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Your Beef: Why did insurer approve repair estimate without reader consent?

If the insurer doesn't come to a resolution with a BMW-owning reader, the reader may have a good claim against it.

Published June 26, 2012
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Q: I was not at fault in a serious car crash in September 2011. My new 2011 BMW 335 Xi was only six weeks old.

I chose a dealership, BMW-certified repair shop as opposed to an insurance-preferred shop. The adjuster notified me the car was deemed repairable and issued a $26,468 co-payable cheque to the shop.

I didn’t consent or sign a work order for repairs to proceed. The shop said it was verbal. The co-payable cheque was deposited without my signature.

I asked for their appraisal and, based on an independent appraisal I later obtained, I feel the BMW should have been a writeoff. Many items were omitted and $5,300 of additional hidden damages surfaced during repairs.

When I picked up my vehicle in February 2012, it stalled after nine minutes. Another $2,560 in repairs resulted.

Since then, further alignment and steering problems have arisen.

Total repair cost to date, $34,328 including taxes, salvage cost is $17,703 and actual cash value (ACV) is $50,580.

I don’t feel safe driving this car and the trade-in value for my vehicle is only $22,000. There are currently 8,000 km on the car.

Aside from the Insurance Ombudsman, what legal options do I have?

A: Toronto litigation lawyer Greg Chang (www.bcbarristers.com) replies:

The reader says he did not approve the initial appraisal (he was not even given a copy). So why did the insurer approve this $26,000 repair estimate?

Six months later, total repairs to date exceed $34,000 with continued problems reported. The initial $26,000 appraisal was just plain wrong. Were other options considered, like declaring this vehicle a total loss? Why was the $26,000 repair route chosen?

The insurer chose not to request a Proof of Loss from the reader and also decided not to require the reader to sign/approve the work order.

The insurer chose not to pay for a rental car for the insured from November 2011 to February 2012, so the reader incurred over $3,000 in rental fees. The dispute was that the insurer said that the car was “fixed” and ready for pickup. The reader disagreed and apparently hired someone to evaluate the vehicle. Without this disagreement having been resolved, the reader relented and picked up his car in February 2012, only to have it break down within minutes — leading to another month in the shop (during which time the insurer paid for a rental car).

Now the reader is awaiting further evaluation of his car, including potential structural issues.

The insurer may want to consider informally working to a resolution with the reader.

If not, then the reader is allowed to sue his insurer, per Section 263 of the Insurance Act. Since the reader was not at-fault in the collision, there will be no contributory negligence reduction taken into account.

The amount of damages will determine whether it should be brought in Small Claims ($25,000 limit) or a higher Court.

The reader’s potential damages claim are as follows:

Loss in the value — i.e. the typical “undamaged” vehicle’s value compared with the $22,000 trade-in offer for his current car;

Rental costs not reimbursed — $3,000;

Other expenses — if the reader has paid for an appraisal or evaluation of the car on his own, those costs can be claimed in the lawsuit as well; and

His legal costs, if successful.

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