Tuesday, December 17, 2013

"What do you mean my car is totaled?!!!"

One of the most frustrating and hard to understand parts of your car insurance policy can show its big, ugly head at the most inopportune time -- after you have wrecked your car and are in talks with the adjuster about getting it fixed, or in some cases, not getting it fixed, but having to sign it over to the insurance company for salvage value.

The article below, "When is A Vehicle Considered a Total Loss?," written by Gary Wickert, in the Dec 5, 2013 edition of Claims Journal, does a nice job of explaining the process and calculation of whether your car gets repaired or is totaled out.

In addition to the information provided in this article, keep in mind that sometimes you do have options.  For instance, if the Total Loss Threshold is close to the value of your vehicle, you may be able to negotiate a settlement whereby you keep the car and can repair it.  Now, you probably won't receive enough money from the insurance company to pay for the entire repair bill, but for a vehicle that is valuable to you, even if that value is mostly sentimental, this can be an option worth exploring.

When and whether a vehicle involved in a collision is considered to be “totaled” for first-party insurance purposes is an issue of great angst and confusion for most consumers. We hear horror stories about older, functioning automobiles being “totaled” simply because the frame is bent or other seemingly minor and hidden damage occurs. Even insurance professionals can get turned around navigating the maze of rules and regulations regarding the act of “totaling” a vehicle under a policy. But it needn’t be all that complicated. This article will hopefully help take the guess-work out of when a car can be “totaled.”
antifreeze leak after car crashTypically, cars are considered to be “totaled” when the cost to repair the vehicle is higher than the actual cash value (ACV) of the vehicle. Practically speaking, however, it is not always practical to repair a vehicle, even if the cost of repair is less than its ACV. A vehicle worth $4,000 requiring $3,000 in repairs might be considered “totaled” by an insurer even though the cost of repair is less than its value before the accident. Insurance companies will typically consider such a vehicle to be a total loss, even though the repairs are only 75 percent of ACV.
While the procedure varies slightly from state to state, the insurance company will typically take ownership of the totaled vehicle (known as “salvage”) and may obtain a “salvage title” for the vehicle. After it pays it’s insured the pre-loss ACV of the vehicle and forwards the certificate of ownership, the license plates and a required fee to the Department of Motor Vehicle (DMV), the DMV then issues a Salvage Certificate for the vehicle. In some cases, the vehicle is repaired, re-registered with the DMV, and then classified as a “revived salvage” or “salvaged” vehicle. Of course, if the insured wants to keep the “totaled” vehicle, the insurance company will deduct the value of the salvage from the claim payment.
The criteria for deciding when a car is a total loss and when it can be repaired vary from insurance company to insurance company and might even be dictated and controlled by state statute or regulation. Further complicating the issue is the fact that insurance companies do not all use the same sources for determining the value of a vehicle. The threshold used by your insurance company to make this determination can be discovered by calling your insurance agent. Insurance professionals, on the other hand, have to be familiar with these rules, criteria, and thresholds in all 50 states.
In determining whether a vehicle is totaled, insurance companies will calculate the total loss ratio(cost of repairs/actual cash value) and then compare this ratio to limits set either internally within the company and/or regulated and established by state law. It is also sometimes referred to simply as the damage ratio. Some states dictate how high this damage ratio needs to be in order to be able to declare a vehicle a “total loss” and be eligible for a salvage title or certificate. This is referred to as the Total Loss Threshold (TLT). In order to total a vehicle, the total loss ratio must exceed the established percentage. If the TLT is not dictated by the state, an insurance company will usually default to something known as the Total Loss Formula (TLF) which is:
Cost of Repair + Salvage Value > Actual Cash Value
If the sum of the first two quantities is greater than the ACV, the car can be declared a total loss. As an example, a damaged 2002 Toyota Echo with 185,000 miles in good condition has an ACV of approximately $2,800. Total repair costs are estimated at $2,000, for a damage ratio of 72 percent. This car would be considered a total loss in Arkansas, where the TLT is 70 percent, but not in Florida where the TLT is 80 percent. In Illinois, the TLF would be used and, if the salvage were worth $700, the car would not be totaled ($2,000 + $700 < $2,800). Of course, states utilizing the TLF rely on and defer to the judgment and opinions of licensed appraisers. Individual state laws provide the following with regard to the TLT:
Alabama75%MontanaTLF
AlaskaTLFNebraska75%
ArizonaTLFNevada65%
Arkansas70%New Hampshire75%
CaliforniaTLFNew JerseyTLF
Colorado100%New MexicoTLF
ConnecticutTLFNew York75%
DelawareTLFNorth Carolina75%
Florida80%North Dakota75%
GeorgiaTLFOhioTLF
HawaiiTLFOklahoma60%
IdahoTLFOregon80%
IllinoisTLFPennsylvaniaTLF
Indiana70%Rhode IslandTLF
Iowa50%South Carolina75%
Kansas75%South DakotaTLF
Kentucky75%Tennessee75%
Louisiana75%Texas100%
MaineTLFUtahTLF
Maryland75%VermontTLF
MassachusettsTLFVirginia75%
Michigan75%WashingtonTLF
Minnesota70%West Virginia75%
MississippiTLFWisconsin70%
Missouri80%Wyoming75%
States frequently dictate this TLT as part of legislating salvage titles. As an example, in Wisconsin, § 342.065(1)(c) reads as follows:
(c) If the interest of an owner in a vehicle that is titled in this state is not transferred upon payment of an insurance claim that, including any deductible amounts, exceeds 70% of the fair market value of the vehicle, any insurer of the vehicle shall, within 30 days of payment of the insurance claim, notify the department in writing of the claim payment and that the vehicle meets the statutory definition of a salvage vehicle, in the manner and form prescribed by the department.
Many states have exceptions to these rules for older vehicles which tend to complicate the issue. Typical policy language regarding total losses is as follows:
We will pay the cost to physically repair the auto or any of its parts up to the actual cash value of the auto or any of its parts at the time of the collision. The most we will pay will be either the actual cash value of the auto or the cost to physically repair the auto, whichever is less. We will, at our option, repair the auto, repair or replace any of its parts, or declare the auto a total loss. If, the repair of a damaged part will impair the operational safety of the auto, we will replace the part.
Understanding the procedure behind declaring a vehicle a total loss isn’t always a prerequisite for successful subrogation. But there are occasions when the third-party tortfeasor and its liability carrier or attorney will question the amount of damages you are looking to subrogate. In such instances, a working knowledge of this area of insurance becomes indispensable.
image of Gary Wickert

