CB HI

Unrealistic for you maybe, but after getting screwed on a military household goods moving claim, I learned how to play their game. Out of five bicycle claims over the last 30+ years, only one adjuster tried the 30% depreciation crap on me. The same guy claimed that the bicycle helmet looked perfectly fine and he would not pay anything for a new one. I unloaded on him that he KNEW that every helmet manufacturer insisted that helmets MUST be replaced for safety after any accident no matter how good the helmet looked. Because of his willingness to risk my life on the helmet BS, he lost the game and paid full price for a new bicycle, helmet and a month worth of a better rental bicycle.

He also refused to allow me to rent a car rather than a bicycle. Little did he know that the bicycle rental would cost more than I could have rented a compact car on discount.

D1andonlyDman

The helmet move WAS bogus. But the fact is, but not for that, 30% depreciation on a bike is very legitimate. And you most certainly CAN buy a 1 year old bike for at least 30% less than a new one. You may have been able to work the insurance company over because of the helmet, but the simple fact is, you got MORE than you were entitled to get, only because an agent tried to screw you over. You were not made whole by the insurance, you were made more than whole. Which is good for you, but frankly people who work the system the way you did means that the rest of us end up over-paying for insurance.

KonAaron Snake 

This is exactly right in every respect.

I will add a couple of things based on my experience fighting with an insurance company...

First, there are probably state rules about their obligation to settle quickly and fairly...I'd find out what the rules are in your state and complain.

Second, these guys operate on the time value of money principle, as well as the idea of attrition. They have charts that say claim x is worth this much range in court...with this much risk. It's worth xxx two days before court. Xxx a week after the claim. Etc. Once an adjuster decides on xxx, my experience is they don't move too far off that number until the day before court. On that day they move, partially depending on the ability/rep of your attorney. In your case, since we're talking minimal damages in terms of the bike, we're probably not talking about a lawyer unless you have other damages. I'd find a lawyer in your area and talk to them about damages. Note - their fees can be negotiable depending on how solid your case is and the money in play.

Geneally speaking, insurance companies loan the banks money...they are about the biggest players in the park and they have a lot,of leverage up until the day of trial.

njkayaker

The OP isn't asking for "whatever amount".

CB HI

By your claims, If a motorist totals my 15 year old Litespeed that is in perfect condition, then I would owe the insurance company a whole bunch of money since by your math, my bicycle was worth less than nothing by a factor of 5 times. Your not getting screwed because I got fair compensation for damages and the time it takes to be made whole. You are getting screwed because of all the bad drivers out there.

PS - all of my bicycles lasted at least 10 years with daily commuting of at least 24 miles per day; unless a motorist damaged them first.

D1andonlyDman

Obviously, you didn't understand what I wrote, by YOUR math. Depreciation is a percentage of the value at any given time. The value never gets to be less than zero. But it does become a small fraction of what the bike was worth when it was new.

CB HI

But you claim it to be about zero just after 3 years based on bike shop sales considerations rather than longevity of the product. Does blue book values go to zero at the 3 year point of an automobile? Of course not, proving the lack of a point on your part. Additionally, State Farm considered my 11 month old bicycle that their insured totaled to be at 0% depreciation (no value lose for the first year). So I did not even have to fight with them about some BS depreciation claims.

D1andonlyDman

At no point did I ever claim that. Most bikes are worth about half of what they sold for new after 3 years. If you start out with 30% depreciation in year 1, then depreciate that by 15% more each year, you'd be at about half of the original price (actually 50.6%) after three years.

CB HI

And yet, as I noted, an honest insurance will not depreciate at all during the first year for a bicycle.

D1andonlyDman

It's not honesty that makes them do that - it's a conscious tradeoff of their reputation for customer service, relative to the actual amount of cost savings (including their time, and their legal and administrative costs) that they actually hope to save. For a few hundred bucks, they could easily determine that it's not worth pissing off an established long term customer who they might wish to maintain. They may even be marketing their insurance as offering to replace a lost item with the value of a 1 year newer version of the same item - which would mean full replacement value for the first 12 months before any depreciation kicked into their settlement valuations.

