Expert: Richard Hixenbaugh - 10/27/2010

Question
Mr. Hixenbaugh,

I'm currently involved in an arbitration and diminished value claim.  The arbitration is scheduled for December.  The other driver's insurance company is offering to pay 12K of the 15K repair bill.  My insurance company, believing the other driver was 100% at fault, wants to collect the entire bill.  The other driver's insurance has already reimbursed me for my deductible and paid for my rental car.  My vehicle has been repaired and has been inspected by an independent adjuster to determine a diminished value. settlement.  

Today I received the diminished value offer of $4500.  They want me to sign a document titled Property Damage Release.  This document states me and my people release their client and his people from any and all property damage claims.  Nowhere in this legal jargon does it say the words diminished value.  

My insurance company does not want me to sign or collect the diminished value until after arbitration as they feel it could have an adverse affect on the outcome.  Their insurance company is telling me this cannot affect the arbitration.  

Due to personal circumstances I could really use the money immediately.  Who's correct?  Why doesn't the document say the words diminished value?  Do you recommend I collect my check or wait until after the arbitration?

Thank you for your time.

Jason

Answer
Hi Jason,

You insurance company is correct. If you sign the release form, it will release them from any and all property damage claims, which includes the cost of repairs. Further, if you sign the release and jeopardize your insurance company's ability to get reimbursed, they could come after you to reimburse them the entire cost of the repairs.

You can either wait until the arbitration is settled or you can contact the at-fault party's insurance company and tell them to rewrite the release form so that it ONLY references that the payment is for diminished value only and specifically has no affect on any other property damage related claims. If they are willing to do that you should be ok and your insurance company should not have a problem with you signing it.

On a side note, I don't understand why if the insurance company was willing to pay 100% of your rental and 100% of your diminished value and 100% of your deductible, why thay are giving your insurance company a hard time over the repair cost. But then, insurance companies often do things that boggle the mind.

I hope this helps
Richard Hixenbaugh