To make your draft letter
to the automobile insurance company
more consistent
with the laws of California,
vet and edit your draft letter
against the laws of California
that I copied and pasted below.

In the “What I would do today” module
of wasyourcartotaledorstolen.com,
I told you that,
if I had not yet agreed
to a valuation amount
for my total-loss vehicle,
then I would write a letter
to the automobile insurance company.

In that letter:

I would find fault
with the valuation methodology
that the automobile insurance company’s
valuation-services vendor
used to produce their valuation
of my total-loss vehicle.
If the automobile insurance company
sent me a deeply flawed
market valuation report
like the CCC market valuation report
that Travelers sent to me
or like the CCC market valuation report
that Maria’s insurance company
sent to her, then I might argue
that the valuation services vendor
had motive, means, and opportunity
to generate an unfair, inaccurate,
low valuation for my total-loss vehicle.
I would reject
the automobile insurance company’s
valuation offer.
I would propose
that the automobile insurance company
value my total-loss vehicle
at my total-loss vehicle’s
J.D. Power Buy from Dealer price.
I would argue
that the J.D. Power Buy from Dealer price
for my total-loss vehicle
is a fair and unbiased calculation
of my total-loss vehicle’s
actual cash value.

Some parts of my letter would be different
depending on whether my total-loss claim
was a first-party claim or a third-party claim.

Then, in the “Let’s get to work” module,
I offered you
polite and muscular model letters
in docx format that,
if you wish to do so,
you can use as the starting point
for your letter
to the automobile insurance company
if you have not yet settled
your total-loss claim.

I suggested that you edit your draft letter
to make your letter consistent
with your total-loss vehicle’s
J.D. Power valuation,
make your letter consistent
with the CCC market valuation report
or other market valuation report
that you received
from the automobile insurance company,
and, if your total-loss claim
is a first-party claim,
make your letter consistent
with what your automobile insurance policy says.

Now I take you through another way
in which you may wish
to edit your draft letter.

The laws that regulate
how automobile insurance companies
are required to value total-loss vehicles
and settle total-loss claims
are different in different states.

Hence, if you are using
my model letters
as the starting point for your letter
to the automobile insurance company,
then you or the attorney with whom you meet
will need to vet your draft letter
against the laws of your state.

You or the attorney
will need to edit your draft letter
to make it fully consistent
with the laws of your state.

To make it possible for you
to vet and edit your draft letter
against the laws of your state,
I have copied and pasted below
what I believe to be
the most relevant and useful provisions
of the laws of California
that regulate
how automobile insurance companies
that do business in California
are required to value total-loss vehicles
and settle total-loss claims.

If you read through the excerpts
of the laws below,
you may be able to make
some of the required changes,
modifications, and deletions
to your draft letter yourself.

Where you are not sure what changes,
modifications, or deletions to make
to your draft letter,
you may want to leave them
for the attorney to make
when you meet with her or him.

If you have not done so already
(and you wish to do so),
download one of my starter documents.

If your total-loss claim is a first-party claim, download
Marlow_First_party_Not_yet_settled_letter.docx.

If your total-loss claim is a third-party claim, download
Marlow_Third_party_Not_yet_settled_letter.docx.

If you have not done so already,
in your word-processing software,
use “Find and replace” ➞ “Replace all”
to replace the specifics
of my fictitious total-loss claim
with the specifics
of your total-loss claim.

Print the draft document.

Your draft docucment
will be easier to work with
if you print it on only one side
of the paper.

Follow the instructions
that I embedded in the draft document.

Depending on whether your total-loss claim
is a first-party claim
or a third-party claim
and depending on whether you choose
to work with my polite model letter,
to work with my muscular model letter,
or to blend the two model letters;
you need to know or need to find
or need to ask an attorney
the answers to one
of the following sets of questions:

Questions for a first-party claim.

Questions for a third-party claim.

vet_your_draft_letter_against_your_state_s_lawsChapter

If your total-loss claim
is a first-party claim,
then, to adapt
my first-party model letters
to the laws of your state,
you need to know or need to find
or need to ask an attorney
the answers to these sets of questions.

In my polite model letter
and in my muscular model letter,
I suggest that you add, leave in,
or take out certain sentences
depending on what your state’s laws
say about a particular aspect of the law.

To decide what to do
if you are using either of my model letters
as the starting point for your letter,
here are the questions
that you need to know or need to find
or need to ask an attorney
the answers to.

FIRST-PARTY total-loss claim.

I’ve included these questions
in the docx model letters
just before each letter.

In your printout of the docx document,
underneath each question,
you will find Yes ( ) No ( ) check offs.

FIRST-PARTY total-loss claim.

When, in a section of the law,
you find the answer to a question,
you may wish to download a PDF
of that section of the law.

To do so,
at the end of that section of the law,
click “Verify statute or Download PDF.”

You may wish to print those PDFs.

On each printout,
next to the paragraph of the law
that answers a question,
you may wish to write down
the question that the paragraph answers.

(Do not write down
just the question number because,
when you edit your starter document,
the question numbers will adjust
to your changes.)

If you follow this procedure,
then those marked-up PDF printouts
may facilitate your conversation
with the attorney with whom you meet.

FIRST-PARTY total-loss claim.

questions_of_law_for_first_party_total_loss_claimsChapter

To adapt
my polite first‑party model letter
to the laws of your state,
you need to know or need to find
or need to ask an attorney
the answer to this question.

If your state’s laws mention N.A.D.A. Guides
as an approved source
of valuations of total-loss vehicles,
then, most likely,
your state’s commissioner of insurance
has approved J.D. Power
as an authorized source of valuations
for total-loss vehicles.

In 2015, J.D. Power acquired
NADA’s Used Car Guide
and www.nadaguides.com.

The company has rebranded
NADA Guides as J.D. Power
and rebranded www.nadaguides.com
as www.jdpower.com.

Whether your state’s laws
mention N.A.D.A. Guides or not,
to be sure of the correct answer
to this question,
ask the attorney with whom you meet.

Does your state’s
commissioner of insurance
approve J.D. Power
as an authorized source
of valuations for total-loss vehicles?

FIRST-PARTY total-loss claim.

questions_of_law_for_first_party_polite_letterSubchapter

To adapt
my muscular first‑party model letter
to the laws of your state,
you need to know or need to find
or need to ask an attorney
the answers to these questions.

In many states, state law says that,
for a comp vehicle to qualify
as substantailly similar
to a total-loss vehicle,
the comp vehicle must be
the same make, same model,
same model year, same trim level,
same major options,
and have similar mileage.

In some states, state law goes on
to limit the mileage difference
between a comp vehicle
and a total-loss vehicle.

For example, the New Jersey
administrative code that governs
automobile physical damage claims
says:

“ ‘Substantially similar vehicle’ means
a vehicle of the same make, model, year
and condition, including all major options
of the insured vehicle. Mileage
must not exceed that of the insured vehicle
by more than 4,000 miles.”

Do your state’s laws say that,
for a comp vehicle to qualify
as substantially similar or comparable
to a total-loss vehicle,
the comp vehicle’s mileage
must be similar
to the total-loss vehicle’s mileage?
Do your state’s laws go on
to limit the mileage differences
between total-loss vehicles
and substantially similar
or comparable vehicles?

FIRST-PARTY total-loss claim.

In most states,
courts have decided that the state’s
automobile insurance regulations
take away
a first-party claimant’s right to sue
his or her automobile insurance company
for punitive damages
(also called exemplary damages)
if his or her automobile insurance company
not only acts in breach of contract
but also engages
in reprehensible bad-faith misconduct.

These court decisions typically argue
that only the state’s
commissioner of insurance
can fine or otherwise punish
an automobile insurance company
for engaging
in unfair claim settlement practices
and in reprehensible misconduct.

In a few states, however,
the laws that regulate
how automobile insurance companies
that do business in the state
are required to value total-loss vehicles
and settle total-loss claims
explicitly give total-loss claimants
the right to sue
his or her automobile insurance company
for punitive or exemplary damages
if his or her automobile insurance company
not only acts in breach of contract
but also engages
in reprehensible bad-faith misconduct.

Do court decisions in your state
take away your right to sue
your automobile insurance company
for punitive or exemplary damages
if your automobile insurance company
not only acts in breach of contract
but also engages
in reprehensible bad-faith misconduct?

Most likely, you will need
to pose this question
to the attorney with whom you meet
because the answer to this questions
depends on court decisions.

Or do the regulatory laws of your state
explicitly give you the right to sue
your automobile insurance company
for punitive or exemplary damages
if your automobile insurance company
not only acts in breach of contract
but also engages
in reprehensible bad-faith misconduct?

You may be able to find
the answer to this question
in your state’s laws below.

FIRST-PARTY total-loss claim.

In many states, court decisions say
that an automobile insurance company
is not responsible for the validity
of valuation opinions
that it buys
from other corporations.

The regulatory laws of a few states
say that an automobile insurance company
is responsible
for the validity of valuations
that it uses
to value claimants’ total-loss vehicles.

Do the regulatory laws of your state
hold your automobile insurance company
responsible for the validity
of its valuation of your total loss vehicle?

FIRST-PARTY total-loss claim.

(The discussion and question that follow
are the same as for question 1. above
for the polite model letter.)

In 2015, J.D. Power acquired
NADA’s Used Car Guide
and www.nadaguides.com.

The company has rebranded
NADA Guides as J.D. Power
and rebranded www.nadaguides.com
as www.jdpower.com.

Whether your state’s laws
mention N.A.D.A. Guides or not,
to be sure of the correct answer
to this question,
ask the attorney with whom you meet.

Does your state’s
commissioner of insurance
approve J.D. Power
as an authorized source
of valuations for total-loss vehicles?

FIRST-PARTY total-loss claim.

questions_of_law_for_first_party_muscular_letterSubchapter

Keep an eye out
for paragraphs of the law
that may prove useful to you
if your automobile insurance company
does not agree to the valuation amount
for your total-loss vehicle
that you propose in your letter.

While you are looking for the answers
to the previous questions
for your first-party total-loss claim,
you may wish to keep an eye out
for answers to a few questions
that are outside the scope
of your letter
to your automobile insurance company.

The answers to these questions
may prove useful to you
if your automobile insurance company
does not agree to the valuation amount
that you propose in your letter.

For each of these questions too,
you may wish
to download, print, and mark up
a PDF of the section of the law
that answers the question.

FIRST-PARTY total-loss claim.

If you dispute the valuation amount
that your automobile insurance company
proposes for your total-loss vehicle,
the laws of your state may require
your automobile insurance company
to go ahead and pay you
the amount of money
that is not in dispute.

The amount of money
that is not in dispute
includes the valuation amount
for your total-loss vehicle
that your automobile insurance company
proposed.

To require
your automobile insurance company
to go ahead and pay you
the valuation amount
that is not in dispute,
the laws of your state
may say something like this:

If an insurer and the insured
or third-party claimant are unable to agree
on the value of the automobile,
an insurer shall pay the insured
or third-party claimant
the amount of the automobile’s value
that is not in dispute
as provided in section 3,
chapter 65, Oregon Laws 2009.

An insurer is not obligated
to pay the undisputed amount
until the insured
or third-party owner of the automobile:

(a) Agrees to execute documents
sufficient to transfer ownership
of the automobile
to the insurer; and
(b) Authorizes the insurer,
at the insurer’s expense,
to move the automobile
to a disclosed location
selected by the insurer,
where the automobile
will remain available
for inspection and evaluation
for not fewer than 14 calendar days.
After the expiration of the 14-day period,
the insurer may proceed
with the salvage sale of the automobile.

If you dispute the valuation amount
that your automobile insurance company proposes for your total-loss vehicle,
do the laws of your state require
your automobile insurance company
to go ahead and pay you
the amount of money
that is not in dispute?

FIRST-PARTY total-loss claim.

In the laws below,
you may find that your state legislators
have given you a right of recourse.

If you have a right of recourse
and your automobile insurance company
refuses to value your total-loss vehicle
at its actual cash value,
then you may be able
to get additional money
from your automobile insurance company
if you exercise your right of recourse.

FIRST-PARTY total-loss claim.

If your state’s legislators
have given you a right of recourse,
they may also have given
your automobile insurance company
dubious ways to preclude or satisfy
your exercise of your right of recourse.

Your automobile insurance company
may be able to preclude your exercise
of your right of recourse if,
when they send you a settlement check,
they identify
an allegedly substantially similar vehicle
for sale at a local automobile dealership
that you allegedly can buy
for their valuation amount.

