier
Independent Vehicle Examiner

The Fournier Auto Group

Saturday, July 23, 2016

Google Review - Five Stars

Highly recommend getting Rob Fournier to get you back the money you deserve on the financial loss you have suffered on the value of your vehicle. I had an extensive amount of damage done to my new car by a negligent driver. Although ICBC paid for all the repairs I was still at a loss for the depreciated value of my vehicle. Rob provided me with an Accelerated Depreciation Report which got me my lost value back from ICBC. I was able to keep it out of court which was a huge time saver and spared me the stress. Rob was also very helpful, insightful and professional. From my personal experience I would recommend Rob's services to anyone who is facing a similar circumstance. Teha Lagah

Saturday, April 9, 2016

It's time to amend the $2000 accident declaration law in British Columbia

My understanding is that this law was brought into play in the 1970s.  Its obvious purpose was to make sure consumers knew when they were purchasing a vehicle that had previously sustained damages of $2000.

This law made sense in the 1970s when a head light was $20.  Today it is not uncommon to see LED headlamp assemblies that can cost over $2000 for a single unit.  The cost of parts and repairs have increased dramatically and unfortunately this law has stayed the same.

The one interesting this about this law that most people don't understand is that you must declare any damages that cumulatively exceed $2000.  This is not per incident, but if you have numerous damages that add to more then $2000.

Example would be a 2012 Rav4 Limited

2012 - Windshield replace - $700
2013 - Bumper damaged and repainted $1500

$2200 in damages

This owner must now disclose a $2000 declaration.  Take a look at the wording used on the tax transfer.  "Cumulative Vehicle Damage".

 

Consequently this law causes the unnecessary loss of vehicle value, due to having to declare an accident history, when in some instances there is no need to lose value.  Accelerated Depreciation / Diminished Value could be mitigated in some instances if this law was amended to be more appropriate for 2016.  If you don't know what Accelerated Depreciation is - Click Here for the CBC Marketplace Episode.

Do you want to add your voice?  Sign the Change.org Petition - Sign Here


Wednesday, April 6, 2016

2016 Judgement awarding Accelerated Depreciation





Rutter v, Adams
2016 BCSC 554

[311]      As a result of the first accident, Ms. Fletcher’s 2006 Toyota Matrix sustained damage that cost $9,282.46 to repair.  She says that its value was reduced as a result.  When Ms. Fletcher and Kevin Fletcher became frustrated with repeated trips to the automotive repair shop and what they viewed as inadequate repairs to the vehicle, prepared it for sale.  It was a fully loaded 2006 Matrix, which appeared to be in reasonably good condition.  As they did not believe they would be able to sell it privately with its history, they traded it in at a dealership.
[312]      The defendants dispute this claim.
[313]      Mr. Scarrow’s Accelerated Depreciation Assessment Report, dated September 8, 2011, includes the following:
It is my opinion the result of the collision repairs upon the vehicles Actual Cash Value was accelerated in terms of depreciation by Two Thousand Five Hundred Dollars [$2500/Cdn.] plus applicable taxes.
[314]      As set out in Signorello v. Khan2010 BCSC 1448 (CanLII), such losses can include a “loss of use and the inconvenience of having to return the vehicle on several occasions” (at para. 33).  I am satisfied that the Fletchers suffered these losses.  Their claim for damages for accelerated depreciation and loss of use is allowed in full.  I award $2,500.

Link to Judgement - www.canlii.org Link to Rutter v Adams, 2016 BCSC 554

Wednesday, March 16, 2016

#Dieselgate



#VWDieselgate‬ - We have had a lot of people ask us our thoughts on what impact the TDI Diesel controversy will have on the resale of VW TDIs. If you are not aware, VW recently got caught cheating emission testing equipment on certain TDI models. Our understanding is that when a TDI was hooked up to a machine to check its emissions, the vehicle would recognize a machine and adjust its engine management to reduce its emissions to pass the test. Once removed from the machine, the vehicle was revert to higher emissions. One of the reasons, this may have occurred is because engine performance often comes at the cost of higher emission. Higher performance often equals more pollution. So in this case VW could advertise better performance then they could actually provide inside of emission standards.
We recently had a great conversation with a used car manager of a Volkswagen dealership. What he shared is that they are not able to sell their new TDI vehicles. This is obviously not great for them and not great for people who want to purchase. However it has pushed up the value of low mileage used TDIs. People want them and due to supply and demand the costs of good used TDIs are maintaining their value and even selling for more. This is almost seems to conflict with what one would imagine would happen to the value of goods offered by a company caught in, what some would consider, a scandal.
So if you are looking to sell your low mileage TDI, now might be the time.

