Geico Auto Insurance Diminished Value Claim Houston Nationwide

You bought insurance with Nationwide. And you probably had collision with Nationwide-so you should have gone throught Nationwide and let them battle it out with Geico. That is what insurance is for.

I read this compaint and the subsequent comment with interest as I am preparing to litigate against Geico in an automobile diminished value case. My client also sent a letter from his dealer to Geico that showed a loss of value. He also received the form letter that was in the response submitted by The St. Lucie Appraisal Company.

What Geico is doing with these letters is a classic example of cutting off their noses to spite their faces. The reason, and a primary factor in my advising my client to obtain a diminished value report from a licensed appraiser, is that letters from dealers are hardly irrefutable evidence of diminished value as they are prepared by sales managers who wish to obtain the cars for as little as possible. Any judge would look at this evidence warily. Geico is, in essence, forcing claimant's to obtaing reports that WILL, in fact, stand up in court!

Our company prepares diminished value appraisals in all 50 states. We rely exclusively upon unbiased opinions from sales managers at dealerships as to how much of a loss in value vehicles have suffered after accident repairs. Obtaining six quotes is very time consuming also rewarding as the dialog is always educational. Sometimes it can border on the absurd though.

A letter from the claimant’s dealership declaring that the vehicle has lost value as a result of undergoing collision repairs. A typical insurance company response: “A dealership is not a disinterested third party and has a financial interest in the acquisition price of a trade in vehicle. Their business model is to buy low and sell high. An offer of trade is simply the starting point of a negotiation and does not, in and of itself, establish any specific loss in value. It is our position that the documentation presented by you does not provide any underlying market data in support of the post-accident value of your vehicle.” One may concede that the use of a trade-in quote from the claimant’s dealer presents a valid argument that this is not an acceptable method.

GEICO, however, has gone a few steps further to discourage dealers from providing their customers with diminished value letters. The following letter is GEICO's and it goes to any dealer that provides such a letter.

Dear Dealership General Manager/Owner,

It has been brought to our attention that you or one of your representatives determined Mr. Smith's 2010 Ford Mustang lost value due to a collision repair.

We would appreciate if you take a few minutes of your time to answer the questions below so that we may better understand your position.

1. Has your Dealership sold any new vehicles that were damaged in transportation, test drive or any other time prior to sale?
2. Was the damage repaired?
3. How do you handle disclosure of repaired damage to new vehicles that are for sale? 
4. How do you calculate any discount of the vehicle’s sale price due to the damage and repairs?
5. Do you ask each prospective customer if their trade-in vehicle has ever been involved in an accident?  How do you calculate the trade in value for prior repairs?
6. Do you currently have any vehicles on your lot of a similar year, make and model as the vehicle mentioned above?
7. What is your asking price for the vehicle that you accepted from Mr. Eichholz?
8. What is your take price for the vehicle?
9. In providing your opinion to Mr. Eichholz regarding the loss of value, did your technician review the detailed repair estimate or invoice?
10. Do you currently have any vehicles on your lot that have any repaired collision damage?
11. What is the asking price for those vehicles?
12. What is your take price for those vehicles?
13. In what way were you able to ascertain the specific amount of loss in value that you have stated the above vehicle in question sustained as a result of the repaired collision damage?
14. Who inspected the vehicle in question and does that person have any repair expertise?
15. Please describe your inspection procedure and what factors you are using to establish your specified loss of value calculation?
16. Do you apply this same inspection and loss of value calculation process to every customer that presents a vehicle for trade?

Thank you for your cooperation in resolving this matter.

Sincerely,

Ryan Ownbey

GEICO Auto Damage Supervisor

It would take an hour or more for a manager at a dealership to complete this questionnaire. You be the judge of whether the inquiries are necessary.

Every time we see transparent attempts by insurance companies to circumvent fairness, another protective clause appears in St. Lucie Appraisal's diminished value reports to prevent them from using unfair tactics. Our inherent diminished value reports are ultimately designed to be read and decided upon by a magistrate or mediator. In the past, our reports have proved conclusive in winning cases for our customers because they are based on real-world data.

As more and more GEICOs pile more and more garbage on top of what claimants already have to go through, letters from dealers will soon become a thing of the past.