Likewise,
your automobile insurance company
may be able to satisfy your exercise
of your right of recourse if,
after you exercise your right of recourse,
they identify
an allegedly substantially similar vehicle
for sale at a local automobile dealership
that you allegedly can buy
for their valuation amount.

FIRST-PARTY total-loss claim.

If either of these possibilities come to pass,
you likely will want to inspect
your automobile insurance company’s
candidate right-of-recourse vehicle
to determine if that vehicle
is, in fact, substantially similar
to your total-loss vehicle—
same make, same model, same model year,
same major options, similar mileage,
and same or better condition.

You likely will want to verify
that your automobile insurance company’s
candidate right-of-recourse vehicle
is for sale at the automobile dealership
that your automobile insurance company
alleges at the price that
your automobile insurance company alleges.

FIRST-PARTY total-loss claim.

If the laws of your state
give you a right of recourse,
counting from the day
that your automobile insurance company
puts the initial settlement check in the mail,
you likely have only so many days
in which to exercise your right of recourse
or you lose your right of recourse.

FIRST-PARTY total-loss claim.

Do the laws of your state
give you a right of recourse?
If you have a right of recourse,
do the laws of your state allow
an automobile insurance company
to preclude your exercise
of your right of recourse if,
when they send you a settlement check,
they identify
a substantially similar vehicle
for sale at a local automobile dealership
that you can buy
for their valuation amount?
If you have a right of recourse,
do the laws of your state allow
your automobile insurance company
to satisfy your exercise
of your right of recourse if,
after you exercise your right of recourse,
they identify
a substantially similar vehicle
for sale at a local automobile dealership
that you can buy
for their valuation amount?
If you have a right of recourse,
how many days
after your automobile insurance company
sends you a settlement check
do you have to exercise
your right of recourse
before you lose it?

FIRST-PARTY total-loss claim.

In some states, the law allows
an automobile insurance company
to take away
a first-party claimant’s right of recourse
if the automobile insurance company
invokes the appraisal clause
in the claimant’s automobile insurance policy.

In your state,
do you lose your right of recourse
if your automobile insurance company
invokes the appraisal clause
in your automobile insurance policy?

FIRST-PARTY total-loss claim.

The laws of some states prohibit
an automobile insurance company
from saying that,
if you cash or deposit a settlement check,
then, thereby, you agree to the settlement.

Such a prohibition may use such language
as this:

“No insurer shall issue a check or draft
in payment of a claim that contains
any language or provision that implies
or states that acceptance of the check or draft
constitutes a final settlement or release
of any or all future obligations
arising out of the loss.”

Do the laws of your state prohibit
an automobile insurance company
from saying that, if you cash or deposit
a settlement check, then, thereby,
you agree to the settlement?

FIRST-PARTY total-loss claim.

questions_of_law_in_case_first_party_letter_failsSubchapter

The legislators of a few states
give rights to first-party claimants
that legislators of other states
take away from first-party claimants.

Are your state legislators right givers?

Or right takers?

At least one state
has a consumer-protection law that says
an automobile insurance company
cannot require a first-party total-loss claimant
to resolve a claim-settlement dispute
through private arbitration unless
the claimant’s automobile insurance policy
allows the claimant to resolve the dispute
through a small-claims lawsuit instead.

Do your state’s consumer-protection laws
give first-party total-loss claimants
the right to have a dispute resolved
through a small-claims lawsuit
in lieu of having that dispute resolved
through private arbitration?

FIRST-PARTY total-loss claim.

In a few states,
if a party to a written contract
not only breaches the terms of the contract
but also acts in bad faith,
the laws of the state
regard that act of bad faith
as a tort against the non-breaching party
to the contract.

In your state,
if your automobile insurance company
not only breaches the terms
of your automobile insurance policy
but also acts in bad faith,
does their bad-faith misconduct
give you a cause of action
against them under tort law?
If the answer
to the previous question is yes,
then is your cause of action under tort law
exempt from your automobile insurance policy’s arbitration clause?

FIRST-PARTY total-loss claim.

To skip over questions
for a third-party claim, click here.

FIRST-PARTY total-loss claim.

questions_of_first_party_consumer_protection_lawsSubchapter

If your total-loss claim
is a third-party claim,
then, to adapt
my third-party model letters
to the laws of your state,
you need to know or need to find
or need to ask an attorney
the answers to these sets of questions.

THIRD-PARTY total-loss claim.

I’ve included these questions
in the docx model letters
just before each letter.

In your printout of the docx document,
underneath each question,
you will find Yes ( ) No ( ) check offs.

THIRD-PARTY total-loss claim.

When, in a section of the law,
you find the answer to a question,
you may wish to download a PDF
of that section of the law.

To do so,
at the end of that section of the law,
click “Verify statute or Download PDF.”

You may wish to print those PDFs.

On each printout,
next to the paragraph of the law
that answers a question,
you may wish to write down
the question that the paragraph answers.

(Do not write down
just the question number because,
when you edit your starter document,
the question numbers will adjust
to your changes.)

If you follow this procedure,
then those marked-up PDF printouts
may facilitate your conversation
with the attorney with whom you meet.

THIRD-PARTY total-loss claim.

questions_of_law_for_third_party_total_loss_claimsChapter

To adapt
my polite third‑party model letter
to the laws of your state,
you need to know or need to find
or need to ask an attorney
the answer to this question.

In 2015, J.D. Power acquired
NADA’s Used Car Guide
and www.nadaguides.com.

The company has rebranded
NADA Guides as J.D. Power
and rebranded www.nadaguides.com
as www.jdpower.com.

Whether your state’s laws
mention N.A.D.A. Guides or not,
to be sure of the correct answer
to this question,
ask the attorney with whom you meet.

Does your state’s
commissioner of insurance
approve J.D. Power
as an authorized source
of valuations for total-loss vehicles?

THIRD-PARTY total-loss claim.

questions_of_law_for_third_party_polite_letterSubchapter

To adapt
my muscular third‑party model letter
to the laws of your state,
you need to know or need to find
or need to ask an attorney
the answers to these questions.

In some states, state law goes on
to limit the mileage difference
between a comp vehicle
and a total-loss vehicle.

For example, the New Jersey
administrative code that governs
automobile physical damage claims
says:

Do your state’s laws say that,
for a comp vehicle to qualify
as substantially similar or comparable
to a total-loss vehicle,
the comp vehicle’s mileage
must be similar
to the total-loss vehicle’s mileage?
Do your state’s laws go on
to limit the mileage differences
between total-loss vehicles
and substantially similar
or comparable vehicles?

THIRD-PARTY total-loss claim.

(The discussion and question that follow
are the same as for question 1. above
for the polite model letter.)

In 2015, J.D. Power acquired
NADA’s Used Car Guide
and www.nadaguides.com.

The company has rebranded
NADA Guides as J.D. Power
and rebranded www.nadaguides.com
as www.jdpower.com.

Whether your state’s laws
mention N.A.D.A. Guides or not,
to be sure of the correct answer
to this question,
ask the attorney with whom you meet.

Does your state’s
commissioner of insurance
approve J.D. Power
as an authorized source
of valuations for total-loss vehicles?

THIRD-PARTY total-loss claim.

questions_of_law_for_third_party_muscular_letterSubchapter

Keep an eye out
for paragraphs of the law
that may prove useful to you
if the automobile insurance company
does not agree to the valuation amount
that you propose in your letter
for your total-loss vehicle.

While you are looking for the answers
to the previous questions
for your third-party total-loss claim,
you may wish to keep an eye out
for answers to a few questions
that are outside the scope
of your letter
to the automobile insurance company.

The answers to these questions
may prove useful to you
if the automobile insurance company
does not agree to the valuation amount
that you propose in your letter.

For each of these questions too,
you may wish
to download, print, and mark up
a PDF of the section of the law
that answers the question.

THIRD-PARTY total-loss claim.

In some states, the laws that regulate
how automobile insurance companies
are required to value total-loss vehicles
and settle total-loss claims say
that those laws apply
only to first-party claims.

In some states, those laws say
that the laws apply to first-party claims
and to third-party claims.

In some states, those laws say
that all the laws apply to first-party claims
and only some of the laws
apply to third-party claims.

Ordinarily, in most states,
you have much stronger rights
in the settlement of a third-party claim
than you do
in the settlement of a first-party claim.

The automobile insurance company
that you’re dealing with
on your third-party claim
may think and act like
they can treat you
the same way
that they treat their policyholders
on those policyholders’ first-party claims.

The automobile insurance company
that you’re dealing with
on your third-party claim
may even try to trick you
into conforming
with claim-settlement regulations
that apply only to first-party claims.

Don’t let them!

To be savvy enough
to keep the automobile insurance company
that you’re dealing with
from treating you
like you’re a first-party claimant,
familiarize yourself
with which of your state’s
automobile insurance
claim-settlement laws—
if any—
apply to you and your claim.

If your state’s laws
consistently talk about “the insured,”
and never say that the laws
also apply to third-party claimants,
then that language strongly suggests
that those laws do not apply to you
or to your third-party claim.

You are not the insured.

The at-fault-driver policyholder
is the insured.

Do the laws of your state that regulate
how automobile insurance companies
are required to value total-loss vehicles
and settle total-loss claims
apply only to first-party claims?
Or do all those laws
apply to both first-party claims
and third-party claims?
Or do all the laws
apply to first-party claims
and only some of the laws
also apply to third-party claims?

THIRD-PARTY total-loss claim.

If you dispute the valuation amount
that the automobile insurance company
proposes for your total-loss vehicle,
the laws of your state may require
the automobile insurance company
to go ahead and pay you
the amount of money
that is not in dispute.

The amount of money
that is not in dispute
includes the valuation amount
for your total-loss vehicle
that the automobile insurance company
proposed.

To require
the automobile insurance company
to go ahead and pay you
the valuation amount
that is not in dispute,
the laws of your state
may say something like this:

An insurer is not obligated
to pay the undisputed amount
until the insured
or third-party owner of the automobile:

(a) Agrees to execute documents
sufficient to transfer ownership
of the automobile
to the insurer; and
(b) Authorizes the insurer,
at the insurer’s expense,
to move the automobile
to a disclosed location
selected by the insurer,
where the automobile
will remain available
for inspection and evaluation
for not fewer than 14 calendar days.
After the expiration of the 14-day period,
the insurer may proceed
with the salvage sale of the automobile.

If you dispute the valuation amount
that the automobile insurance company proposes for your total-loss vehicle,
do the laws of your state require
the automobile insurance company
to go ahead and pay you
the amount of money
that is not in dispute?

THIRD-PARTY total-loss claim.

The laws of some states
give third-party total-loss claimants
a right of recourse.

If you have a right of recourse
and the automobile insurance company
refuses to value your total-loss vehicle
at its actual cash value,
then you may be able
to get additional money
from the automobile insurance company
if you exercise your right of recourse.

THIRD-PARTY total-loss claim.

If your state’s legislators
have given you a right of recourse,
they may also have given
the automobile insurance company
dubious ways to preclude or satisfy
your exercise of your right of recourse.

The automobile insurance company
may be able to preclude your exercise
of your right of recourse if,
when they send you a settlement check,
they identify
an allegedly substantially similar vehicle
for sale at a local automobile dealership
that you allegedly can buy
for their valuation amount.

Likewise, the automobile insurance company
may be able to satisfy your exercise
of your right of recourse if,
after you exercise your right of recourse,
they identify
an allegedly substantially similar vehicle
for sale at a local automobile dealership
that you allegedly can buy
for their valuation amount.

THIRD-PARTY total-loss claim.

If either of these possibilities come to pass,
then you likely will want to inspect
the automobile insurance company’s
candidate right-of-recourse vehicle
to determine if that vehicle
is, in fact, substantially similar
to your total-loss vehicle—
same make, same model, same model year,
same major options, similar mileage,
and same or better condition.

You likely will want to verify
that the automobile insurance company’s
candidate right-of-recourse vehicle
is for sale at the automobile dealership
that the automobile insurance company
alleges at the price that
the automobile insurance company alleges.

THIRD-PARTY total-loss claim.

If the laws of your state
give you a right of recourse,
counting from the day
that the automobile insurance company
puts the initial settlement check in the mail,
you likely have only so many days
in which to exercise your right of recourse
or you lose your right of recourse.

THIRD-PARTY total-loss claim.

