Farmers falsifies comparable data to lower settlement offer!

If you have a pending total-loss auto claim with Farmers, I highly recommend that you call and investigate every comparable vehicle that Farmers is using. Read on...

My car was stolen, completely stripped, and declared a total loss by Farmers. It was a 1994 Acura Integra GSR model. The GSR is a high-end sport version of the Integra, with 170 horsepower VTEC engine, highly sought-after alloy wheels unique to the GSR model, and all sport-tuned and luxury features available. I demonstrated to Farmers on 3 occasions with actual market data that these cars are selling for $7,000 up to as much as $14,000.

By comparison, a plain 1994 Acura Integra (RS, LS model) with a wimpy 142 horsepower engine and fewer features sells for around $4,000 to $5,000.

Well, guess how much Farmers' settlement offer is? The first offer was $4,400, their latest offer is $5,100. So I started investigating their comparable vehicles. Whenever I looked for my own comparables, I could never find more than three 1994/1995 Acura Integra GSR vehicles for sale. So, I was scratching my head when I read in Farmers' valuation report that they had a whopping 10 Integra GSR comparables. I thought, "Wow, where did they find all those?" They provided 16 vehicle comps. Six were RS or LS models (and thus no good for comparison purposes) and the other ten were GSR models.

Well, I started calling the sellers of the Integra GSR model comparable vehicles. Of the 10, three were unreachable (disconnected number, no contact info, etc.) Of the remaining seven, NONE OF THEM were actually GSR models! They were all the cheaper RS or LS models that Farmers was falsely representing as GSR models!

By taking cheaper RS and LS models, and claiming they were GSR models, they were arriving at an extremely low-ball valuation. I presented them 3 different sets of comparables which clearly demonstrate the value of my vehicle to be $3,000 to $4,000 more than their offer.

The irony of the situation is that my car was stolen BECAUSE it is a GSR model. There is a black market for GSR VTEC engines and wheels and other parts. But Farmers does not want to compensate me for a GSR model, they only want to compensate me for a RS/LS model. But of course if my car was a RS/LS model, it would not have been stolen in the first place!

Presently, the Washington State Insurance Commissioner is investigating my situation, as this involves blatant attempted FRAUD!

It is also interesting to note that Farmers' first offer was made only a few days before the rental car benefit expired, even though their valuation report was dated just days after my car was stolen (a month earlier)! Surely they expected that I would agree to the settlement so that I would not be without a car. Unfortunately for them, I don't go down without a fight!

My car was stolen on February 13, 2006. The rental car benefit expired around March 24, 2006. It is now May 17, 2006, and I still don't have any money from Farmers or a car. Farmers was required to reply to the Insurance Commissioner by May 15, 2006. According to the Commissioner's office, Farmers replied and said they won't change their offer. So the Commissioner's office is now forcing them to justify their offer, which unfortunately will delay this process further (which I am sure makes Farmers happy).

I always expect insurance companies to resist paying claims and to lowball, but I have to tell you, I never expected them to deliberately falsify information to attempt to defraud me! They should lose their business license for this!!!



Edited 1 time(s). Last edit at 08/28/2006 07:52PM by administrator.

Michael,

Great job on fighting for what your car is worth! Farmers Insurance is a lowballing claim denying company. Farmers Insurance will take advantage of you as much as you will let them. Anyone who is insured should take your complaint as a lesson, Farmers seems like a good company right up until the point where you actually have to file a claim with them. Then you find out what Farmers Insurance is really all about.

Best of luck with your case. Keep us posted!



michaelmcd Wrote:
-------------------------------------------------------
> If you have a pending total-loss auto claim with
> Farmers, I highly recommend that you call and
> investigate every comparable vehicle that Farmers
> is using. Read on...
>

Most likely Farmers uses an outside company for total loss valuations, either CCC or Autotrack (I'm guessing CCC). While CCC reports can be good and in detail, they are only as good as the information they are given. They can also be difficult to understand.

The _biggest_ problem is that CCC is not given correct information on the vehicle. They decode the VIN but I'm guessing the VIN on your vehicle would not show the modifications made at the factory. The carrier also submits the year make and model to CCC but it's not uncommon for this information to be incorrect... even the carrier may have incorrect information (from the agent, application for insurance, etc). Usually errors occur in that the appraiser who inspects a damage vehicle quickly fills out the total loss data sheet. I understand that the vehicle was stolen in this case.

