DESK REFERENCE GUIDE

Transcription

1 This guide is intended to provide information to assist the adjuster in explaining a valuation and answering related questions that might be asked. The adjuster should use his/her own judgment in assessing the valuation, responding to questions and processing new or changed information about the loss vehicle. This guide is not intended to replace your company's internal operating procedures applicable to claim settlement Review all regulations provided by your Internal Operating Procedures (IOP) group to ensure regulatory compliance. This guide is meant to provide additional guidance. Table of Contents DESK REFERENCE GUIDE CHECKLIST PRIOR TO CONTACTING THE VEHICLE OWNER... 2 MILEAGE... 3 WHAT IS THE VEHICLE ALLOWANCE FOR ODOMETER?... 3 IF THE LOSS VEHICLE IS REPORTED WITH UNKNOWN MILEAGE, WHAT MILEAGE DOES CCC USE TO DETERMINE THE VALUE?... 3 HOW MANY CENTS PER MILE ARE YOU ADJUSTING FOR MY LOSS VEHICLE?... 3 CCC VERSUS GUIDEBOOKS... 4 WHAT IS THE VALUE OF DIVIDING UP THE UNITED STATES INTO OVER 350 GEOGRAPHIC ZONES?... 4 VEHICLE CONDITION... 5 HOW ARE CONDITION ADJUSTMENTS DETERMINED?... 5 HOW ARE CONDITION ADJUSTMENT AMOUNTS CALCULATED?... 5 REFURBISHMENTS... 6 HOW DOES CCC KNOW HOW MUCH TO ADD FOR REFURBISHMENTS?... 6 I INVESTED ALL THIS MONEY IN MY VEHICLE, AND NOW YOU RE TELLING ME IT DOES NOT INCREASE THE MARKET VALUE. WHY IS THAT?... 6 I PAID $500 FOR THE WORK THAT WAS DONE ON MY ENGINE. WHY ARE YOU ONLY ADDING $100 TO THE VALUE FOR THIS REFURBISHMENT?... 6 I HAD MY CAR REPAINTED AFTER A MINOR FENDER BENDER LAST YEAR. WHY IS AN ADJUSTMENT NOT BEING CONSIDERED AS A REFURBISHMENT?.. 6 I PAID $450 FOR FOUR NEW TIRES SIX MONTHS AGO. WHY ARE YOU ONLY ADDING $75 TO THE VALUE FOR THIS REFURBISHMENT?... 6 LOCAL MARKET COMPARABLE VALUES... 7 HOW ARE LOCAL MARKET COMPARABLE VEHICLES CHOSEN?... 7 WHY ARE THERE ONLY TWO COMPARABLES FOR MY 1992 HONDA ACCORD?... 7 WHAT ARE ADDITIONAL LOCAL MARKET COMPARABLE VEHICLES?... 7 I CALLED THE DEALERSHIP AND THE MANAGER SAID THE VEHICLE ON THE MARKET VALUATION REPORT HAS BEEN SOLD, AND THEREFORE, I CANNOT PURCHASE IT WHY HAVE YOU INCLUDED VEHICLE(S) THAT ARE ONE YEAR NEWER THAN MY VEHICLE?... 7 WHY HAVE YOU INCLUDED VEHICLE(S) THAT DO NOT HAVE THE SAME TRIM LEVEL AS MY VEHICLE?... 7 VALUATION METHODOLOGY... 8 HOW DO I EXPLAIN THE VALUATION METHODOLOGY SECTION TO MY INSURED?... 8 BASELINE ADJUSTMENT... 9 WHAT IS A BASELINE ADJUSTMENT?... 9 (C) Copyright 2010 CCC Information Services Inc. All Rights Reserved. 1

2 CHECKLIST PRIOR TO CONTACTING THE VEHICLE OWNER Review estimate and pictures Validate vehicle and location match on estimate and valuation Review valuation response and compare to loss vehicle information o Options (review photos to ensure visible options have been captured and accounted for, review any special options (rear spoiler, custom rims) to make sure you are aware of them) o Mileage (particularly note if there is excessively high or low mileage and how that has impacted the value of the vehicle) o Condition (review the condition of the vehicle and pay particular attention to any specific conditioning notes that the appraiser may have included on the file) o Comparable vehicles o Prior damage (if applicable) (C) Copyright 2010 CCC Information Services Inc. All Rights Reserved. 2