Do the laws of your state
give you a right of recourse?
If you have a right of recourse,
do the laws of your state allow
an automobile insurance company
to preclude your exercise
of your right of recourse if,
when they send you a settlement check,
they identify
a substantially similar vehicle
for sale at a local automobile dealership
that you can buy
for their valuation amount?
If you have a right of recourse,
do the laws of your state allow
the automobile insurance company
to satisfy your exercise
of your right of recourse if,
after you exercise your right of recourse,
they identify
a substantially similar vehicle
for sale at a local automobile dealership
that you can buy
for their valuation amount?
If you have a right of recourse,
how many days
after the automobile insurance company
sends you a settlement check
do you have to exercise
your right of recourse
before you lose it?

THIRD-PARTY total-loss claim.

The laws of some states prohibit
an automobile insurance company
from saying that,
if you cash or deposit a settlement check,
then, thereby, you agree to the settlement.

Such a prohibition may use such language
as this:

Do the laws of your state prohibit
an automobile insurance company
from saying that,
if you cash or deposit
a settlement check, then, thereby,
you agree to the settlement?

THIRD-PARTY total-loss claim.

questions_of_law_in_case_third_party_letter_failsSubchapter

Questions about the laws of your state
to which the answers
may prove useful to you
if you end up suing
the at-fault driver and his or her
automobile insurance company
for the money
that the at-fault driver’s
automobile insurance company
cheated you out of.

The laws of some states
specify multiple sources
that an automobile insurance company
may use to come up
with an initial valuation offer
for a claimant’s total loss vehicle.

The laws then go on to say
that the automobile insurance company’s
initial valuation offer
cannot be lower
than the lowest valuation amount
from one of these approved sources.

The laws of some states say
that an automobile insurance company
may use as its initial valuation offer
a valuation generated by a valuation source
that uses a computerized data base
that is approved
by the state’s commissioner of insurance.

A state’s commissioner of insurance
may approve valuation sources
such as CCC Information Services
a.k.a. CCC Intelligent Solutions.

CCC Information Services
a.k.a. CCC Intelligent Solutions
produced the garbage-in-garbage-out
CCC market valuation report
for my total-loss vehicle
and produced
the GIGO CCC market-valuation report
for Maria’s total-loss vehicle.

Valuation sources that produce valuations
only for automobile insurance companies
and that use a computerized data base
to produce those valuations
likely produce the lowest valuations
of any of the approved sources.

Such valuation sources may have
motive, means, and opportunity
to undervalue your total-loss vehicle.

Do the laws of your state
specify multiple sources
that an automobile insurance company
may use to come up
with an initial valuation offer
for your total-loss vehicle?
Do the laws of your state say
that the automobile insurance company’s
initial valuation offer
for your total-loss vehicle
cannot be lower
than the lowest valuation amount
from one of the approved sources?
Do the laws of your state
allow an automobile insurance company
to use a valuation
generated by a valuation service
that uses a computerized data base?

THIRD-PARTY total-loss claim.

The laws of some states say
that an automobile insurance company
shall value a total-loss vehicle
at its actual cash value.

The laws of some states
define actual cash value.

Do the laws of your state say
that an automobile insurance company
shall value a total-loss vehicle
at its actual cash value?
Do the laws of your state
define actual cash value?

THIRD-PARTY total-loss claim.

The laws of some states defnine
substantially similar vehicle
or comparable vehicle.

Do the laws of your state define substantially similar vehicle
or comparable vehicle?

Regardless of what the statutory laws
of your state say,
keep in mind
that the fundamental principle
of the law of negligence torts
is this:

When one person,
through an act of negligence,
harms another person;
the negligent person
(or his or her insurance company)
is obligated to pay
the victim of the negligent act
enough money
to make the victim whole
for his or her loss.

That is, the negligent person
(or his or her insurance company)
is obligated to pay
the victim of the negligent act
enough money
to make the victim as well off financially
as he or she was before the negligent act.

If you cannot negotiate
a fair valuation of your total-loss vehicle
with the automobile insurance company,
then you can refuse to agree
to the automobile insurance company’s
valuation of your total-loss vehicle.

You can dispute their valuation.

You can sue the at-fault driver
for the amount of money
that his or her
automobile insurance company
cheated you out of.

THIRD-PARTY total-loss claim.

questions_of_third_party_consumer_protection_lawsSubchapter

If it’s more work
than you wish to do
to vet and edit your draft letter
against California’s laws,
then let the attorney
with whom you meet
vet and edit the letter for you.

I’m a do-it-yourself kind of person.

You may not be.

Or you may be too busy
with the rest of your life
to spend a lot of time
working on your total-loss claim.

If, for whatever reason,
you prefer not to vet and edit
a draft letter against your state’s laws,
don’t do it.

You will be sufficiently well prepared
to meet with an attorney
about your total-loss claim
so long as you provide him or her
with copies of:

The market valuation report
that you received
from the automobile insurance company
for your total-loss vehicle,
The Monroney Label window sticker
for your total-loss vehicle,
Your total-loss vehicle’s
J.D. Power Buy from Dealer price,
The specs that the J.D. Power calculator
used to value your total-loss vehicle,
Your draft letter
at whatever stage of development
it happens to be in,
The police report on your vehicle’s
collision or theft, and
If your claim is a first-party claim,
your automobile insurance policy.

If you provide the attorney
with these ingredients,
then he or she can turn the work
that you have done
into an effective letter and package.

skip_this_step_if_you_want_toChapter

Help me create model letters
tailored to the laws of every state.

Send me a few dollars.

Today I’m having to ask you
to do a lot more work
than I would like to.

I’m having to ask you
to vet and edit your draft letter
against the laws of your state
that I copied and pasted below.

As I continue to develop
wasyourcartotaledorstolen.com,
I hope to offer total-loss claimants
starter letters
for first-party total-loss claims
and starter letters
for third-party total-loss claims
that are tailored to the laws
of each and every state.

“Jesus, Jerry!

“That sounds like a helluva lot of work!”

Yeah, I know!

Shows you how much I hate seeing
giant, powerful, unethical corporations
rip off everyday Americans.

With starter letters that are tailored
to the laws of each and every state,
future total-loss claimants
who come to wasyourcartotaledorstolen.com
will have a lot less work to do.

They will be able to create draft letters
that require less of a local attorney’s time
to review, vet, tweak, and strengthen.

I’m itching to do the work.

In the left-hand column
next to each state’s laws,
I hope to give total-loss claimants
a guided tour of the laws that,
in their state, regulate
how automobile insurance companies
are required to value total-loss vehicles
and settle total-loss claims.

On that guided tour,
I plan to explain and comment on
the important provisions
of each state’s laws.

On that guided tour,
I plan to point out
the answers to questions
that, today, I have to ask you
to search for yourself.

On that guided tour,
I plan to point out which paragraphs
of each state’s laws read like
they were written
by a lobbyist who works
for automobile insurance companies.

Total-loss claimants
also will want to know
the answers to other questions
about the laws of their state
that do not appear in the state’s
automobile insurance regulatory laws.

Over time, as I continue my research
and as I receive more and more
pro bono publico guidance
(guidance for the public good)
from attorneys in each state;
I hope to post more and more answers
to these questions.

If I am able to achieve these goals,
then, over time, total-loss claimants
who come to wasyourcartotaledorstolen.com
will be able to gain a fuller,
more accurate, more precise,
and more powerful understanding
of the rights
that their state legislators
have given them
and of the rights
that their state legislators
have taken away from them.

Everyday Americans will be able
to have more knowledgeable
and more productive conversations
with local attorneys.

If everyday Americans
who are fed up
with automobile insurance companies
cheating them and ripping them off
will support my work;
then I may be able to build
my one-person efforts
into an organization.

With an organization,
we may be able to persuade
our state legislators
(and perhaps our national legislators)
to rewrite some of the laws
that make it so easy
for automobile insurance companies
to screw us all.

If you would like to help me
teach everyday Americans
how to get fair valuations
of their total-loss vehicles,
then, at the top right of your screen,

click this image:

Send me a few dollars.

With your help, I’m just getting started.

help_me_create_letters_tailored_to_laws_of_every_stateChapter

The laws of California that regulate
how automobile insurance companies
that do business in California
are required
to value total-loss vehicles
and settle total-loss claims.

My Comments

California Regulations

The regulations that govern
how insurance companies
that operate in California
are required
to value total‑loss vehicles
and settle total‑loss claims
are part
of the California Administrative Code.

California Code Of Regulations

Title 10 -
Investment

Chapter 5 -
Insurance Commission

Subchapter 7.5 -
Unfair or Deceptive Acts or Practices in the Business of Insurance

Article 1 -
Fair Claims Settlement Practices Regulations

Current through Register 2022 Notice Reg. No. 34, August 26, 2022

To help you zero in
on the most relevant and useful paragraphs
of your state’s
automobile insurance regulations,
here’s how I have color coded
your state’s laws:

What I believe to be
the most relevant and useful paragraphs
of your state’s law appear in red.

Relevant and potentially useful paragraphs
appear in black.

Paragraphs unlikely to be relevant or useful
appear in grey.

Just in case you landed here
looking for information
about how automobile insurance companies
are supposed to settle claims
in which your vehicle can be repaired
(partial-loss claims),
paragraphs of the law
that deal with repairs
appear in blue.

To make sure that a section
of the law has not changed
since I copied it and pasted it here,
at the end of that section,
click: Verify statute or Download PDF.

If you discover
that a section of a law has changed
or is no longer accessible
through casetext.com,
please send me an email
and let me know
so I can update the law
or update the verify link here.

Thomson Reuters Westlaw
recently acquired Casetext.
I do not know if Thomson Reuters Westlaw
will continue to make these state laws
available to everyday Americans for free.

Section 2695.1 - Preamble

(a) Section 790.03(h) of the California Insurance Code enumerates sixteen claims settlement practices that, when either knowingly committed on a single occasion, or performed with such frequency as to indicate a general business practice, are considered to be unfair claims settlement practices and are, thus, prohibited by this section of the California Insurance Code. The Insurance Commissioner has promulgated these regulations in order to accomplish the following objectives:
- (1) To delineate certain minimum standards for the settlement of claims which, when violated knowingly on a single occasion or performed with such frequency as to indicate a general business practice shall constitute an unfair claims settlement practice within the meaning of Insurance Code Section 790.03(h);
- (2) To promote the good faith, prompt, efficient and equitable settlement of claims on a cost effective basis;
- (3) To discourage and monitor the presentation to insurers of false or fraudulent claims; and,
- (4) To encourage the prompt and thorough investigation of suspected fraudulent claims and ensure the prompt and comprehensive reporting of suspected fraudulent claims as required by Insurance Code Section 1872.4.
(b) These regulations are not meant to provide the exclusive definition of all unfair claims settlement practices. Other methods, act(s), or practices not specifically delineated in this set of regulations may also be unfair claims settlement practices and subject to California Insurance Code Section 790.03(h) and/or California Insurance Code Section 790.06. These regulations are applicable to the handling or settlement of all claims subject to Article 6.5 of Division 1, Part 2, Chapter 1 of the California Insurance Code, commencing with Section 790, except as specifically provided below:
- (1) Workers' compensation insurance;
- (2) Liability insurance for the professional malpractice of health care providers as defined in California Code of Civil Procedure Section 364(f)(1);
- (3) Self insured or self funded plans which are bona fide Employee Retirement Income Security Act (”ERISA”) plans which are not also multiple employer welfare arrangements, to the extent that these ERISA plans are not covered by insurance;
- (4) Any other self funded or self insured plan, to the extent it is not covered by insurance, which is lawfully conducting business in this state.
(c) In recognition of both the unique relationship which exists under a surety bond between the surety, the obligee or beneficiary, and the principal, and the fact that the processing of surety claims is subject to the Unfair Practices Act, beginning with California Insurance Code Section 790, only sections 2695.1 through 2695.6, inclusive, section 2695.10, and sections 2695.12,2695.13 and 2695.14, inclusive, shall apply to the handling or settlement of claims brought under surety bonds.
(d) These regulations apply to home protection contracts and home protection companies defined in California Insurance Code Section 12740.
(e) All licensees, as defined in these regulations, shall have thorough knowledge of the regulations contained in this subchapter.
(f) Policy provisions relating to the investigation, processing and settlement of claims shall be consistent with or more favorable to the insured than the provisions of these regulations.
(g) The California Insurance Code provides the commissioner with access to all records of an insurer and the power to examine the affairs of every person engaged in the business of insurance to determine if such person is engaged in any unfair or deceptive act or practice. California Insurance Code Section 790.03(h) requires all persons engaged in the business of insurance to effectuate prompt, fair and equitable settlements of claims and to otherwise process claims in a fair and reasonable manner. The Department considers the use of reliable information to be an essential element of the fair and equitable settlement of claims. The fact that information, data or statistical methods used or relied upon by a licensee to process or establish the value of insurance claims is obtained through a third party source shall not absolve the licensee of its legal responsibility to comply with these regulations or to effectuate prompt, fair and equitable settlements of claims.Failure of a licensee to provide the commissioner with requested information sufficient to examine the licensee's claims handling practices may justify a finding that the licensee was in non-compliance with these regulations or other applicable insurance code provisions. Any and all information received pursuant to the Department's request shall be given confidential treatment, as provided in California Insurance Code section 735.5 and California Government Code Section 11180 et seq. When processing or establishing the value of a claim, a licensee shall not be responsible for the accuracy of information provided by a governmental entity, unless the licensee has discovered or been notified of the inaccuracy and has continued to use the information.