You should review the total loss evaluation as sometimes, on exotic vehicles, the same vehicle cannot be found in the database of the company submitting the valuation. In that case, similar vehicle values are used and then there is a "correction" made to those values to bring them in line with the vehicle in question. That may be the case here.

What you _need_ to do is go over the valuation in detail. Look over every aspect of it for errors or things that don't add up. Take your own documentation and send in all that you've found to the adjuster. Ask that they (perhaps a supervisor) reconsider the value based on the information you have submitted (include a short letter with your review of the valuation they used).

As far as not making an offer until 1 month went by... this is standard procedure for _all_ insurance companies. Many vehicles are recovered within 30 days of when they are stolen. I don't know of any carrier that does not wait 3-4 weeks before paying a total loss claim. You may not like it but it's a good business practice, reasonable, and done this way by every carrier. Some policies have Transportation Expense built into the policy to partially pay for a rental when an insured vehicle is stolen. If you had the foresight to pay for rental reimbursement, you are a smart man. In that the total loss valuation was done the day after the claim was reported means the adjuster was on the ball and doing their job well.

Just to put this into perspective, while you would not except fraud from the insurance company, do you think they should not expect fraud from the people they insure? I'm not speaking of you... I'm speaking of the other thousands of people that file fraudulent total theft claims. I'm just trying to put things into perceptive here.

With all that being said, I _don't_ like CCC or Autotrack evaluations. _Many_ of them are incorrect. Most amount to small discrepancies that don't matter much but some are big, such as this possible error. I've mentioned in a prior post that Farmers hires _only_ adjusters with Bachelor degrees. This excludes many experienced adjusters. Almost all adjusters without experience don't/won't take the time to review a total loss valuation and look for errors (heck, most would not be able to understand them). It's time consuming. I have seen thousands of them and review them very carefully now. Better I take an hour to make sure it's right the 1st time.

I'd _strongly_ recommend to do as I've suggested above. I also would suggest that you remain calm when discussing the situation. While the adjuster may be wrong, they are holding the check book. IMHO, there is never a reason for _anyone_ (including the adjuster/carrier) to act unprofessional.

This is not True. Not all insurance companies wait one month to go by to make an offer. Farmers Insurance was rated one of the WORST in terms of paying off claims in 30 days or less by Consumer Reports. Farmers Insurance is considered one of the "poorest performers".
See March 2006 issue of Consumer Report and
[www.post-gazette.com]

FLAdjuster Wrote:
-------------------------------------------------------

> As far as not making an offer until 1 month went
> by... this is standard procedure for _all_
> insurance companies.

My car was just declaired a total loss. a 95 Dodge Intrepid ES. The KBB Value 4740.00 is almost twice what they offered me, around 2600.00. They showed me thier comparison vehicals. Only one was the ES model and it was thier "top price" so it wasn't counted. I had to find adds on the same cars myself and sent the ajuster the links. I found the same model car I had in worse shape on sale for 4000.00 to 6000.00. I still have not heard back but this is infuriating. Without the money my car is acually worth I can not afford a sutable and reliable car. Not on a teacher's salary with a new baby.

To the previous poster.... I did a looked back over your research. First, let me advise you that KBB will almost ALWAYS come back with a high value, typically higher than the vehicles Actual Cash Value. I can't explain it, but it's true. Ask any car dealer. They can only dream of selling their autos for what KBB says that they're worth. Also check NADA.com. They'll likely be a little lower then KBB, but about right on price. The CCC evaluations have a tendency to come in low in regards to "special" vehicles, i.e. heavily optioned or customized. Secondly, when you value your vehicle on KBB, look for "PRIVATE PARTY VALUE". The third option is a marketing tool that helps dealers establish a starting point for opening negotiations...that's not what you're looking for. Third... unless you have trophies that you have won with your auto at car shows, you're probably not going to get "excellent" condition. You will need to use the "average" condition because, well, most cars are "average". With unknown mileage, KBB came in at 3250. ACV would probably be a little lower. Their value may be 400-600 dollars low (in my limited perspective), but probably not 50% low as you suggest.