3 MILEAGE What is the Vehicle Allowance for Odometer? The odometer allowance in the Valuation Summary illustrates the monetary impact of the loss vehicle s reported odometer mileage as compared to average mileage for that type of vehicle in that region. The Mileage adjustment In the Local Market Comparable Vehicles section of the MVR reflects the monetary impact of the difference in mileage between the loss vehicle and each specific comparable vehicle. If the loss vehicle is reported with unknown mileage, what mileage does CCC use to determine the value? If the vehicle is reported with unknown mileage, CCC uses average miles for that same region, age and type of vehicle. On the Market Valuation Report, average mileage is listed in the right hand side of the Valuation Summary section in the blue box. How many cents per mile are you adjusting for my loss vehicle? The mileage adjustment is how much more or less valuable the loss vehicle is worth as compared to each comparable vehicle with different mileage. The mileage adjustment: Is not a constant cents per mile adjustment. Uses a variable cents per mile, depending upon the difference in mileage (C) Copyright 2010 CCC Information Services Inc. All Rights Reserved. 3

4 CCC VERSUS GUIDEBOOKS CCC Red Book NADA KBB Zones ~ for newer vehicles; Vehicle Type Categories CCC identifies a vehicle down to the year, make, model/series, body style, door configuration, and engine. Cars SUV s Vans Light Trucks 1 for older vehicles Passenger Cars Trucks 5 for newer vehicles; 1 for older vehicles Cars Trucks Vans Mileage Adjustments Information Updated Mile increments Comparables added every business day Bracketed ranging from 5,000 to 15,000 miles. Capped at 135,000. Bracketed with a range of 5,000 miles. Capped at 150, Months Newer vehicles updated monthly, Older vehicles updated every 4 months Bracketed ranging from 1,000 to 5,000 miles. Caps for mileage ranges from 60,000 to 200,000 depending on year. Newer vehicles updated monthly; Older vehicles every 4 months *Bracketed examples: 1. Guidebook mileage adjustments are broken into brackets, so a loss vehicle with 20,000 miles as compared to one with 20,001 miles could differ by $ A guide book could value a 1996 vehicle with 130,000 miles the same as one with 250,000 miles or more (This example would have a 120,000 mile difference) What is the value of dividing up the United States into over 350 geographic zones? Since vehicle values vary based upon geographic factors, CCC is able to provide a value that is more reflective of the value of vehicles in the specific area of the loss vehicle. (C) Copyright 2010 CCC Information Services Inc. All Rights Reserved. 4

5 VEHICLE CONDITION How are Condition Adjustments determined? CCC conducts extensive market research to determine how the condition of the following key components impacts the market value of a vehicle. These include: Body Engine Interior Paint Tires Transmission The market research indicates that condition affects a vehicle s value differently based on: Vehicle Age Vehicle type Geographic location of the vehicle. How are Condition Adjustment amounts calculated? Condition adjustments are derived from surveys of used car dealers regarding the market value impact of differences in condition levels. (C) Copyright 2010 CCC Information Services Inc. All Rights Reserved. 5

6 REFURBISHMENTS How does CCC know how much to add for Refurbishments? CCC s adjustments for refurbishments are derived from market research, including surveys of used car dealerships. CCC considers the following factors when determining the adjustment amount: Year, make and model Base value of vehicle Purchase price for refurbishment Type of refurbishment (rebuilt engine, rebuilt transmission, new paint job, reconditioned interior, lift kit, carpet kit) Usage (wear, mileage, age of refurbished item) Condition rating of the specific area the refurbishment covers I invested all this money in my vehicle, and now you re telling me it does not increase the market value. Why is that? The adjustment is based on the current vehicle value. Remember, when an insured refurbishes a 1997 vehicle during 2010, their vehicle is still a A component of the vehicle has been improved in 2010, but the market value for that vehicle is still based on a 1997 vehicle and may not be impacted by the refurbishment. I paid $500 for the work that was done on my engine. Why are you only adding $100 to the value for this refurbishment? On a $500 refurbished engine where $100 was added to the vehicle value, the recommended adjustment means the loss vehicle is now worth $100 more than a comparable vehicle without the refurbishment. I had my car repainted after a minor fender bender last year. Why is an adjustment not being considered as a refurbishment? Typically, when a vehicle is repainted due to a prior accident, the paint job only includes the damaged area and possibly the surrounding panels. It does not typically include the whole vehicle, nor does it increase the value of the vehicle. Thus, this is not considered a refurbishment. I paid $450 for four new tires six months ago. Why are you only adding $75 to the value for this refurbishment? CCC makes dollar adjustments that reflect the impact these items have on the market value of the vehicle, not the replacement value of these items. The $75 represents the impact on the overall vehicle value, including any depreciation for usage since purchase. (C) Copyright 2010 CCC Information Services Inc. All Rights Reserved. 6