Citation:
Cal. Code Regs. Tit. 10, § 2695.1

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Section 2695.2 - Definitions

As used in these regulations:

(a) “Beneficiary” means:
- (1) for the purpose of life and disability claims, the party or parties entitled to receive the proceeds or benefits occurring under the policy in lieu of the insured; or,
- (2) for the purpose of surety claims, a person who is within the class of persons intended to benefit from the bond;
(b) “Calendar days” means each and every day including Saturdays, Sundays, Federal and California State Holidays, but if the last day for performance of any act required by these regulations falls on a Saturday, Sunday, Federal or State Holiday, then the period of time to perform the act is extended to and including the next calendar day which is not a Saturday, Sunday, or Federal or State holiday;
(c) “Claimant” means a first or third party claimant as defined in these regulations, any person who asserts a right of recovery under a surety bond, an attorney, any person authorized by operation of law to represent the claimant, or any of the following persons properly designated by the claimant in the manner specified in subsection 2695.5(c): an insurance adjuster, a public adjuster, or any member of the claimant's family.
(d) “Claims agent” means any person employed or authorized by an insurer, to conduct an investigation of a claim on behalf of an insurer or a person who is licensed by the Commissioner to conduct investigations of claims on behalf of an insurer. The term “claims agent”, however, shall not include the following:
- (1) an attorney retained by an insurer to defend a claim brought against an insured; or,
- (2) persons hired by an insurer solely to provide valuation as to the subject matter of a claim.
(e) “Extraordinary circumstances” means circumstances outside of the control of the licensee which severely and materially affect the licensee's ability to conduct normal business operations;
(f) “First party claimant” means any person asserting a right under an insurance policy as a named insured, other insured or beneficiary under the terms of that insurance policy, and including any person seeking recovery of uninsured motorist benefits;
(g) “Gross settlement amount” means the amount tendered plus the amount deducted as provided in the policy in the settlement of an automobile total loss claim;
(h) “Insurance agent” means:
- (1) the term “insurance agent” as used in section 31 of the California Insurance Code; or,
- (2) the term “life agent” as used in section 32 of the California Insurance Code; or,
- (3) any person who has authority or responsibility to notify an insurer of a claim upon receipt of a notice of claim by a claimant; or,
- (4) an underwritten title company.
(i) “Insurer” means a person licensed to issue or that issues an insurance policy or surety bond in this state, or that otherwise transacts the business of insurance in the state, including reciprocal and interinsurance exchanges, fraternal benefit societies, stock and mutual insurance companies, risk retention groups, California county mutual fire insurance companies, grants and annuities societies, entities holding certificates of exemption, non-profit hospital service plans, multiple employer welfare arrangements holding certificates of compliance pursuant to Article 4.7 of the California Insurance Code, and motor clubs, to the extent that they transact the business of insurance in the State. The term “insurer” for purposes of these regulations includes non-admitted insurers, the California FAIR Plan, the California Earthquake Authority, those persons licensed to issue or that issue an insurance policy pursuant to an assignment by the California Automobile Assigned Risk Plan, home protection companies as defined under California Insurance Code Section 12740, and any other entity subject to California Insurance Code Section 790.03(h). The term “insurer” shall not include insurance agents and brokers, surplus line brokers and special lines surplus line brokers.
(j) “Insurance policy” or “policy” means the written instrument in which any certificate of group insurance, contract of insurance, or non-profit hospital service plan is set forth. For the purposes of these regulations the terms insurance policy or policy do not include “surety bond” or “bond”. For the purposes of these regulations the term insurance policy or policy includes a home protection contract or any written instrument in which any certificate of insurance or contract of insurance is set forth that is issued pursuant to the California Automobile Assigned Risk Plan, the California Earthquake Authority, or the California FAIR Plan;
(k) “Investigation” means all activities of an insurer or its claims agent related to the determination of coverage, liabilities, or nature and extent of loss or damage for which benefits are afforded by an insurance policy, obligations or duties under a bond, and other obligations or duties arising from an insurance policy or bond.
(l) “Knowingly committed” means performed with actual, implied or constructive knowledge, including, but not limited to, that which is implied by operation of law.
(m) “Licensee” means any person that holds a license or Certificate of Authority from the Insurance Commissioner, or any other entity for whom the Insurance Commissioner's consent is required before transacting business in the State of California or with California residents. The term “licensee” for purpose of these regulations does not include an underwritten title company if the underwriting agreement between the underwritten title company and the title insurer affirmatively states that the underwritten title company is not authorized to handle policy claims on behalf of the title insurer.
(n) “Notice of claim” means any written or oral notification to an insurer or its agent that reasonably apprises the insurer that the claimant wishes to make a claim against a policy or bond issued by the insurer and that a condition giving rise to the insurer's obligations under that policy or bond may have arisen. For purposes of these regulations the term “notice of claim” shall not include any written or oral communication provided by an insured or principal solely for informational or incident reporting purposes.
(o) “Notice of legal action” means notice of an action commenced against the insurer with respect to a claim, or notice of action against the insured received by the insurer, or notice of action against the principal under a bond, and includes any arbitration proceeding;
(p) “Obligee” means the person named as obligee in a bond;
(q) “Person” means any individual, association, organization, partnership, business, trust, corporation or other entity;
(r) “Principal” means the person whose debt or other obligation is secured or guaranteed by a bond and who has the primary duty to pay the debt or discharge the obligation;
(s) “Proof of claim” means any evidence or documentation in the possession of the insurer, whether as a result of its having been submitted by the claimant or obtained by the insurer in the course of its investigation, that provides any evidence of the claim and that reasonably supports the magnitude or the amount of the claimed loss.
(t) “Remedial measures” means those actions taken by an insurer to correct or cure any error or omission in the handling of claims on the part of its insurance agent as defined in subsection 2695.2(h), including, but not limited to:
- (1) written notice to the insurance agent that the insurance agent is in violation of the regulations contained in this subchapter;
- (2) transmission of a copy of the regulations contained in this subchapter and instructions for their implementation;
- (3) reporting the error or omission in the handling of claims by the insurance agent to the Department of Insurance;
(u) “Replacement crash part” means a replacement for any of the nonmechanical sheet metal or plastic parts which generally constitute the exterior of a motor vehicle, including inner and outer panels;
(v) “Single act” for the purpose of determining any penalty pursuant to California Insurance Code Section 790.035 is any commission or omission which in and of itself constitutes a violation of California Insurance Code Section 790.03 or this subchapter;
(w) “Surety bond” or “bond” means the written instrument in which a contract of surety insurance, as defined in California Insurance Code Section 105, is set forth;
(x) “Third party claimant” means any person asserting a claim against any person or the interests insured under an insurance policy;
(y) “Willful” or “Willfully” when applied to the intent with which an act is done or omitted means simply a purpose or willingness to commit the act, or make the omission referred to in the California Insurance Code or this subchapter. It does not require any intent to violate law, or to injure another, or to acquire any advantage.

Citation:
Cal. Code Regs. Tit. 10, § 2695.2

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Section 2695.3 -
File and Record Documentation

(a) Every licensee's claim files shall be subject to examination by the Commissioner or by the Commissioner's duly appointed designees. These files shall contain all documents, notes and work papers (including copies of all correspondence) which reasonably pertain to each claim in such detail that pertinent events and the dates of the events can be reconstructed and the licensee's actions pertaining to the claim can be determined;
(b) To assist in such examination all insurers shall:
- (1) maintain claim data that are accessible, legible and retrievable for examination so that an insurer shall be able to provide the claim number, line of coverage, date of loss and date of payment of the claim, date of acceptance, denial or date closed without payment. This data must be available for all open and closed files for the current year and the four preceding years;
- (2) record in the file the date the licensee received, date(s) the licensee processed and date the licensee transmitted or mailed every material and relevant document in the file; and
- (3) maintain hard copy files or maintain claim files that are accessible, legible and capable of duplication to hard copy; files shall be maintained for the current year and the preceding four years.
(c) The requirements of this section shall be satisfied where the licensee provides documentation evidencing inability to obtain data, nonexistence of data, or difficulty in obtaining clear documentary support for actions due to catastrophic losses, or other unusual circumstances providing the licensee establishes to the satisfaction of the Commissioner that the circumstances alleged by the licensee do exist and have materially affected the licensee's ability to comply with this regulation. Any licensee that alleges an inability to comply with this section shall establish and submit to the Commissioner a plan for file and record documentation to be used by such licensee while the circumstances alleged to preclude compliance with this subsection continue to exist.

Citation:
Cal. Code Regs. Tit. 10, § 2695.3

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Section 2695.4 -
Representation of Policy Provisions and Benefits

(a) Every insurer shall disclose to a first party claimant or beneficiary, all benefits, coverage, time limits or other provisions of any insurance policy issued by that insurer that may apply to the claim presented by the claimant. When additional benefits might reasonably be payable under an insured's policy upon receipt of additional proofs of claim, the insurer shall immediately communicate this fact to the insured and cooperate with and assist the insured in determining the extent of the insurer's additional liability.
(b) No insurer shall misrepresent or conceal benefits, coverages, time limits or other provisions of the bond which may apply to the claim presented under a surety bond.
(c) No insurer shall deny a claim on the basis of the claimant's failure to exhibit property, unless there is documentation in the file
- (1) of reasonable demand by the insurer, and unfounded refusal by the claimant, to exhibit property, or
- (2) of the breach of any policy provision providing for the exhibition of property.
(d) Except where a time limit is specified in the policy, no insurer shall require a first party claimant under a policy to give notification of a claim or proof of claim within a specified time.
(e) No insurer shall:
- (1) request that a claimant sign a release that extends beyond the subject matter which gave rise to the claim payment unless, prior to execution of the release, the legal effect of the release is disclosed and fully explained by the insurer to the claimant in writing. For purposes of this subsection, an insurer shall not be required to provide the above explanation or disclosure to a claimant who is represented by an attorney at the time the release is presented for signature;
- (2) be precluded from including in any release a provision requiring the claimant to waive the provisions of California Civil Code Section 1542 provided that, prior to execution of the release, the legal effect of the release is disclosed and fully explained by the insurer to the claimant in writing. For purposes of this subsection, an insurer shall not be required to provide the above explanation or disclosure to a claimant who is represented by an attorney at the time the release is presented for signature.
(f) No insurer shall issue checks or drafts in partial settlement of a loss or claim that contain or are accompanied by language releasing the insurer, the insured, or the principal on a surety bond from total liability unless the policy or bond limit has been paid, or there has been a compromise settlement agreed to by the claimant and the insurer as to coverage and amount payable under the insurance policy or bond.
(g) No insurer shall require a first party claimant or beneficiary to submit duplicative proofs of claim where coverage may exist under more than one policy issued by that insurer.