Here's my advice. The insurance company has made this offer based on what they believe any 1995 Dodge Intrepid ES was worth at the time of your loss. These values are assigned "objectively", or at least as objectively as possible. What you need to do is establish why your Intrepid is worth more than most of the other Intrepids out there. You know, new tires, new engine, new paint. Something that adds some value back to the vehicle. I'm sure that you saw a few Dodges for sale in the 1500-2200 range, and you don't want that value, so don't expect the high values you see advertised either.

Good luck! Let us know how it works out.

I was rear ended last friday. I have a very well cared for 99 Suburban LT. First off, I'm concerned that the total loss department is contacting me and they haven't come out to look at the truck yet. I appreciate the postings as I will be ready when the adjustor comes out to assess the damage.

To "FLAdjuster" - I am sorry you feel the need to justify Farmer's behavior, but none of your arguments make sense in my case.

First, the car was recovered one day after it was stolen. Thus, there is no reason why Farmer's had to wait a month to make me a settlement offer.

Secondly, the decoded VIN does indeed describe the model types.

Thirdly, the Acura Integra GSR is not exotic. It is not as common as the RS/LS, but hardly exotic. I see them on the road every day and I can always find at least a few for sale.

Fourthly, as for the incorrect models, if it were merely random incorrect data, one would expect a random assortment of correct and incorrect vehicles. However, in this case EVERY SINGLE alleged high-end GSR model was NOT a GSR. And every single low-end RS/LS was correctly a RS/LS. This is clearly not random, and is clearly designed to defraud me.

And finally, I have presented Farmers with nearly 20 comparable vehicles over three different occassions, which clearly demonstrated a market value of my vehicle in the range of $8,000 - $9,000. Yet, Farmers has ignored every single one, claiming they are all "statistical outliers" while at the same time they can't show me a single actual GSR to prove it.

As for blaming the valuation company, which is CCC, that can only go so far. I have no doubt that CCC is to be partly blamed for the falsified data, but they are only doing that because they want the business of companies like Farmers. Is it not in CCC's best interest to surrrepticiously modify the vehicle data in such a manner as to result in lower vehicle valuations? If you were an unscrupulous insurance company like Farmers, would you not seek out the valuation company that consistently produces the lowest valuations? So, CCC may be at fault, but Farmers is definitely complicit.

So, give it up already. Farmers is clearly an unethcial company that does not deserve to be in business.

And I'm not sure why you are suggesting otherwise, but I have always acted in a professional manner, in fact much more so than the a$$holes at Farmers have.

-MIKE-

I HAVE AN UPDATE! (and it isn't pretty)

The Insurance Commissioner (IC) finally got back to me, and said Farmers has provided a third valuation which increased their offer by $100, and that there is nothing else they can do since Farmers' valuation is based on market data and standard industry practice.

Well, I knew something was still fishy, so I went through all of the documentation that the IC sent me. After pleading my case with them to get them to understand that they had been hoodwinked by Farmers, they are now sending a new letter to Farmers demanding more information and justification. Here is a summary of what transpired, broken down by issue:



1. The IC asked Farmers why they did not consider any of my comparables. Farmers replied that they all either had performance modifications not present on my vehicle or they could not verify the sales price.

Reality is I presented nearly 20 comparables, and only one had performance modifications. It is highly improbable that Farmers could not verify the sales price of at least a few of them. And even if one did have performance modifications, why could they not just adjust the price like they do with every other vehicle?

So, the IC is now requiring Farmers to provide a detailed explanation for every comparable vehicle I sent Farmers as to why it cannot be considered. I re-sent a copy of the comps to the IC who is forwarding them to Farmers.



2. The IC asked why Farmers was only using a $750 +/- adjustment between the low-end RS/LS models and the GSR model. Farmers replied that their good friends at CCC advised them that the only differences between the RS/LS and the GSR is alloy wheels and a trim package. So they were alloting about $80 for the wheels and about $670 for the trim package.

Reality is that most people do not consider a different engine and transmission (among other things) to be "trim". I sent the IC a complete list of the vehicle specifications, highlighting the numerous engine and mechanical differences. I also asked the IC (toungue in cheek) if they have ever heard of a car being stolen, stripped of its trim package, and dumped on the side of the road. Of course the answer was no. My car was stolen and had its VTEC engine stripped, not its stupid trim package, before being dumped. And that is the most important and valuable difference between the GSR and the low-end RS/LS models.