There's nothing dishonest about paying a settlement at the actual depreciated value - unless their marketing pitch states that they are going to be doing better than that - and many insureres, including State Farm, and Liberty Mutual that I am aware of, as well as others, actually do market by using that 1 year newer item for replacement valuation.

CB HI

So the insurance company screws current customers by making some more whole (as you claim I was made) just to get more customs. Hardly seems fair. You should object to the insurance companies about their practices rather than complaining about what I got out of a claim.

D1andonlyDman

Feel free to justify it in your own mind however you wish - it's pretty apparent you don't understand what I've been saying.

I have no need to object to insurance companies. I have received two insurance property loss settlements in my life, both were on cars - one was totaled in a wreck, and one was stolen. Both were fair settlements. The first one, I needed to push for the fair valuation, but when I did so, with evidence of what legitimate comparable cars were selling for in the secondary market, I got a reasonable payout. The second time, the payout was fair from the get go. But both of those cars were cars that I had bought used, after they were each more than 4 years old, and it is the first few years of any car's life (the same is true with bicycles) when the depreciation of the value is the steepest.

I-Like-To-Bike

Really? Take a year old bike back to where you bought it, or anywhere else, and see how much cash you are offered for it on the spot.

bikemig 

You're kidding right?

I-Like-To-Bike

No, realistic; try it sometime, instead of wishful thinking or making pious statements about what is "fair". Just like the other posters on this thread who think depreciated value is determined from a ratio of predicted/estimated serviceable years for a product and the fraction of those years used, rather than actual cash value to anybody else.

Try selling a one year old car (with or without lots of user "upgrades"), or a washing machine, or TV or anything else, anyplace, and tell prospective buyers the car or other item has only depreciated 1/10th or 1/20th of the new price because after all these items can be expected to last 10 or 20 years and that you will accept nothing less than the new price minus your "fair" version of depreciated value.

FBinNY 

Tort law is based on making the victim whole. That means repairing the damaged item, replacing it with a comparable item of similar age and condition, or paying him a cash sum sufficient for him to buy a comparable replacement.

So fair compensation isn't based on what the victim might have been able to sell his bike for under fire sale conditions, but what he could buy one for. In actual practice, there's a fair sized spread between these two prices, and it's up to the insurance company to demonstrate that the sum they are offering is adequate to easily find a comparable replacement.

If it were a car, they'd use the retail Kelly Blue Book value. For a bike, they'd have to find comparable ones for sale in shops or on selling sites. In any case, the burden of demonstrating that comparable bikes are available for the sum offered is on the insurance company. In cases, where there's not enough of a marketplace to establish the cost of a replacement, an arbitrator would resort to estimating the percentage of useful life the victim had and deducting that from the original full value claim.

So the OP just needs to hang tough, and convince the adjuster that he intends to take this to the end, and demand that the insurance company pay what he's willing to accept, or find him a comparable replacement bike.

Camilo

I sure don't know Canadian customs, laws or procedures on this. But in the US, would't the OP's claim be against the driver of the car - not the insurance company? My understanding is that you never have to accept the insurance company's settlement - you can go after the driver if you're not happy with it. It's the driver, not the insurance company that is liable, and the insurance company is paid to cover that liability. But the driver ultimately has to pay if the insurance won't cover it for whatever reason.

I believe he should take the driver to small claims court, not the insurance company. That's what happened when I was involved in an accident and the other party didn't like what my insurance company offered - they took me to SC court, not my insurance company (I won, btw and the judge determined that my liability was the same amount that the insurance company had offered)

Document with receipts and other documents the total price of the bike (price paid) including upgrades. Come to small claims hearing with that documented value.

Then, come armed with a good faith, reasonable current value for the bike. There is no legitimate "blue book" for a bike. But you can come with your own and some other expert opinions on the expected normal life span of a bike ridden by a recreational bike rider. I'd call it 10 years.