About Gary Wickert

Gary Wickert is an insurance trial lawyer and a partner with Matthiesen, Wickert & Lehrer, S.C., and is regarded as one of the world’s leading experts on insurance subrogation. He is the author of several subrogation books and legal treatises and is a national and international speaker and lecturer on subrogation and motivational topics. He can be reached at gwickert@mwl-law.com.

Wednesday, September 25, 2013

Fire Prevention Tips for College Students -- On- or Off-Campus

September and October are peak months for fires in college housing; NFPA urges students to be safe

In a new NFPA report, September and October were identified as peak months for fires in college housing. According to the report "Structure Fires in Dormitories, Fraternities, Sororities, and Barracks," in 2007-2011, U.S. fire departments responded to an estimated annual average of 3,810 structure fires in dormitories, fraternities, sororities, and barracks. As college students settle into housing at school or off-campus, reviewing safety tips is a valuable way for them to remember what actions can be taken to prevent fire and how they can prepare to escape if one occurs. Being sure that smoke alarms are working, and having and practicing a fire escape plan is vital.
CampussafetyRoughly 70 percent of fires in dormitories, fraternities, sororities, and barracks began in the kitchen or cooking area. The report also noted that fires are most common in the evening hours, between 5 p.m. and 11 p.m. and on weekends. With cooking the theme of this year's Fire Prevention Week, safety tips and information can be found on the FPW website as well!
NFPA offers safety tips for college students living in on- or off-campus housing:
  • Look for fully sprinklered housing when choosing a dorm or off-campus housing.
  • Make sure your dormitory or apartment has smoke alarms inside each bedroom, outside every sleeping area and on each level. For the best protection, all smoke alarms should be interconnected so that when one sounds they all sound.
  • Test all smoke alarms at least monthly.
  • Never remove batteries or disable smoke alarms.
  • Learn your building’s evacuation plan and practice all drills as if they were the real thing.
  • If you live off campus, have a fire escape plan with two ways out of every room.
  • When the smoke alarm or fire alarm sounds, get out of the building quickly and stay out.
  • Cook only where it is permitted.
  • Stay in the kitchen when cooking.
  • Cook only when you are alert, not sleepy or drowsy from medicine or alcohol.
  • Check your school’s rules before using electrical appliances in your room.
  • Use a surge protector for your computer and plug the protector directly into an outlet.
Visit www.nfpa.org/campussafety for more information and resources, including a free downloadable Fire Safety Checklist developed especially for college students.