The IC is now asking Farmers why they only adjusted for wheels and trim, and not for the engine and other mechanical differences, and requiring them to justify (or change) their position.



3. The IC thought that, in responding to their first letter, Farmers had corrected the falsified vehicle models in the valuation. Because Farmers' new valuation resulted in a higher value by $100, the IC had the impression that everything was fixed.

Reality is, however, that all seven of the comparables in Farmers' new valuation were the exact same vehicles used in their previous valuation with the exact same falsifed data. Five of the seven were falsified GSR vehicles. The only thing Farmers did was "shuffle the deck." Farmers removed a few vehicles to arrive at a slightly higher valuation, rearranged the vehicles, and voila - a new valuation that fooled the IC.

After many "I'm sorry that is all we can do" statements from the IC, I finally managed to get them to see that they had been fooled by Farmers. So, they are now requiring Farmers to correct their data. Hopefully the IC will check it this time instead of assuming Farmers is on the up-and-up and telling me "too bad."



Now I have to wait again for another response. The IC says that Farmers has another 30 days to respond, but for some strange reason they think Farmers will respond quickly. Obviously they don't quite get it. I hope I am wrong, but I seriously expect Farmers to take as many of those 30 days as they can. That means more time they can hold onto MY MONEY and more time when they can hope that I'll cave in and give up and take their puny offer, which ain't gonna happen!

Well, that about covers it. So, who wants to stick up for Farmers now?

Another update....

During the response period to the Insurance Commissioner's second inquiry, Farmers hired an independent appraiser, at their cost, to appraise my vehicle. The appraised value is $6,795, a whopping $2,400 or 55% greater than Farmers' original offer. In my opinion it is a reasonable valuation, although a tad on the low side. Now I finally have something I can negotiate with.

According to the Insurance Commissioner (IC), Farmer's has been cited for a code violation. (Not sure which one - in my own research I found 3 code provisions they violated.) While the IC can't take punitive action on the basis of one transgression, it does go in their files and if a trend develops, then the IC lawyers go after Farmers.

So, all you insurance victims out there, make sure you file your complaints with your state's insurance commissioner so they have the data they need to take legal action against unscroupulous insurance companies.

The Farmers Claims Office you were dealing with would be in violation of the fair claims practice Statue for not considering, investigating and responding to each one of your 20 comparables. Shame on the claims rep and their practice of not taking your comparables seriously.

This is usually the result of an overworked or lazy claims rep. It can not be used as an excuse. The CCC Valuation comparables should have been investigated by the claims rep also when you disclosed your dispute. You caught them at their ignorence and good for you. It also puts a black eye on the claims rep and their supervisor for not responding accurately to the IC.

This exact same scenerio happened with me on my 1990 Mercedes Benz but it was with another insurance company. They went from their CCC Value to a few hundred dollars more. I finally got them to increase the value $3500 after they looked at three comparables I found. It took two months to get what I deserved.

My point is, It's not just a Farmers Insurance thing, it is everywhere. The insurance companies are trying to make this claims process a science and not a case by case mutual fair settlement process. I truley believe we need to help any service organization to perform better for us these days. In America, everyone appears to be overworked and/or can't take the time to go above and beyond when duty calls for it. In your case, you gave them that oppotunity and they still blew it. Lesson learned by your claims rep I hope!!!!!!

Oh great, I was just notified by Farmers that my SUV was just totaled. The adjuster is supposed to call me tomorrow. I'm not looking forward to this.

I have worked for a moderately large insurance company for a number of years. I've read a lot of the posts here and I'm really not surprised. There is a Farmers claims center in my city, and there is always an ad for help. They have extremely high turnover. Though they hire college grads, they might hold a degree in most anything...just as long as they have a degree. Several people who now work for my company used to work at Farmers and they say it was a living hell working constantly overworked and understaffed. I think it is that way at a lot of insurance companies. Likely the total loss adjuster you got is a greenie and as a previous post mentioned, they did not bother to do the proper research. If a value is that far off, I would certainly question their figures. The Integra debacle aside, many people erroneously believe their vehicle to be worth far more than it really is, many times due to all the incorrect information out there. If it makes anyone feel any better, Farmers doesn't treat other insurance companies any better. When we subrogate them for a claim they owe, they ALWAYS cut the estimate we submit, or in the case of a total loss, many times they will allege the vehicle in question was not a total loss. It always ends up in arbitration, and we always win. Why they haven't picked up on this is a mystery to me. I guess they'd rather us spend the $40 filing fee to come after them, or maybe they just hope we won't bother. Believe it or not, the company I work for DOES NOT handle claims this way, though it may depend upon your perspective. I was told we want to pay what we owe...not a penny more, not a penny less. FLAadjuster was right...the more info you have, the better off you are. And pay attention out there!

