Expert: Charlie Barone - 7/31/2009

Question
I lost my vehicle (2006 Toyota Rav4) in a car fire today. The fire started in either the passenger compartment or under it.  Car is a total loss.  My question is do I have to accept my insurance companies (Geico) price on the value of my car or can I dispute it?  If I dispute it do I have to get a lawyer?  Values on the car range from 12k-15k and while I have no idea what number they will come in with, the car was in excellent condition and I want to get top dollar.  Also, do I have any recourse with the manufacturer of the car (Toyota) over this fire for additional compensation?  I owe 12k on the car and walking away with 2 or 3k doesnt make up for the loss of this car.

Answer
Yes, you have recourse as do all policyholders with auto insurance. Their is what is known as the appraisal clause in your policy that provides for a binding arbitration that comes about when the amount they offer you is unacceptable. You hire an independent appraiser to assess the cost to replace your car with one of like kind and quality and your insurer also hires one. The two appraisers then select an umpire whose decision is binding on both parties.

Before you inform the insurer of your decision to enact the appraisal clause, do some shopping and get the prices of what you consider to be comparable cars to yours. If their initial offer is insufficient to replace your former vehicle with one of like kind and quality, you can refuse their offer or ask them to show you where the cars are that they base their offer on. You may be able to do better on that basis. If not, or the negotiation for settling the claim gets bogged down, enact the appraisal clause.

You should not need a lawyer for any of the above and you must exercise these options prior to getting a lawyer involved in the claim, or at least have him do the appraisal clause.

As for Toyota and their liability, your insurer may try to recover all or part of the cost of the claim with the manufacturer.