INSURANCE REGULATIONS
We have had a lot of calls about what insurance adjusters can and
cannot do when handling claims. The North Carolina Commissioner of
Insurance has written extensive regulations which tell insurance
companies how they must act. These regulations do not cover everything,
but they do put some real limits on what insurance adjusters can
get away with. The adjusters have been taught how to comply with
these regulations even if they can not cite them specifically. We
hope that providing the regulations that cover some of the areas
most frequently encountered by our clients it will put those visiting
our site at less of a disadvantage when trying to negotiate with
insurance adjusters.
Ethical Standards
We have listed below, ethical requirements of every insurance adjuster
who is attempting to settle a claim in the state of North Carolina.
This includes adjusters who are not in this state. Of particular
note to us is the language in section (b)(3) that "no adjuster
shall advise a claimant of the advisability of seeking legal counsel
nor recommend any legal counsel to any claimant under any circumstances." (emphasis
added). Adjusters take these regulations seriously if they want to
continue in their professions, so it is a good idea to be familiar
with them.
Attachment A
Handling Claims
Insurance adjusters are not supposed to deliberately trick you.
North Carolina law specifically lists things that an adjuster can
not do as a general practice, such as "attempting to settle
a claim for less than the amount to which a reasonable man would
have believed he was entitled." There are a lot of other things
that an adjuster is specifically forbade to do. The statute we
have listed below is part of N.C.G.S. sec. 58-63-15. Focus on section
(11) and its subparagraphs. We have also copied one of the Insurance
Commissioners regulations on handling claims, thinking our visitors
might be particularly interested in paragraph (1), which says that
once you have settled a claim, the insurance adjuster must send
your
check to you within ten days.
Attachment B
Written Confirmation
Once an adjuster has verbally agreed to settle with you, he has
to put the deal in writing if you want. When in doubt, get it in
writing.
Attachment C
Property Damage
The insurance commissioner has a number of regulations on how adjusters
must handle motor vehicle property damage claims. The first big determination
that needs to be made in dealing with a property damage claim is
whether or not the car is a "total loss." If the vehicle
is a total loss, the adjuster will need to reimburse the claimant
for the "market value" of the car. If the vehicle is not
a "total loss," the adjuster will need to pay for its repair.
Total Loss A vehicle is a "total loss" when repairing
it would cost 75% of what the vehicle was worth before the accident.
The regulations define this very clearly, so a careful reading is
worth the trouble. The adjuster has to investigate what the vehicle
was worth before it was in the accident. Then, the adjuster has to
find out what it would cost to fix the vehicle. If fixing it would
cost 75% or more of what the vehicle was worth before the accident
(market value), the vehicle is a "total loss." If it would
cost less than 75% of the market value to fix the vehicle, it gets
repaired.
It seems simple enough, but people often owe more for their cars
than the cars are worth on the market. If the car is a "total
loss," the insurance company owes the car's market value, not
what the owner owes the bank. To put it another way, the insurance
company owes what it would cost to get a similar or equivalent vehicle
to the one that was wrecked. This is also often referred to as the
car's "retail value." The regulations say that the adjuster
has to base his ultimate settlement offer on both the regional average
value (such as the National Automobile Dealers Association or N.A.D.A.
value) and the local market value (what it would cost to buy the
car in your area). The adjuster gets the local market value from
local dealerships, newspaper ads, and the like.
The insurance company also needs to pay tax and tag for the new
car, since the old car is totaled. The amount the company pays for
the tax is determined by the market value of the old car not the
new one.
Attachment D
Repairs
Insurance companies vary in how they determine what they will pay
to repair a vehicle. Some want the owner of the vehicle to get two
estimates on the cost of the repairs. Others send an appraiser out
to look at the vehicle, and they go by his estimate. Some insurance
companies have "drive-in" service, where they want you
to bring the car to their office. You do not have to take your car
through an insurance company's drive-in. See T11-C4.0417 below. Problems
with repair costs are frequent. Insurance companies decide what it
ought to cost to fix your vehicle. If you can not get it done for
their price, adjusters still often refuse to pay more on the assumption
that the repairing shop is just charging too much. Some of the problem,
for instance, may be the cost of the parts the
repairing shop is using. In North Carolina, an insurance carrier
does not have to pay for new parts from the original manufacturer
(with all due respect to General Motors). The parts have to be
of "like kind and quality," which means they have to
be just as good as the parts that were on the car before it was
wrecked.
The regulations we have copied go into some detail as to the duties
of insurance companies and their adjusters with respect to handling
claims for motor vehicle repairs. They can be somewhat convoluted
at times, but they are pretty easy to read and self-explanatory for
the most part.
Attachment E
For a list of all NC regulations go here...
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