I don't work for an insurance company, but I work WITH many insurance companies in the loss control department of my company. I have to agree with most all of the responses in this forum. Farmers, although not the worst insurance company, is not the best either. We frequently get subrogation demands paid for, but inclued with the payment is a rewritten estimate where the items that are apparently 'not that important' are deleted and then the estimate is short-paid by that amount. It's frustrating to say the least, but with some persistance, we typically get paid. I think that persistance is the key to success with Farmers.

Elman,

I currently work for Farmers and what you say is 100% correct. I work in the dept. that reviews estimates through our system and "chips" the other carrier's estimate. Some of it is justified, although usually it is not. I know also we lose most in arb, especially the property damage estimates. We do win many rental claims however.

One thing that is really getting to me, is how we handle our Insured's rental claims. For instance, our Insured rents a vehicle and then gets in an accident. Lets say Enterprise sends us an estimate for $3500. We "scrub" their estimate in our system. The heck of it is, Enterprise has used discounted rates, parts and charges no taxes. They get (justifily so) angry with us for this and then bill our Insured what we "chipped." Our Insured's then call us as they are being threatened with collections. Upper management has no answers for us to tell our Insured's. Basically, all we can say is that if our Insured pays out we will reimburse them...what?? are you kidding me? I have personally had over 10 insureds telling me they are leaving Farmers because of this.

My son was recently in an accident with a Farmers insured person. His car is old (1991) and unfortuanately it was totaled.

This has been the worst company I have ever dealt with. They have lied from the beginning. First they had a witness that said my son ran a red light (the accident was NOT in an intersection) but some how when I found 2 witnesses their witness disappeared and they were at fault.

Then they totaled the car (over $3k in damages). The first response from Farmers is that the car was worth $1100. They are supposed to be sending me the ads they used. I have already called on one and the ad never existed (yes I have that in writing). I will be calling the other publications also. I have 20 pages of comparable vehicles from across the country and the mean for the car is $2000. The lowest price I found for a car in running condition was $1200 which was 2250 miles away from my home and since I live in CA would probably not pass smog. We were not expecting more then $2K but really it is the principle of it.


I will be sending them a letter and the 20 pages of information I have found. They must give you Fair Market value for a similar car. The laughable part was they took a deduction for a dirty engine in a 16 year old car (sorry I don't steam clean it weekly)

Next stop will be contacting the insurance commissioner. It's only $900 but that's my $900.

Your articles were were very interesting .Your conments about farmers are true .But as some one else said most companies are doing the same With ccc values which are the lowest value yet.And insurance companies love them.I got rearended about a year ago .I had a 1994 dodge caravan .The other parties insurance company called and told me my vechicle was a total loss which I already know because I have been a appraiser for 20 years .there Offer was eight hundred dollars a little short of my estimated value of eighteen hundred .I advised then that I was an appraiser an I had used the nada and the blue book and came up with a value of eighteen hundred I was told they don,t use them books. I advised them that was their choise what they use this is what I use.I was told if I didn,t like it to take them to court .And they would have there attorney there .Well thats what I did.Lucky for me their insured lived in the same town which made it convenient.I went their with my appraisal explained it to the judge in detail and he asked the attourney if she would like to crossexamine she said yes,Her questions were you drinking anything ?Isaid no .Were you eating anything ?I said no .Then she stood their dazed and didn,t know what to say.The judge said thats all .Mr. linen you have persented your case well and I grant you eighteen hundred dollars .I don,t think this insurance company planed on having someone that knew what they were doing.My advice is hire a independent appraiser,Get an appraisal by a licenced appraiser and take them to court with documentation to prove your case.