Source:  NFPA Today

Monday, August 19, 2013

Back to School Can Be Exciting in the Wrong Way

Source:  FEMA

Campus Fire Safety: Safety Tips for Students and Parents

Each year college and university students, on- and off-campus, experience hundreds of fire-related emergencies nationwide. There are several specific causes for fires on college campuses, including cooking, intentionally set fires, overloaded power strips and open flame. Overall, most college-related fires are due to a general lack of knowledge about fire safety and prevention.
For most students, the last fire safety training they received was in grade school, but with new independence comes new responsibilities. It is important that both off-campus and on-campus students understand fire risks and know the preventative measures that could save their lives.
Campus-Related Fire Fatalities from January 2000 to June 2013

83 fatal fires have been documented that occurred on a college campus, in Greek housing or in off-campus housing within 3-miles of the campus – claiming a total of 120 victims.

·      70 fires have occurred in off-campus housing claiming 101 victims
·      7 fires have occurred in on-campus building or residence halls claiming 9 victims
·      6 fires have occurred in Greek housing claiming 10 victims

Of the 83 fires documented:

·      14 were intentionally set claiming 22 victims
·      36 were accidental – includes cooking, candles, smoking or electrical claiming 50 victims
·      33 of the fires the cause was never determined – or the cause was not available at press time. These fires claimed 49 victims.

Source: The Center for Campus Fire Safety




Safety Tips for Students

Candles

  • Make sure candles are in sturdy holders and put out after each use.
  • Never leave a burning candle unattended.
  • Keep candles away from draperies and linens.
  • Use flameless candles which are both safe and attractive.
  • Learn About Candle Safety »

Cooking

  • Cook only where it is permitted.
  • Keep your cooking area clean and uncluttered.
  • Never leave cooking unattended.
  • If a fire starts in a microwave, keep the door closed and unplug the unit.
  • Learn About Cooking Fire Safety »

Smoking

  • Make sure cigarettes and ashes are out. Never toss hot cigarette butts or ashes in the trash can.
  • Use deep, wide ashtrays. Place ashtrays on something sturdy and hard to ignite.
  • After a party, check for cigarette butts, especially under cushions. Chairs and sofas catch on fire fast and burn fast.
  • It is risky to smoke when you have been drinking or are drowsy.
  • Learn About Smoking Safety »

Escape Planning

  • Get low and go under the smoke to escape to your safe exit.
  • Feel the door. If it's hot, use your second way out.
  • Use the stairs; never use an elevator during a fire.
  • Practice your escape plan. Always have two ways out.
  • Learn About Escape Planning »

Off-Campus Fire Safety

Good Questions to Ask Before Moving in or Signing a Lease

1.        Are working smoke alarms installed? (Preferably in each bedroom, interconnected to sound all if any one detects smoke)
2.        Are there at least two ways to exit your bedroom and your building?
3.        Do the upper floors of the building have at least two interior stairs, or a fire escape?
4.        Is a sprinkler system installed and maintained?
5.        Are the existing electrical outlets adequate for all of the appliances, computers, printers and electronics that you are bringing – without the need for extension cords?
6.        Are there EXIT signs in the building hallways to indicate accessible escape routes?
7.        Does the building have a fire alarm system installed and maintained?
8.        Has the buildings heating system been inspected recently (in the last year)?
9.        Is the building address clearly posted to allow emergency services to find you quickly in the event of an emergency?
10.     Does the sprinkler system or fire alarm system send a signal to the local fire department and/or campus security?
According to the U.S. Department of Education, there are approximately 18,000,000 students enrolled in 4,100 colleges and universities across the country. Since the 2000 academic year, 86% of the campus-related fire fatalities have occurred in off-campus housing where approximately two-thirds of students live.
There are five common factors in a number of these fires:
  • Lack of automatic fire sprinklers
  • Missing or disabled smoke alarms
  • Careless disposal of smoking materials
  • Impaired judgment from alcohol consumption
  • Upholstered furniture fires on decks and porches
Source: Campus-Firewatch