Monday, August 3, 2015

Is my car worth less after an accident?



It really depends on a number of factors.  

The technical term for this loss is accelerated depreciation (in Canada) and diminished value (in the US)


Here are a five factors:

  1. Severity  - The final cost to repair a car doesn't always signify substantial damages.  You have to dig deeper than the total final cost.  We have seen a Porsche that had $11,000 brake rotors.  You really need to understand the damages.
  2. Structural damage?  Understanding if a vehicle has sustained structural damage is a bit more of a complex situation.  Structural damage is more than just frame damage. In today's age of Unibody construction, there is more than just the frame rails to consider.  Good body shops will go through the repairs to explain if there was any structural damage.
  3. The market - Depending on the market, an accident may or may not have an impact.  If you have a mass produced vehicle that has sustained damages of $10,000 it may be more difficult to sell, due to supply and demand.  A 2012 Dodge Grand Caravan with a $10,000 may be more difficult to sell due to the supply and demand.  If there are 500 of these vehicles for sale in the exact same color / option combination then why would a buyer pay the same for a previously damaged version.
  4. Confidence - Confidence plays a large role when determining how much a car is worth.  If your vehicle is damaged and you do not understand the damages, it will be difficult for most to sell. Putting the damages into context is an important part of maintaining your vehicle's value. Understanding the breakdown of the repairs is always important.  Some insurance companies will include the cost of the vehicle rental into the total cost of repairs.  In some instances, this can be upwards of $1000. 
  5. Quality of repairs - If the repairs are apparent, it may be more difficult to sell a vehicle for top dollar.  Is it not only the responsibility of the body shop completing the repairs to return the vehicle to pre-accident condition, it is your responsibility as well.  It is unfortunate when accidents occur and it is even more frustrating when the accident was not your fault.  But you still need to do what you can to mitigate any losses.  Making sure the body shop repairs your vehicle properly is ultimately your responsibility.  If your body shop will not fix the vehicle properly, there are ways to involve the insurance company to get your car fixed.
If you've been in an accident and you need help, feel free to give us a call.  We are here to help!

778-908-2804
or


Wednesday, July 1, 2015

Accelerated Depreciation / Diminished Value FAQ

Accelerated depreciation FAQ

What is accelerated depreciation?

Accelerated depreciation, also known as "diminished value", is what happens to a vehicle after it has been damaged and then repaired.  Depending on the value and type of repairs, this depreciation can fluctuate.  For an in-depth explanation Click here.

Am I eligible to claim accelerated depreciation?

The laws and processes in which accelerated depreciation is determined varies depending on the location of the accident.  The following information pertains to British Columbia only.

The 2 components of an eligible accelerated depreciation claim are:
·          You are not at fault for the accident
·          There was another driver involved who is at fault.  There must be another person to name in the case of a lawsuit.  We have not seen success in accidents involving animals, hit and runs or vandalism.

Where do I start?

This depends on your situation, listed below are a few scenarios and the associated paths.

Scenario 1 - Your vehicle was involved in an accident where the following apply:
o    you were not at fault,
o    you were not injured
o    your insurance company is WILLING to pay accelerated depreciation

In these situations, you will need to hire an expert to assess the losses and provide a report which is given to your adjuster (our services). Ideally, your adjuster will accept the losses and compensate you for both the losses and the cost of the report.  We have seen this happen before, as recently as last week (June 2015).

Scenario 2 - Your vehicle was involved in an accident where the following apply:
o    you were not at fault,
o    you were not injured
o    your insurance company is UNWILLING to pay accelerated depreciation

There is where you would need to follow these steps - Do it yourself - Suing for accelerated depreciation

Scenario 3 - Your vehicle was involved in an accident where the following apply:
o    you were not at fault,
o    you were injured
o    you have chosen to hire a lawyer

Your personal injury lawyer would represent your accelerated depreciation claim at the same time as your personal injury claim.  Make sure your lawyer understands that accelerated depreciation is an important part of your claim, as some will not represent property losses

Scenario 4 – Your vehicle was involved in an accident where the following apply:
o    you were not at fault
o    you were injured
o    you have chosen not to hire a lawyer

In this situation, your adjuster may choose to accept an accelerated depreciation claim to minimize the potential risk of a personal injury lawsuit. Please refer to Scenario 2.

Links:

Online articles related to Accelerated Depreciation in Canada

Precedent Cases

The Fournier Auto Group Ltd. Provides Accelerated Depreciation reports:
Services - 
Services

Sample Report - Sample Accelerated Depreciation Report
For a free consultation call 778-908-2804 or Click here to submit a “Request for a free consultation with an IVE"