Citation:
Cal. Code Regs. Tit. 10, § 2695.4

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Section 2695.5 -
Duties upon Receipt of Communications

(a) Upon receiving any written or oral inquiry from the Department of Insurance concerning a claim, every licensee shall immediately, but in no event more than twenty-one (21) calendar days of receipt of that inquiry, furnish the Department of Insurance with a complete written response based on the facts as then known by the licensee. A complete written response addresses all issues raised by the Department of Insurance in its inquiry and includes copies of any documentation and claim files requested. This section is not intended to permit delay in responding to inquiries by Department personnel conducting a scheduled examination on the insurer's premises.
(b) Upon receiving any communication from a claimant, regarding a claim, that reasonably suggests that a response is expected, every licensee shall immediately, but in no event more than fifteen (15) calendar days after receipt of that communication, furnish the claimant with a complete response based on the facts as then known by the licensee. This subsection shall not apply to require communication with a claimant subsequent to receipt by the licensee of a notice of legal action by that claimant.
(c) The designation specified in subsection 2695.2(c) shall be in writing, signed and dated by the claimant, and shall indicate that the designated person is authorized to handle the claim. All designations shall be transmitted to the insurer and shall be valid from the date of execution until the claim is settled or the designation is revoked. A designation may be revoked by a writing transmitted to the insurer, signed and dated by the claimant, indicating that the designation is to be revoked and the effective date of the revocation.
(d) Upon receiving notice of claim, every licensee or claims agent shall immediately transmit notice of claim to the insurer.
(e) Upon receiving notice of claim, every insurer shall immediately, but in no event more than fifteen (15) calendar days later, do the following unless the notice of claim received is a notice of legal action:
- (1) acknowledge receipt of such notice to the claimant unless payment is made within that period of time. If the acknowledgement is not in writing, a notation of acknowledgement shall be made in the insurer's claim file and dated. Failure of an insurance agent or claims agent to promptly transmit notice of claim to the insurer shall be imputed to the insurer except where the subject policy was issued pursuant to the California Automobile Assigned Risk Program.
- (2) provide to the claimant necessary forms, instructions, and reasonable assistance, including but not limited to, specifying the information the claimant must provide for proof of claim;
- (3) begin any necessary investigation of the claim.
(f) An insurer may not require that the notice of claim under a policy be provided in writing unless such requirement is specified in the insurance policy or an endorsement thereto.

Citation:
Cal. Code Regs. Tit. 10, § 2695.5

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Section 2695.6 -
Training and Certification

(a) Every insurer shall adopt and communicate to all its claims agents written standards for the prompt investigation and processing of claims, and shall do so within ninety (90) days after the effective date of these regulations or any revisions thereto.
(b) All licensees shall provide thorough and adequate training regarding the regulations to all their claims agents. Licensees shall certify that their claims agents have been trained regarding these regulations and any revisions thereto. However, licensees need not provide such training or certification to duly licensed attorneys.

A licensee shall demonstrate compliance with this subsection by the following methods:
- (1) where the licensee is an individual, the licensee shall annually certify in writing under penalty of perjury that the licensee has read and understands the regulations and any and all amendments thereto;
- (2) where the licensee is an entity, the annual written certification shall be executed, under penalty of perjury, by a principal of the entity as follows:
  - (A) that the licensee's claims adjusting manual contains a copy of these regulations and all amendments thereto; and,
  - (B) that clear written instructions regarding the procedures to be followed to effect proper compliance with this subchapter were provided to all its claims agents;
- (3) where the licensee retains insurance adjusters as defined in California Insurance Code Section 14021, the licensee must provide training to the insurance adjusters regarding these regulations and annually certify, in a declaration executed under penalty of perjury, that such training is provided. Alternately, the insurance adjuster may annually certify in writing, under penalty of perjury, that the insurance adjuster has read and understands these regulations and all amendments thereto or has successfully completed a training seminar which explains these regulations;
- (4) a copy of the certification required by subsections 2695.6(b)(1), (2) or (3) shall be maintained at all times at the principal place of business of the licensee, to be provided to the Commissioner only upon request.
- (5) the annual certification required by this subsection shall be completed on or before September 1 of each calendar year.

Citation:
Cal. Code Regs. Tit. 10, § 2695.6

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Section 2695.7 -
Standards for Prompt, Fair and Equitable Settlements

(a) No insurer shall discriminate in its claims settlement practices based upon the claimant's age, race, gender, income, religion, language, sexual orientation, ancestry, national origin, or physical disability, or upon the territory of the property or person insured.
(b) Upon receiving proof of claim, every insurer, except as specified in subsection 2695.7(b)(4) below, shall immediately, but in no event more than forty (40) calendar days later, accept or deny the claim, in whole or in part. The amounts accepted or denied shall be clearly documented in the claim file unless the claim has been denied in its entirety.
- (1) Where an insurer denies or rejects a first party claim, in whole or in part, it shall do so in writing and shall provide to the claimant a statement listing all bases for such rejection or denial and the factual and legal bases for each reason given for such rejection or denial which is then within the insurer's knowledge. Where an insurer's denial of a first party claim, in whole or in part, is based on a specific statute, applicable law or policy provision, condition or exclusion, the written denial shall include reference thereto and provide an explanation of the application of the statute, applicable law or provision, condition or exclusion to the claim. Every insurer that denies or rejects a third party claim, in whole or in part, or disputes liability or damages shall do so in writing.
- (2) Subject to the provisions of subsection 2695.7(k), nothing contained in subsection 2695.7(b)(1) shall require an insurer to disclose any information that could reasonably be expected to alert a claimant to the fact that the subject claim is being investigated as a suspected fraudulent claim.
- (3) Written notification pursuant to this subsection shall include a statement that, if the claimant believes all or part of the claim has been wrongfully denied or rejected, the claimant may have the matter reviewed by the California Department of Insurance, and shall include the address and telephone number of the unit of the Department which reviews claims practices.
- (4) The time frame in subsection 2695.7(b) shall not apply to claims arising from policies of disability insurance subject to Section 10123.13 of the California Insurance Code, disability income insurance subject to Section 10111.2 of the California Insurance Code or mortgage guaranty insurance subject to Section 12640.09(a) of the California Insurance Code, and shall not apply to automobile repair bills arising from policies of automobile collision and comprehensive insurance subject to Section 560 of the California Insurance Code. All other provisions of subsections 2695.7(b)(1), (2), and (3) are applicable.
(c)
- (1) If more time is required than is allotted in subsection 2695.7(b) to determine whether a claim should be accepted and/or denied in whole or in part, every insurer shall provide the claimant, within the time frame specified in subsection 2695.7(b), with written notice of the need for additional time. This written notice shall specify any additional information the insurer requires in order to make a determination and state any continuing reasons for the insurer's inability to make a determination. Thereafter, the written notice shall be provided every thirty (30) calendar days until a determination is made or notice of legal action is served. If the determination cannot be made until some future event occurs, then the insurer shall comply with this continuing notice requirement by advising the claimant of the situation and providing an estimate as to when the determination can be made.
- (2) Subject to the provisions of subsection 2695.7(k), nothing contained in subsection 2695.7(c)(1) shall require an insurer to disclose any information that could reasonably be expected to alert a claimant to the fact that the claim is being investigated as a possible suspected fraudulent claim.
(d) Every insurer shall conduct and diligently pursue a thorough, fair and objective investigation and shall not persist in seeking information not reasonably required for or material to the resolution of a claim dispute.
(e) No insurer shall delay or deny settlement of a first party claim on the basis that responsibility for payment should be assumed by others, except as may otherwise be provided by policy provisions, statutes or regulations, including those pertaining to coordination of benefits.
(f) Except where a claim has been settled by payment, every insurer shall provide written notice of any statute of limitation or other time period requirement upon which the insurer may rely to deny a claim. Such notice shall be given to the claimant not less than sixty (60) days prior to the expiration date; except, if notice of claim is first received by the insurer within that sixty days, then notice of the expiration date must be given to the claimant immediately. With respect to a first party claimant in a matter involving an uninsured motorist, this notice shall be given at least thirty (30) days prior to the expiration date; except, if notice of claim is first received by the insurer within that thirty days, then notice of the expiration date must be given to the claimant immediately. This subsection shall not apply to a claimant represented by counsel on the claim matter.
(g) No insurer shall attempt to settle a claim by making a settlement offer that is unreasonably low. The Commissioner shall consider any admissible evidence offered regarding the following factors in determining whether or not a settlement offer is unreasonably low:
- (1) the extent to which the insurer considered evidence submitted by the claimant to support the value of the claim;
- (2) the extent to which the insurer considered legal authority or evidence made known to it or reasonably available;
- (3) the extent to which the insurer considered the advice of its claims adjuster as to the amount of damages;
- (4) the extent to which the insurer considered the advice of its counsel that there was a substantial likelihood of recovery in excess of policy limits;
- (5) the procedures used by the insurer in determining the dollar amount of property damage;
- (6) the extent to which the insurer considered the probable liability of the insured and the likely jury verdict or other final determination of the matter;
- (7) any other credible evidence presented to the Commissioner that demonstrates that
  - (i) any amount offered by the insurer in settlement of a first-party claim to an insured not represented by counsel, or
  - (ii) the final amount offered in settlement of a first-party claim to an insured who is represented by counsel or
  - (iii) the final amount offered in settlement of a third party claim by the insurer is below the amount that a reasonable person with knowledge of the facts and circumstances would have offered in settlement of the claim.
(h) Upon acceptance of the claim in whole or in part and, when necessary, upon receipt of a properly executed release, every insurer, except as specified in subsection 2695.7(h)(1) and (2) below, shall immediately, but in no event more than thirty (30) calendar days later, tender payment or otherwise take action to perform its claim obligation. The amount of the claim to be tendered is the amount that has been accepted by the insurer as specified in subsection 2695.7(b). In claims where multiple coverage is involved, and where the payee is known, amounts that have been accepted by the insurer shall be paid immediately, but in no event more than thirty (30) calendar days, if payment would terminate the insurer's known liability under that individual coverage, unless impairment of the insured's interests would result. The time frames specified in this subsection shall not apply where the policy provides for a waiting period after acceptance of claim and before payment of benefits.
- (1) The time frame specified in subsection 2695.7(h) shall not apply to claims arising from policies of disability insurance subject to Section 10123.13 of the California Insurance Code, disability income insurance subject to Section 10111.2 of the California Insurance Code, or of mortgage guaranty insurance subject to Section 12640.09(a) of the California Insurance Code, and shall not apply to automobile repair bills subject to Section 560 of the California Insurance Code. All other provisions of Section 2695.7(h) are applicable.
- (2) Any insurer issuing a title insurance policy shall either tender payment pursuant to subsection 2695.7(h) or take action to resolve the problem which gave rise to the claim immediately upon, but in no event more than thirty (30) calendar days after, acceptance of the claim.
(i) No insurer shall inform a claimant that said claimant's rights may be impaired if a form or release is not completed within a specified time period unless the information is given for the purpose of notifying the claimant of any applicable statute of limitations or policy provision or the time limitation within which claims are required to be brought against state or local entities.
(j) No insurer shall request or require an insured to submit to a polygraph examination unless authorized under the applicable insurance contract and state law.
(k) Subject to the provisions of subsection 2695.7(c), where there is a reasonable basis, supported by specific information available for review by the California Department of Insurance, for the belief that the claimant has submitted or caused to be submitted to an insurer a suspected false or fraudulent claim as specified in California Penal Code Section 550 or California Insurance Code Section 1871.4(a), the number of calendar days specified in subsection 2695.7(b) shall be:
- (1) increased to eighty (80) calendar days; or,
- (2) suspended until otherwise ordered by the Commissioner, provided the insurer has complied with California Insurance Code Section 1872.4 and the insurer can demonstrate to the Commissioner that it has made a diligent attempt to determine whether the subject claim is false or fraudulent within the eighty day period specified by subsection 2695.7(k)(1).
(l) No insurer shall deny a claim based upon information obtained in a telephone conversation or personal interview with any source unless the telephone conversation or personal interview is documented in the claim file pursuant to the provisions of Section 2695.3.
(m) No insurer shall make a payment to a provider, pursuant to a policy provision to pay medical benefits, and thereafter seek recovery or set-off from the insured on the basis that the amount was excessive and/or the services were unnecessary, except in the event of a proven false or fraudulent claim, subject to the provisions of Section 10123.145 of the California Insurance Code.
(n) Every insurer requesting a medical examination for the purpose of determining liability under a policy provision shall do so only when the insurer has a good faith belief that such an examination is reasonably necessary.
(o) No insurer shall require that a claimant withdraw, rescind or refrain from submitting any complaint to the California Department of Insurance regarding the handling of a claim or any other matter complained of as a condition precedent to the settlement of any claim.
(p) Every insurer shall provide written notification to a first party claimant as to whether the insurer intends to pursue subrogation of the claim. Where an insurer elects not to pursue subrogation, or discontinues pursuit of subrogation, it shall include in its notification a statement that any recovery to be pursued is the responsibility of the first party claimant. This subsection does not require notification if the deductible is waived, the coverage under which the claim is paid requires no deductible to be paid, the loss sustained does not exceed the applicable deductible, or there is no legal basis for subrogation.
(q) Every insurer that makes a subrogation demand shall include in every demand the first party claimant's deductible. Every insurer shall share subrogation recoveries on a proportionate basis with the first party claimant, unless the first party claimant has otherwise recovered the whole deductible amount. No insurer shall deduct legal or other expenses from the recovery of the deductible unless the insurer has retained an outside attorney or collection agency to collect that recovery. The deduction may only be for a pro rata share of the allocated loss adjustment expense. This subsection shall not apply when multiple policies have been issued to the insured(s) covering the same loss and the language of these contracts prescribe alternative subrogation rights. Further, this subsection shall not apply to disability and health insurance as defined in California Insurance Code Section 106.