Convince the judge that it is a reasonable life span, original value and therefore a reasonable way to estimate current value bases on years of use to date. I believe this is not a difficult thing to do from my experience in small claims court. For ambiguous things like this, the judge will probably simply look for a reasonable way to calculate the damages (current value), in this case based on original price, age, predicted life span.

If the bike is a year old, I believe a resonable settlement, given the hard line of the insurance company is that the judge would award you $2,700 on a 1 year old $3,000 bike. The judgement would be against the driver, and it's up to the driver to get his insurance company to cover it.

The Quiet One

I don't know if this helps, but a co-worker lost his house to a fire. He had some unusual stuff that was hard to value. He used Ebay to establish value by finding similar items. Since it's a recognized marketplace, the insurance company accepted the final sale prices as the legitimate values. He felt he got a fair settlement from his insurance company.

FBinNY 

Yes, sort of.

from my post No.33

BTW- If you go to court, don't sue the insurer, they're a 3rd party to the case, and you have no obligation to speak to them. Sue the driver and/or owner of the car and let them insist that the insurer cover them and get them off the hook.

Your claim is against the driver and/or owner of the car, and where it goes from there depends on the specifics of the contract between the driver and his insurer. Generally the insurer is obligated to act s attorney for the driver, so you ultimately end up dealing with the insurer in that capacity.

KonAaron Snake 

Which makes an interesting conflict of interest...

The insured party's interests are best represented by a quick and speedy settlement of the claim. The insurance company, actually paying the attorney, usually uses the time value of money, delay, delay, delay approach. The same attorney is, theoretically, representing both. This is why they usually only settle at reasonable numbers right before trial...they can claim they acted in the interest of both parties.

FBinNY 

On a small claim like this there is no conflict, unless the driver claims he's not responsible for the accident, and doesn't want the claim paid at all.

Otherwise, the driver is 100% covered and out of the picture, since he bears no financial exposure. So the driver is a party to the transaction in name only, and the insurance company speaks for him as his attorney, and settles the claim as his insurer.

This doesn't mean the victim has to accept any offer. He has the option of going to court and letting a judge decide what is a fair settlement.

KonAaron Snake 

I'm speaking theoretically. If the driver is insured at 50k, and I have a claim, I may seek more than 50k...which would impact the driver. There is an inherent potential conflict when the same attorney represents both the insurer and the insured, who can have different interests.

Over damages to property that won't approach the insured amount, you are correct.

FBinNY 

Yes, in very large claims that may exceed the coverage limits, there is the question of how hard an insurer may work to prevent claims above the limit. Once the insurer is convinced that they are paying the max, they may no longer care about the client's exposure. However, the insured is the attorney's client, not the insurance company, and he's legally obligated to do the best for his client. Often this means convincing the victim to accept the policy limit and settling, rather than lose time and expenses chasing a higher payment that may not be collectible anyway.

KonAaron Snake 

I think this is naive to the point of silliness and I think you know that. The guy paying the attorney his money is the real client. If the insured is the real client all claims would be settled quickly at the maximum of the policy.

CliffordK

For a $1000 or $2000 claim, the insurance company has a big motivation to not go to court.

It is the lawyers that have an inherit conflict of interest. The more they can drag the process out, the more fancy boats they can buy.

And the insurance companies know that. Go to court, and they still have to pay the claim. Plus pay for their own lawyers and legal fees. Plus pay for your lawyers. Plus paying all the court fees. A $2000 claim can easily cost $20,000 or more in the courts.

Yeah, the insurance adjusters can drag out the process a bit, but still, they must be paid. And the more claims they can process, the fewer employees the company must hire (and less management, buildings, computers, etc). And they still don't want to get mired in legal fees.

Another reason to settle the case quickly is to avoid any personal injury claims. Close the case and they're pretty much off the hook. Drag it out... and suddenly you have a stroke which may or may not have been related to previous injuries... and the battle just gets bigger.