Expert: Charlie Barone - 1/26/2010

Question
have state farm insurance in Pa, had accident which requires engine replacement, insurnce company will only pay for junk yard engine which voids my new car vehicle warranty, anything I can do
Thanks

Answer
Is State Farm your company? If not, then you can threaten them with a diminished value claim on the basis that their prescription of a used engine with an unknown source or history will void your drivetrain warranty. Furthermore, that is not pre-accident condition, the standard to which they must strive to meet.

If it is your company, there is a regulation in PA that prohibits them from settling claims on the basis of actions that will not restore you car to its pre-loss condition.

Subchapter A. UNFAIR CLAIMS SETTLEMENT PRACTICES , 146.8.    Standards for prompt, fair and equitable settlements applicable to automobile insurance, paragraph (f) When the insurer elects to repair in a first-party claim, the insurer shall cause the damaged automobile to be restored to its condition prior to the loss at no additional cost to the claimant other than as stated in the policy and within a reasonable period of time.

I would tell them (in writing) that their actions have failed to restore your car to its conditon prior to the loss. A salvage engine clearly does not do this, as a motor and its warranty are the heart of the car and central to its value.

Charlie 610 524 1234