Citation:
Cal. Code Regs. Tit. 10, § 2695.7

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Section 2695.8 -
Additional Standards Applicable to Automobile Insurance

(a) This section enumerates standards which apply to adjustment and settlement of automobile insurance claims.
- (1) the words “automobile” and “vehicle” are used synonymously.
(b) In evaluating automobile total loss claims the following standards shall apply:
- (1) The insurer may elect a cash settlement that shall be based upon the actual cost of a “comparable automobile” less any deductible provided in the policy. This cash settlement amount shall include all applicable taxes and one-time fees incident to transfer of evidence of ownership of a comparable automobile. This amount shall also include the license fee and other annual fees to be computed based upon the remaining term of the loss vehicle's current registration. This procedure shall apply whether or not a replacement automobile is purchased.
  - (A) If the insured chooses to retain the loss vehicle or if the third party claimant retains the loss vehicle, the cash settlement amount shall include the sales tax associated with the cost of a comparable automobile, discounted by the amount of sales tax attributed to the salvage value of the loss vehicle. The cash settlement amount shall also include all fees incident to transfer of the claimant's vehicle to salvage status. The salvage value may be deducted from the settlement amount and shall be determined by the amount for which a salvage pool or a licensed salvage dealer, wholesale motor vehicle auction or dismantler will purchase the salvage. If requested by the claimant, the insurer shall provide the name, address and telephone number of the salvage dealer, salvage pool, motor vehicle auction or dismantler who will purchase the salvage. The insurer shall disclose in writing to the claimant that notice of the salvage retention by the claimant must be provided to the Department of Motor Vehicles and that this notice may affect the loss vehicle's future resale and/or insured value. The disclosure must also inform the claimant of said claimant's right to seek a refund of the unused license fees from the Department of Motor Vehicles.
- (2) A “comparable automobile” is one of like kind and quality, made by the same manufacturer, of the same or newer model year, of the same model type, of a similar body type, with options and mileage similar to the insured vehicle. Newer model year automobiles may not be used as comparable automobiles unless there are not sufficient comparable automobiles of the same model year to make a determination as set forth in Section 2695.8(b)(4), below. In determining the cost of a comparable automobile, the insurer may use either the asking price or actual sale price of that automobile. Any differences between the comparable automobile and the insured vehicle shall be permitted only if the insurer fairly adjusts for such differences. Any adjustments from the cost of a comparable automobile must be discernible, measurable, itemized, and specified as well as appropriate in dollar amount and so documented in the claim file. Deductions taken from the cost of a comparable automobile that cannot be supported shall not be used. The actual cost of a comparable automobile shall not include any deduction for the condition of a loss vehicle unless the documented condition of the loss vehicle is below average for that particular year, make and model of vehicle. This subsection shall not preclude deduction for prior and/or unrelated damage to the loss vehicle. A comparable automobile must have been available for retail purchase by the general public in the local market area within ninety (90) calendar days of the final settlement offer. The comparable automobiles used to calculate the cost shall be identified by the vehicle identification number (VIN), the stock or order number of the vehicle from a licensed dealer, or the license plate number of that comparable vehicle if this information is available. The identification shall also include the telephone number (including area code) or street address of the seller of the comparable automobile.
- (3) Notwithstanding subsection (2), above, upon approval by the Department of Insurance, an insurer may use private sales data from the Department of Motor Vehicles, or other approved sources, which does not contain the seller's telephone number or street address. Approval by the Department of Insurance shall be contingent on the Department's determination that reasonable steps have been taken to limit the use of private sales data that may be inaccurately reported to the Department of Motor Vehicles, or other approved sources.
- (4) The insurer shall take reasonable steps to verify that the determination of the cost of a comparable vehicle is accurate and representative of the market value of a comparable automobile in the local market area. Upon its request, the department shall have access to all records, data, computer programs, or any other information used by the insurer or any other source to determine market value. The cost of a comparable automobile shall be determined as follows and, once determined, shall be fully itemized and explained in writing for the claimant at the time the settlement offer is made:
  - (A) when comparable automobiles are available or were available in the local market area in the last 90 days, the average cost of two or more such comparable automobiles; or,
  - (B) when comparable automobiles are not available or were not available in the local market area in the last 90 days, the average of two or more quotations from two or more licensed dealers in the local market area; or,
  - (C) the cost of a comparable automobile as determined by a computerized automobile valuation service that produces statistically valid fair market values within the local market area; or
  - (D) if it is not possible to determine the cost of a comparable automobile by using one of the methods described in subsections (b)(3)(A), (b)(3)(B) and (b)(3)(C) of this section, the cost of a comparable automobile shall otherwise be supported by documentation and fully explained to the claimant. Any adjustments to the cost of a comparable automobile shall be discernible, measurable, itemized, and specified as well as appropriate in dollar amount and so documented in the claims file. Deductions taken from the cost of a comparable automobile that cannot be supported shall not be used
- (5) In first party automobile total loss claims, the insurer may elect to offer a replacement automobile which is a specified comparable automobile available to the insured with all applicable taxes, license fees and other fees incident to transfer of evidence of ownership of the automobile paid by the insurer at no cost other than any deductible provided in the policy. The offer and any rejection thereof must be documented in the insurer's claim file. A replacement automobile must be in as good or better overall condition than the insured vehicle and available for inspection within a reasonable distance of the insured's residence.
- (6) Subsection 2695.8(b) applies to the evaluation of third-party automobile total loss claims, but does not change existing law with respect to the obligations of an insurer in settling such claims with a third party.
(c) In first party automobile total loss claims, every insurer shall provide notice to the insured at the time the settlement payment is sent or final settlement offer is made that if notified by the insured within thirty-five (35) calendar days after the insured receives the claim payment or final settlement offer that said insured cannot purchase a comparable automobile for the gross settlement amount, the insurer will reopen its claim file. If subsequently notified by the insured the insurer shall reopen its claim file and utilize the following procedures:
- (1) The insurer shall locate a comparable automobile for the gross settlement amount determined by the company at the time of settlement and shall provide the insured with the information required in (c)(4), below, or offer a replacement vehicle in accordance with section 2695.8(b)(4). Any such vehicle must be available in the local market area; or,
- (2) The insurer shall either pay the insured the difference between the amount of the gross settlement and the cost of the comparable automobile which the insured has located, or negotiate and purchase this vehicle for the insured; or,
- (3) The insurer shall invoke the appraisal provision of the insurance policy.
- (4) No insurer is required to take action under this subsection if its documentation to the insured at the time of final settlement offer included written notification of the identity of a specified comparable automobile which was available for purchase at the time of final settlement offer for the gross settlement amount determined by the insurer. The documentation shall include the telephone number (including area code) or street address of the seller of the comparable automobile and:
  - (A) the vehicle identification number (VIN) or,
  - (B) the stock or order number of the vehicle from a licensed dealer, or
  - (C) the license plate number of such comparable vehicle.
(d) No insurer shall, where liability and damages are reasonably clear, recommend that the third party claimant make a claim under the claimant's own policy to avoid paying the claim under the policy issued by that insurer.

(e) No insurer shall:
- (1) require that an automobile be repaired at a specific repair shop; or,
- (2) after a claimant has chosen an automotive repair shop, suggest or recommend that the claimant select a different repair shop, except as permitted by California Insurance Code section 758.5. For purposes of California Insurance Code section 758.5 and this section, a claimant has chosen an automotive repair shop when the claimant has specified to the insurer a specific automotive repair shop where the claimant wishes to repair the vehicle. For purposes of this section, “automotive repair shop” or “repair shop” means an automotive repair dealer, as defined in Section 9880.1 of the Business and Professions Code, registered with, or licensed by, the Bureau of Automotive Repair as an auto body and/or paint shop.
- (3) communicate false, deceptive, or misleading information to the claimant, including, but not limited to:
  - (A) Advising the claimant that an inspection of the vehicle will occur at a date that is later than required by subdivision (e)(4) of this Section 2695.8.
  - (B) Making a statement to the claimant to the effect that the automotive repair shop chosen by the claimant has a record of poor service or poor repair quality, or making any other statement to the claimant with respect to the chosen repair shop, if the statement is known to be, or should by the exercise of reasonable care be known to be, untrue, deceptive or misleading.
  - (C) Advising the claimant that the automotive repair shop chosen by the claimant has a record of poor service or poor repair quality, or of other similar allegations against the repair shop, solely on the basis of the shop's participation or nonparticipation in a labor rate survey.
- (4) require a claimant to travel an unreasonable distance or wait an unreasonable period of time either to inspect a replacement automobile, to conduct an inspection of the claimant's vehicle, to obtain a repair estimate, or to have the automobile repaired at a specific repair shop.
  - (A) In the case of both first-party and third-party claims: For purposes of this section, an unreasonable distance shall be, for cities or urban areas with a population of 100,000 or higher, more than fifteen (15) miles, and for all other areas of the state, more than twenty-five (25) miles, from the location where the vehicle is located and made available for inspection by the claimant.
  - (B) In the case of first-party claims only:
    - 1. Initial inspection. Except as provided in Subdivision (e)(4)(B)2. or (e)(4)(B)3. of this section, if an insurer chooses to exercise its right to inspect the damaged vehicle, the insurer shall within six (6) business days after receiving the notice of claim:
      - a. request of the claimant that the claimant make the vehicle available for inspection by the insurer, and
      - b. provided the claimant makes the vehicle reasonably available for inspection, inspect the damaged vehicle.
    - 2. Inspections and re-inspections in response to requests for supplemental estimates. Subdivision (e)(4)(B)1. of this section notwithstanding, and except as provided in Subdivision (e)(4)(B)3. of this section, if in response to a request for a supplemental estimate an insurer chooses to exercise its right to inspect or re-inspect the damaged vehicle, the insurer shall within six (6) business days after receiving the request for a supplemental estimate:
      - a. request of the claimant that the claimant make the vehicle available for inspection or re-inspection by the insurer, and
      - b. provided the claimant makes the vehicle reasonably available for inspection or re-inspection, inspect or re-inspect the damaged vehicle.
    - 3. Photographs or estimates in lieu of inspection or re-inspection; inspections and re-inspections upon receipt of photographs or estimates. If the insurer requests from the claimant photographs of the damaged vehicle, or an estimate of repairs, in lieu of a physical inspection, such a request must be made within three (3) business days after the insurer's receipt of the notice of claim or request for a supplemental estimate and shall include notification to the claimant that, upon receipt of the photographs or estimate, the insurer may elect to inspect or re-inspect the vehicle. Subdivisions (e)(4)(B)1. and (e)(4)(B)2. of this section notwithstanding, if, after receiving the photographs or estimate of repairs from the claimant in response to a request pursuant to the immediately preceding sentence, the insurer subsequently elects to inspect or re-inspect the vehicle, the insurer shall within six (6) business days following its receipt of the photographs or estimate:
      - a. request of the claimant that the claimant make the vehicle available for inspection or re-inspection by the insurer, and
      - b. provided the claimant makes the vehicle reasonably available for inspection or re-inspection, inspect or re-inspect the damaged vehicle.
  - (C) In the case of third-party claims only: The provisions of Subdivision (e)(4)(B) above notwithstanding, should an insurer exercise its right to inspect or re-inspect the damaged vehicle, the insurer shall within six (6) business days from the time the insurer decides to inspect or re-inspect the third-party claimant's vehicle:
    - 1. request of the third-party claimant that the third-party claimant make the vehicle available for inspection or re-inspection by the insurer, and
    - 2. provided the third-party claimant makes the vehicle reasonably available for inspection or re-inspection by the insurer, inspect or re-inspect the damaged vehicle.
  - (D) In the event that the first-party claimant or third-party claimant fails to make the damaged vehicle reasonably available for inspection or re-inspection during the six-day period specified in Subdivision (e)(4)(B)1., (e)(4)(B)2., (e)(4)(B)3. or (e)(4)(C) of this section, the insurer shall in each case inspect or re-inspect the damaged vehicle as soon after the end of that six-day period as is reasonable.
  - (E) For purposes of this Subdivision (e)(4):
    - 1. Requests made of a claimant may be directed to the claimant or, where the claimant has chosen an automotive repair shop, to the automotive repair shop chosen by such claimant.
    - 2. A claimant makes the damaged vehicle reasonably available for inspection or re-inspection by the insurer when either the claimant or the automotive repair shop chosen by the claimant makes the vehicle reasonably available for inspection or re-inspection by the insurer.
    - 3. A claimant fails to make the vehicle reasonably available for inspection or re-inspection by the insurer when neither the claimant nor the automotive repair shop chosen by the claimant makes the vehicle reasonably available for inspection or re-inspection by the insurer.
- (5) after the claimant has chosen an automotive repair shop, require that the claimant have the vehicle inspected at or by an automotive repair shop where the insurer has a Direct Repair Program, or at or by any other automotive repair shop identified by the insurer.