7 LOCAL MARKET COMPARABLE VALUES How are Local Market Comparable Vehicles chosen? The first step is to identify the geographical market using the ZIP code of the vehicle owner s garage location. The next step is to select vehicles that are similar to the loss vehicle. Why are there only two comparables for my 1992 Honda Accord? Depending on the year, make, model and location of the vehicle, the number of comparable vehicles within the geographical market may be limited. What are Additional Local Market Comparable Vehicles? Additional Local Market Comparable Vehicles are comparable vehicles that also were used in the valuation of the loss vehicle, but they are displayed in summarized format solely to limit the length of the report. The complete configuration of each comparable vehicle is compared to the loss vehicle to determine the adjusted value. I called the dealership and the manager said the vehicle on the Market Valuation Report has been sold, and therefore, I cannot purchase it. The purpose of the Market Valuation Report is to provide a market value for the loss vehicle. A Market Valuation Report is not intended to serve as a vehicle replacement service. The market value is based upon vehicles available for sale or recently available for sale, and the vehicle at issue was used for that purpose. Why have you included vehicle(s) that are one year newer than my vehicle? CCC might use year newer vehicles in the valuation process, but only if there was no body style change. These vehicles are considered comparable vehicles for valuation purposes. CCC wil make a monetary adjustment to reflect that the loss vehicle is a year older than this particular comparable vehicle. Why have you included vehicle(s) that do not have the same trim level as my vehicle? CCC may use other trim levels of the same model. These vehicles are considered comparable vehicles for valuation purposes. CCC will make a monetary adjustment to reflect that the loss vehicle has a different trim level than this particular comparable vehicle. (C) Copyright 2010 CCC Information Services Inc. All Rights Reserved. 7

8 VALUATION METHODOLOGY How do I explain the Valuation Methodology section to my insured? CCC has four steps in the valuation process: 1. Identify the loss vehicle. This includes decoding the VIN to identify the year, make, model/trim, body style and engine of the vehicle. 2. Configure the loss vehicle. Vehicle configuration includes mileage, options, packages, condition and additional considerations. 3. Locate and Adjust Comparable Vehicles. The loss vehicle s ZIP code is used to identify the geographical market area for the loss vehicle. The prices of the comparable vehicles are adjusted to account for differences in mileage, options, model/trim, year and condition, etc. 4. Calculate the loss vehicle value. CCC calculates the loss vehicle s market value using the adjusted values of the comparable vehicles. In most states, the calculation is a weighted average, based upon the following factors: Similarity of model, equipment and odometer Nearness to the loss vehicle s primary garage location Recency of information Precision of data (inspected versus advertised). Numerous quality checks are present in the process. If any of these quality checks are not passed, the valuation process stops and the valuation is routed to a valuator responsible for that market area for manual processing. (C) Copyright 2010 CCC Information Services Inc. All Rights Reserved. 8

9 BASELINE ADJUSTMENT What is a Baseline Adjustment? Generally, the baseline is defined as the condition level for a typical vehicle on the road. Baseline adjustments are made when a comparable vehicle s condition varies from that condition level. To the extent that the loss vehicles condition varies from the baseline condition level, that difference is reflected in the Vehicle Condition/Refurbishments section of the MVR. (C) Copyright 2010 CCC Information Services Inc. All Rights Reserved. 9