On-Campus Fire Safety

In cases where fire fatalities have occurred on college campuses, alcohol was a factor. There is a strong link between alcohol and fire deaths. Alcohol abuse often impairs judgment and hampers evacuation efforts.
Many other factors contribute to the problem of dormitory housing fires including:
  • Improper use of 911 notification systems delays emergency response.
  • Student apathy is prevalent. Many are unaware that fire is a risk or threat in the environment.
  • Evacuation efforts are hindered since fire alarms are often ignored.
  • Building evacuations are delayed due to lack of preparation and preplanning.
  • Vandalized and improperly maintained smoke alarms and fire alarm systems inhibit early detection of fires.
  • Misuse of cooking appliances, overloaded electrical circuits, and extension cords increase the risk of fires.

Safety Precautions for Colleges and Universities

  • Provide students with a program for fire safety and prevention.
  • Teach students how to properly notify the fire department using the 911 system.
  • Install smoke alarms and an automatic fire sprinkler system in every dormitory room and every level of housing facilities.
  • Maintain and regularly test smoke alarms and fire alarm systems. Replace smoke alarm batteries every semester.
  • Regularly inspect rooms and buildings for fire hazards. Ask your local fire department for assistance.
  • Inspect exit doors and windows and make sure they are working properly.
  • Create and update detailed floor plans of buildings, and make them available to emergency personnel, resident advisors and students.
  • Conduct fire drills and practice escape routes and evacuation plans. Urge students to take each alarm seriously.
  • Make sure electrical outlets and power strips are not overloaded and extension cords are used properly.
  • Learn to properly use and maintain heating and cooking appliances.



Related Publications

Links of Interest

Monday, April 8, 2013

This uncharacteristic cool spring that we have experienced to date has most of us chomping at the bit to get outside and do something.  Motorcycle enthusiasts are no exception to that rule and judging by the number seen and heard this past weekend, they'll soon be coming out of the woodwork.  With that in mind, here are a few tips, courtesy of the US Dept of Transportation, to make sure those rides are safe as well as enjoyable.

Source: US Department of Transportation

Safety Tips for Motorcycles


Among all motor vehicles, motorcycles are the most vulnerable on the road. Because motorcycles do not have seat belts, you can be thrown off your seat in a crash, which can result in serious injury or even death. Imagine your chance for survival if a truck strikes you, or if you strike it. Hitting a truck is like hitting a steel wall. However, your chance for survival will be increased if you wear a helmet and follow the safety tips below when riding your motorcycle.

WATCH THE NO-ZONES

Never hang out in a truck's blind spot or "No-Zone." Trucks have large No-Zones on both sides, the front and behind the truck. Truck drivers cannot see you when you ride in these blind spots, which allows for a greater chance of a crash. The front blind spot is particularly dangerous if you need to stop quickly. Because of their lightweight and braking system, motorcycles can stop much faster than trucks. A truck may not be able to stop as quickly as you do, so you need to take special precautions to avoid crashes before they happen.

ALWAYS WEAR A HELMET

Make sure to always wear a helmet. Beware of helmets that do not meet U.S. Department of Transportation (DOT) standards. Check for the DOT label inside your helmet. Helmets are the most important piece of equipment you can wear when riding your motorcycle. A helmet could be your only source of protection in a serious crash.

DRIVE TO SURVIVE

Motorcycles are the smallest vehicles on the road. Unfortunately they provide virtually no protection in a crash. Other drivers may not see you on your motorcycle, so you must be aware of everything on the road. Be extra cautious, paying attention to the signals and brake lights of other vehicles, especially trucks. However, you still need to be prepared in the event their signals or lights don't work. Ride with caution and drive defensively. Even though your motorcycle may be small, you must adhere to the laws of the road. Never ride in between lanes in traffic or share a lane with another vehicle. Don't instigate aggressive driving with other motorists; you will only increase your chance of a crash.