(f) If a partial loss is settled on the basis of a written estimate prepared by or for the insurer, the insurer shall supply the claimant with a copy of the estimate upon which the settlement is based. The estimate prepared by or for the insurer shall be of an amount that will allow for repairs to be made in accordance with accepted trade standards for good and workmanlike automotive repairs by an “auto body repair shop” as defined in section 9889.51 of the Business and Professions Code, and in accordance with the standards of automotive repair required of auto body repair shops as described in the Business and Professions Code and associated regulations, including, but not limited to, Section 3365 of Title 16 of the California Code of Regulations. An insurer shall not prepare an estimate that deviates from the standards, costs, and/or guidelines provided by the third-party automobile collision repair estimating software used by the insurer to prepare the estimate, if such deviation would result in an estimate that would not allow for repairs to be made in accordance with accepted trade standards for good and workmanlike automotive repairs by an auto body repair shop, as described in this subdivision. If the claimant subsequently contends, based upon a written estimate that the claimant obtains, that necessary repairs will exceed the written estimate prepared by or for the insurer, the insurer shall:
- (1) pay the difference between the written estimate and a higher estimate obtained by the claimant; or,
- (2) if requested by the claimant, promptly provide the claimant with the name of at least one repair shop that will make the repairs for the amount of the insurer's written estimate. The insurer shall cause the damaged vehicle to be restored to its condition prior to the loss at no additional cost to the claimant other than as stated in the policy or as otherwise allowed by law. The insurer shall maintain documentation of all such communications; or,
- (3) reasonably adjust any written estimates prepared by the repair shop of the claimant's choice and provide a copy of the adjusted estimate to the claimant and the claimant's repair shop. The adjusted estimate provided to the claimant and repair shop shall be either an edited copy of the claimant's repair shop estimate or a supplemental estimate based on the itemized copy of the claimant's repair shop estimate. The adjusted estimate shall identify the specific adjustment made to each item and the cost associated with each adjustment made to the claimant's shop's estimate.
(g) No insurer shall require the use of non-original equipment manufacturer replacement crash parts in the repair of an automobile unless all of the following conditions are met:
- (1) the parts are at least equal to the original equipment manufacturer parts in terms of kind, quality, safety, fit, and performance;
- (2) the insurer specifying the use of non-original equipment manufacturer replacement crash parts shall pay the cost of any modifications to the parts that may become necessary to effect the repair;
- (3) the insurer specifying the use of non-original equipment manufacturer replacement crash parts warrants that such parts are at least equal to the original equipment manufacturer parts in terms of kind, quality, safety, fit, and performance. The insurer must disclose in writing, in any estimate prepared by or for the insurer, the fact that it warrants that such parts are at least equal to the original equipment manufacturer parts in terms of kind, quality, safety, fit, and performance;
- (4) all original and non-original manufacturer replacement crash parts, manufactured after the effective date of this subdivision, when supplied by repair shops shall carry sufficient permanent, non-removable identification so as to identify the manufacturer. Such identification shall be accessible to the greatest extent possible after installation; and,
- (5) the use of non-original equipment manufacturer replacement crash parts is disclosed in accordance with section 9875.1 of the California Business and Professions Code.
- (6) If an insurer specifying the use of non-original equipment manufacturer replacement crash parts has knowledge that a part is not equal to the original equipment manufacturer part in terms of kind, quality, safety, fit, and performance, or does not otherwise comply with this section, it shall immediately cease requiring the use of the part and shall, within thirty (30) calendar days, notify the distributor of the non-compliant aspect of the part.
- (7) In the repair of a particular vehicle, an insurer specifying the use of a non-original equipment manufacturer replacement crash part that is not equal to the original equipment manufacturer part in terms of kind, quality, safety, fit, and performance, or does not otherwise comply with this section, shall pay for the costs associated with returning the part and the cost to remove and replace the non-original equipment manufacturer part with a compliant non-original equipment manufacturer part or an original equipment manufacturer part.
- (8) Nothing in this subdivision prohibits an insurer from seeking reimbursement or indemnification from a third party for the costs associated with the insurer's compliance with this subdivision, including, but not limited to, costs associated with the insurer's obligation to warrant the part, modifications to the part, or returning, removing or replacing a non-compliant, non-original equipment manufacturer part. However, seeking reimbursement or indemnification from a third party shall not in any way modify the insurer's obligation to comply with this subdivision. An insurer shall retain primary responsibility to comply with this subdivision and shall not refuse or delay compliance with this subdivision on the basis that responsibility for payment or compliance should be assumed by a third party.
(h) No insurer shall require an insured or claimant to supply parts for replacement.
(i) When the amount claimed is adjusted because of betterment or depreciation, all justification shall be contained in the claim file. Any adjustments shall be discernable, measurable, itemized, and specified as to dollar amount, and shall accurately reflect the value of the betterment or depreciation. This subsection shall not preclude deduction for prior and/or unrelated damage to the loss vehicle. The basis for any adjustment shall be fully explained to the claimant in writing and shall:
- (1) reflect a measurable difference in market value attributable to the condition and age of the vehicle, and
- (2) apply only to parts normally subject to repair and replacement during the useful life of the vehicle such as, but not limited to, tires, batteries, et cetera.
(j) In a first party partial loss claim, the expense of labor necessary to repair or replace the damage is not subject to depreciation or betterment unless the insurance contract contains a clear and unambiguous provision permitting the depreciation of the expense of labor.
(k) After a covered loss under a policy of automobile collision coverage or automobile physical damage coverage as defined in California Insurance Code Section 660, where towing and storage are reasonably necessary to protect the vehicle from further loss, the insurer shall pay reasonable towing and storage charges incurred by the claimant. The insurer shall provide reasonable notice to the claimant before terminating payment for storage charges, so that the claimant has time to remove the vehicle from storage. This subsection shall also apply to a third-party claim filed under automobile liability coverage as defined in California Insurance Code section 660, however, payment to a third party claimant may be prorated based upon the comparative fault of the parties.

Citation:
Cal. Code Regs. Tit. 10, § 2695.8

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casetext.com, the citation.

“Jerry, looks to me like
the legislators of some states
are pimping us out
to automobile insurance companies.”

“Jerry, I skimmed through the laws
of half a dozen or so different states.

“Looks to me like the legislators
of some states aren’t just making it easy
for automobile insurance companies
to have their way with us.

“Looks to me like they’re pimping us out
to the automobile insurance companies.”

If that’s the conclusion that you come to,
my friend, I cannot necessarily say
that I would disagree with you.

“Our state legislators are pimping out
to automobile insurance companies
the very voters
who voted those legislators
into office?

“How can that be?”

In a word, money!

Every year, in the USA,
automobile insurance companies
collect hundreds of billions of dollars
in automobile insurance premiums.

Money of that magnitude
translates into political power.

Automobile insurance companies
have many ways
in which they can reward
whoever helps them maximize their profits.

Then too, there’s a revolving door
between insurance companies
and state regulatory departments.

Some employees of insurance companies
go on to become
state commissioners of insurance.

Some state commissioners of insurance
go on to become highly-paid employees
of insurance companies
or go on to become
fabulously compensated lobbyists
for insurance companies.

One way for a man or woman
to maximize his or her career income
in the insurance industry
is to help insurance companies
maximize their profits
before he or she becomes
a state commissioner of insurance
and to help insurance companies
maximize their profits
after he or she becomes
a state commissioner of insurance.

“Is there anything we can do?”

In principle, yes.

The Affordable Care Act
limits the percentage
of health-insurance premium dollars
that health insurance companies
can keep for themselves
and their shareholders.

But I have yet to run across a law
that limits the percentage
of automobile insurance premium dollars
that automobile insurance companies
can keep for themselves
and their shareholders.

I’d like to see
our state legislators enact such laws
or our federal legislators enact such a law.

“Until that happens,
we’re goinng to keep getting pimped out
to the automobile insurance companies?”

You read your state’s laws.

You’ve witnessed up close the conduct
of the automobile insurance company
that you’re dealing with
under your state’s laws.

I’ll leave it to you
to reach your own conclusions.

I’m doing what I can to teach folks
how to fight back against rapacious
automobile insurance companies.

From my questions
about your state’s laws,
you learned that the legislators
of some states
give total-loss claimants
rights that legislators
of other states take away.

I would like to see
the legislators of states
that have taken away rights
restore those rights.

I would like to see state legislators
give total-loss claimants
rights that would make it easy
for total-loss claimants
to get fair valuations
of their total-loss vehicles.

I’d like to build an organization
that can try to persuade our legislators
to change some of the laws
that make it so easy
for automobile insurance companies
to have their way with you.

If you would like to help me,
then, at the top right of your screen,

click this image:

Send me a few dollars.

Looks_to_me_like_legisators_of_some_states_are_pimping_us_outChapter

Get your draft document into shape
for an attorney to review it.

When I imagine you meeting with an attorney,
I see your attorney sitting at a computer.

The attorney has your draft letter
up on a computer screen
that you can see.

If someone other than you
did your word processing,
he or she is with you.

The two or three of you also have printouts
of your draft letter and other documents.

The attorney reads through your draft letter.

The attorney comments on
what is good in your draft letter
and on what needs to be fixed,
improved, deleted, or changed.

She or he asks you questions.

To answer some of the questions,
you pull out the document or the page
wherein the answer to that question
is to be found.

At the computer keyboard,
the attorney edits, fixes,
and strengthens your draft letter.

If you will imagine your meeting
with the attorney,
then doing so may help you
shape up and organize your draft letter
and other documents for that meeting.

When you are deciding
what to delete and what to keep,
imagine the workflow
that you want to accomplish
in the hour or so that you will spend
with the attorney.

Imagine how your conversation
with the attorney is likely to flow.

Shape up your draft letter accordingly.

Doing so may mean little more
than putting hard page breaks in places
that will organize the document
into meaningful sections.

Preserve the section of your draft document
where you used
“Find and replace” ➞ “Replace all”
to replace the specifics
of my fictitious total-loss claim
with the specifics of your total-loss claim.

This list of specifics
will give your attorney
the specifics of your total-loss claim
all in one place.

If some of what is in your draft letter
will have no role in the finished document
or in your conversation with the attorney,
then, probably, you can safely delete it.

Keep in mind that you’re not trying to create
a perfectly polished, legally pristine letter.

You’re putting together information
and supporting documents
that an attorney can vet, edit, and shape
into a powerful package.

You’re preparing yourself
for a fast-paced, efficient,
and productive conversation
with an attorney
about how to craft a letter
that will get you a fair valuation
for your total-loss vehicle.

When you’ve developed
your draft letter
as far as you wish to,
find an attorney
who knows how to deal
with automobile insurance companies
on total-loss property damage claims.

Get_your_draft_document_into_shapeChapter

Find an attorney
who is knowledgeable
about automobile insurance
total-loss property damage claims.

See if an attorney in your county
advertises his or her expertise here
on wasyourcartotaledorstolen.com.

Attorneys have many different specializations.

To help you get a fair valuation
of your total-loss vehicle,
you likely will want to find an attorney
who is knowledgeable
about automobile insurance
total-loss property damage claims.

If an attorney in your county
or in a nearby county
advertises his or her expertise
on wasyourcartotaledorstolen.com,
then he or she is likely knowledgeable
about automobile insurance
total-loss property damage claims.

He or she is likely
primed and prepared
to have with you
the kind of conversation
that I’ve prepared you for.

He or she may even
have already created a model letter
that picks up where mine leaves off.

If a local attorney
has already created
a model letter that picks up
where mine leaves off,
then his or her letter
will already be tailored
to the laws of your state.

To see if an attorney in your county
advertises his or services
here at wasyourcartotaledorstolen.com,
at the top of your screen,
click the image

of four attorneys standing together.

Then click your county.

Find_a_knowledgeable_attorneyChapter

Make an appointment with the attorney.

Email your draft letter
and supporting documents
to the attorney.

However you find an attorney
who is well qualified
to help you get a fair valuation
of your total-loss vehicle,
make an appointment
for an hour of his or her time.