CHECK YOURSELF AND YOUR BIKE

Conduct a safety inspection of your motorcycle before each ride, and wear protective clothing including gloves, boots and a jacket. Proper maintenance and protective clothing will help reduce your chance of an crash or the severity of injury if you are involved in a crash, especially with a large truck or bus.

WATCH YOUR SPEED

Of all vehicles, motorcycles accelerate the fastest, while trucks and buses are the slowest. Please watch your speed around trucks, especially in bad weather or at night. Colliding with the back of a truck will end your riding days.

To find out more information, visit our Related Links page.

Tuesday, January 29, 2013

During a Winter Storm



You can't always avoid being out in a winter storm, so if you have to be out and about, protect yourself with these handy hints from FEMA

Source: FEMA


During Winter Storms & Extreme Cold

  • Stay indoors during the storm.
  • Walk carefully on snowy, icy, walkways.
  • Avoid overexertion when shoveling snow. Overexertion can bring on a heart attack—a major cause of death in the winter. If you must shovel snow, stretch before going outside.
  • Keep dry. Change wet clothing frequently to prevent a loss of body heat. Wet clothing loses all of its insulating value and transmits heat rapidly.
  • Watch for signs of frostbite. These include loss of feeling and white or pale appearance in extremities such as fingers, toes, ear lobes, and the tip of the nose. If symptoms are detected, get medical help immediately.
  • Watch for signs of hypothermia. These include uncontrollable shivering, memory loss, disorientation, incoherence, slurred speech, drowsiness, and apparent exhaustion. If symptoms of hypothermia are detected, get the victim to a warm location, remove wet clothing, warm the center of the body first and give warm, non-alcoholic beverages if the victim is conscious. Get medical help as soon as possible.
  • Drive only if it is absolutely necessary. If you must drive: travel in the day; don't travel alone; keep others informed of your schedule; stay on main roads and avoid back road shortcuts.
  • Let someone know your destination, your route, and when you expect to arrive. If your car gets stuck along the way, help can be sent along your predetermined route.
  • If the pipes freeze, remove any insulation or layers of newspapers and wrap pipes in rags. Completely open all faucets and pour hot water over the pipes, starting where they were most exposed to the cold (or where the cold was most likely to penetrate).
  • Maintain ventilation when using kerosene heaters to avoid build-up of toxic fumes. Refuel kerosene heaters outside and keep them at least three feet from flammable objects.
  • Conserve fuel, if necessary, by keeping your residence cooler than normal. Temporarily close off heat to some rooms.
  • If you will be going away during cold weather, leave the heat on in your home, set to a temperature no lower than 55ºF.


Dress for the Weather

  • If you must go outside, wear several layers of loose-fitting, lightweight, warm clothing rather than one layer of heavy clothing. The outer garments should be tightly woven and water repellent.
  • Wear mittens, which are warmer than gloves.
  • Wear a hat. A hat will prevent loss of body heat.
  • Cover your mouth with a scarf to protect your lungs.


Stranded in a Vehicle

If a blizzard traps you in the car:

  • Pull off the highway. Turn on hazard lights and hang a distress flag from the radio antenna or window.
  • Remain in your vehicle where rescuers are most likely to find you. Do not set out on foot unless you can see a building close by where you know you can take shelter. Be careful; distances are distorted by blowing snow. A building may seem close, but be too far to walk to in deep snow.
  • Run the engine and heater about 10 minutes each hour to keep warm. When the engine is running, open a downwind window slightly for ventilation and periodically clear snow from the exhaust pipe. This will protect you from possible carbon monoxide poisoning.
  • Exercise to maintain body heat, but avoid overexertion. In extreme cold, use road maps, seat covers, and floor mats for insulation. Huddle with passengers and use your coat for a blanket.
  • Take turns sleeping. One person should be awake at all times to look for rescue crews.
  • Eat regularly and drink ample fluids to avoid dehydration, but avoid caffeine and alcohol.
  • Be careful not to waste battery power. Balance electrical energy needs - the use of lights, heat, and radio - with supply.
  • Turn on the inside light at night so work crews or rescuers can see you.
  • If stranded in a remote area, stomp large block letters in an open area spelling out HELP or SOS and line with rocks or tree limbs to attract the attention of rescue personnel who may be surveying the area by airplane.
  • Leave the car and proceed on foot - if necessary - once the blizzard passes.