If you want the attorney
to have your draft letter
up on a computer screen
during your meeting,
then email your draft letter
and its supporting documents
to the attorney
before your meeting.

If you are going to email your draft letter
and its supporting documents
to the attorney, then you need to write
an email for that purpose.

At the end of your draft document,
I have included as an example
the email that I would write
for that purpose.

If you wish to do so,
you may use my example email
as the starting point for your email.

If, earlier, you used
“Find and replace” ➞ “Replace all”
to change the specifics
of my fictitious total-loss claim
to the specifics
of your total-loss claim,
then those changes
will have rippled through
to my example email.

Make_an_appointment_with_an_attorneyChapter

Meet with the attorney.

If you have a co-pilot,
take him or her with you.

Ask your attorney to:

Review your draft letter
against the CCC market valuation report
or other market valuation report
that you received
from the automobile insurance company;
Review your draft letter against
the J.D. Power Buy from Dealer price
for your total-loss vehicle;
Review your draft letter against
your state’s laws; and
If your total-loss claim
is a first-party claim,
review your draft letter against
your automobile insurance policy.

Ask your attorney, to edit, tweak,
and strengthen your draft letter
as he or she thinks best.

Or, if your attorney wants you
to make the changes to your draft letter,
take good notes of what
your attorney tells you to change.

If you have time enough to do so,
ask the attorney what steps
he or she thinks you should take
if the automobile insurance company
does not agree to the valuation amount
that you propose.

If you don’t accomplish everything
that you wish to in one hour,
make a follow-up appointment.

Do not let
the automobile insurance company
rush you into a settlement
that is not fair to you.

Meet_with_the_attorneyChapter

Email your letter
and its supporting documents
to the automobile insurance company.

If your attorney asked you and your co-pilot
to make the changes to your draft letter,
then make those changes.

Pretty your letter up.

When you’re satisfied with
how your letter looks and reads,
email your letter
and its supporting documents
to the automobile insurance company
that you’re dealing with.

Email_your_letter_and_documents_to_the_automobile_insurance_companyChapter

If your letter and supporting documents
get you a fair valuation
of your total-loss vehicle,
then great!

Congratulations!

High fives!

You rule!

If you’ve made in this far
into wasyourcartotaledorstolen.com,
then you’ve done a lot of work!

You and perhaps a co-pilot
have spent a lot of hours
getting savvy to ways
in which automobile insurance companies
try to cheat people
out of fair settlemets
of their total-loss claims.

If you have succeeded
in getting a fair valuation
of your total-loss vehilce,
then, as we say down South,
I’m proud fer ya!

Your hard work has paid off!

High fives!

God bless you!

If you would like to share
your success story
with other total-loss claimants
in California, email me your story.

I’ll create a web page
here in the California arena
of wasyourcartotaledorstolen.com
where you and other folks
who live in California
can share your stories
with one another.

(I may edit your story a little bit
to keep you and me
from getting into trouble.)

If you would like to help me
help others achieve
what you have achieved,
then, at the top right of your screen,

click this image:

Send me a few dollars.

Congratulations!

And thank you!

If_your_letter_gets_you_a_fair_valuation_high_fivesChapter

If your letter did not get you
a fair valuation
of your total-loss vehicle, then,
if you have a right of recourse,
exercise your right of recourse.

By now, you should know
whether or not your state laws
give you a right of recourse.

You should know how many days
after the automobile insurance company
mails you the settlement check
you have to exercise
your right of recourse
before it expires.

To learn how I would go about
exercising my right of recourse,
at the top of your screen,
click the photo
of the young woman
who is determined

to exercise her rights:

If_your_letter_did_not_get_you_a_fair_valuation_exercise_your_right_of_recourseChapter

If you do not have a right of recourse
or if exercising your right of recourse
did not get you a fair valuation
of your total-loss vehicle,
then you may want to initiate
a small-claims lawsuit
or even a large-claims lawsuit.

To get a fair valuation
of my total-loss vehicle,
I sued the at-fault driver
in a small-claims lawsuit
for the amount of money
that her automobile insurance company,
Travelers, cheated me out of.

I got an additional $5,920 from Travelers.

If your total-loss claim
is a third-party claim
and the automobile insurance company
refused to negotiate
a fair valuation of your total-loss vehicle,
then you can sue the at-fault driver
for the amount of money
that his or her
automobile insurance company
cheated you out of.

If your total-loss claim
is a first-party claim,
then things are much more complicated.

Your automobile insurance policy
may contain an appraisal clause,
may contain an arbitration clause,
or may contain both.

Your state’s legislators
may have taken away rights
that you would otherwise have
under the law of contracts.

Hence, if your total-loss claim
is a first-party claim,
then I suggest that you
ask an attorney in your county
whether or not it makes sense
for you to invoke the appraisal clause
in your automobile insurance policy,
invoke the arbitration clause
in your automobile insurance policy,
or initiate a lawsuit
against your automobile insurance company.

To learn how,
in a third-party total-loss claim,
I would initiate a small-claims lawsuit
and perhaps a large-claims lawsuit,
at the top of your screen,
click the photo of the total-loss claimant
and the attorney
for the automobile insurance company
arguing their case

in front of a judge.

If_your_right_of_recourse_does_not_get_you_a_fair_valuation_you_may_want_to_sueChapter

Nota bene

Jerry Marlow is not an attorney. Neither information nor opinions published on this site constitute legal advice. This site is not a lawyer referral service. No attorney‑client or confidential relationship is or will be formed by use of this site. Any attorney listings on this site are paid attorney advertising. In some states, the information on this website may be considered a lawyer referral service.

Terms of use

Jerry Marlow grants human users of wasyourcartotaledorstolen.com permission to use the copyrighted materials on wasyourcartotaledorstolen.com for their personal use free of charge.

The fee to use copyrighted materials on wasyourcartotaledorstolen.com to train artificial intelligence software (AI) is $4 million.

Reproduction of copyrighted materials on wasyourcartotaledorstolen.com for commercial use without the written permission of Jerry Marlow is strictly prohibited.

Jerry Marlow does not grant users permission to reproduce on other websites any of the copyrighted material published on wasyourcartotaledorstolen.com.

Jerry Marlow does not grant users permission to reproduce via audio, video, or any other audiovisual medium any of the copyrighted material published on wasyourcartotaledorstolen.com.

If you wish to use any of the copyrighted material published on wasyourcartotaledorstolen.com in any way for which permission is not explicitly granted, contact Jerry Marlow at jerrymarlow@jerrymarlow.com.

To make your draft letter to the automobile insurance company more consistent with the laws of California, vet and edit your draft letter against the laws of California that I copied and pasted below.

If your total-loss claim is a first-party claim, then, to adapt my first-party model letters to the laws of your state, you need to know or need to find or need to ask an attorney the answers to these sets of questions.

To adapt my polite first‑party model letter to the laws of your state, you need to know or need to find or need to ask an attorney the answer to this question.

To adapt my muscular first‑party model letter to the laws of your state, you need to know or need to find or need to ask an attorney the answers to these questions.

Keep an eye out for paragraphs of the law that may prove useful to you if your automobile insurance company does not agree to the valuation amount for your total-loss vehicle that you propose in your letter.

The legislators of a few states give rights to first-party claimants that legislators of other states take away from first-party claimants.

Are your state legislators right givers?

Or right takers?

If your total-loss claim is a third-party claim, then, to adapt my third-party model letters to the laws of your state, you need to know or need to find or need to ask an attorney the answers to these sets of questions.

To adapt my polite third‑party model letter to the laws of your state, you need to know or need to find or need to ask an attorney the answer to this question.

To adapt my muscular third‑party model letter to the laws of your state, you need to know or need to find or need to ask an attorney the answers to these questions.

Keep an eye out for paragraphs of the law that may prove useful to you if the automobile insurance company does not agree to the valuation amount that you propose in your letter for your total-loss vehicle.

Questions about the laws of your state to which the answers may prove useful to you if you end up suing the at-fault driver and his or her automobile insurance company for the money that the at-fault driver’s automobile insurance company cheated you out of.

If it’s more work than you wish to do to vet and edit your draft letter against California’s laws, then let the attorney with whom you meet vet and edit the letter for you.

Help me create model letters tailored to the laws of every state.

Send me a few dollars.

The laws of California that regulate how automobile insurance companies that do business in California are required to value total-loss vehicles and settle total-loss claims.

My Comments

California Regulations

California Code Of Regulations

Title 10 - Investment

Chapter 5 - Insurance Commission

Subchapter 7.5 - Unfair or Deceptive Acts or Practices in the Business of Insurance

Article 1 - Fair Claims Settlement Practices Regulations

“Jerry, looks to me like the legislators of some states are pimping us out to automobile insurance companies.”

Get your draft document into shape for an attorney to review it.

Find an attorney who is knowledgeable about automobile insurance total-loss property damage claims.

See if an attorney in your county advertises his or her expertise here on wasyourcartotaledorstolen.com.

Make an appointment with the attorney.

Email your draft letter and supporting documents to the attorney.

Meet with the attorney.

Email your letter and its supporting documents to the automobile insurance company.

If your letter and supporting documents get you a fair valuation of your total-loss vehicle, then great!

Congratulations!

High fives!

You rule!

If your letter did not get you a fair valuation of your total-loss vehicle, then, if you have a right of recourse, exercise your right of recourse.

If you do not have a right of recourse or if exercising your right of recourse did not get you a fair valuation of your total-loss vehicle, then you may want to initiate a small-claims lawsuit or even a large-claims lawsuit.

To make your draft letter
to the automobile insurance company
more consistent
with the laws of California,
vet and edit your draft letter
against the laws of California
that I copied and pasted below.

If your total-loss claim
is a first-party claim,
then, to adapt
my first-party model letters
to the laws of your state,
you need to know or need to find
or need to ask an attorney
the answers to these sets of questions.

To adapt
my polite first‑party model letter
to the laws of your state,
you need to know or need to find
or need to ask an attorney
the answer to this question.

To adapt
my muscular first‑party model letter
to the laws of your state,
you need to know or need to find
or need to ask an attorney
the answers to these questions.

Keep an eye out
for paragraphs of the law
that may prove useful to you
if your automobile insurance company
does not agree to the valuation amount
for your total-loss vehicle
that you propose in your letter.

The legislators of a few states
give rights to first-party claimants
that legislators of other states
take away from first-party claimants.

If your total-loss claim
is a third-party claim,
then, to adapt
my third-party model letters
to the laws of your state,
you need to know or need to find
or need to ask an attorney
the answers to these sets of questions.

To adapt
my polite third‑party model letter
to the laws of your state,
you need to know or need to find
or need to ask an attorney
the answer to this question.

To adapt
my muscular third‑party model letter
to the laws of your state,
you need to know or need to find
or need to ask an attorney
the answers to these questions.

Keep an eye out
for paragraphs of the law
that may prove useful to you
if the automobile insurance company
does not agree to the valuation amount
that you propose in your letter
for your total-loss vehicle.

Questions about the laws of your state
to which the answers
may prove useful to you
if you end up suing
the at-fault driver and his or her
automobile insurance company
for the money
that the at-fault driver’s
automobile insurance company
cheated you out of.

If it’s more work
than you wish to do
to vet and edit your draft letter
against California’s laws,
then let the attorney
with whom you meet
vet and edit the letter for you.

Help me create model letters
tailored to the laws of every state.

The laws of California that regulate
how automobile insurance companies
that do business in California
are required
to value total-loss vehicles
and settle total-loss claims.

Title 10 -
Investment

Chapter 5 -
Insurance Commission

Subchapter 7.5 -
Unfair or Deceptive Acts or Practices in the Business of Insurance

Article 1 -
Fair Claims Settlement Practices Regulations

“Jerry, looks to me like
the legislators of some states
are pimping us out
to automobile insurance companies.”

Get your draft document into shape
for an attorney to review it.

Find an attorney
who is knowledgeable
about automobile insurance
total-loss property damage claims.

See if an attorney in your county
advertises his or her expertise here
on wasyourcartotaledorstolen.com.

Email your draft letter
and supporting documents
to the attorney.

Email your letter
and its supporting documents
to the automobile insurance company.

If your letter and supporting documents
get you a fair valuation
of your total-loss vehicle,
then great!

If your letter did not get you
a fair valuation
of your total-loss vehicle, then,
if you have a right of recourse,
exercise your right of recourse.

If you do not have a right of recourse
or if exercising your right of recourse
did not get you a fair valuation
of your total-loss vehicle,
then you may want to initiate
a small-claims lawsuit
or even a large-claims lawsuit.