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Chris Denmon: Hey, everybody. It’s Chris Denmon in Tampa Bay, Florida, and I’m here today with Mike Rowe. Mike Roe is a diminished value expert, so we’re going to discuss diminished value claims, a property damage claim that many of our auto accident clients are faced with. So as a diminished value expert, what is it that you do? How is it that you help me out? And you do. You help me out.
Mike Rowe: Well, basically, what diminished value is, is the difference in a person’s car just before an accident happened, and just after that vehicle is repaired because even when it’s repaired to the point where you would never know by looking at it that it was in an accident, because it’s been in an accident, it’s not worth the same amount as it was before it was in the accident.
It’s a simple matter of, any of us as automobile consumers would prefer to buy a car that wasn’t in an accident over one that was. We won’t pay as much for a car in an accident, regardless of the fact that it looks right, so my basic role is to establish what that difference in value is so that it can be pursued in the [inaudible] part of the claim.
Chris Denmon: Sure, sure. So I know I come to you, and I have … my client comes to me. They’re in an accident. It’s not their fault that they’re in the accident. Their car has been damaged, often substantially. It’s usually a newer vehicle. The other insurance company fixes their vehicle, or pays to have it fixed, but they know something’s not right. They know they’ve still been screwed by what happened. And they say, listen, I know I can’t sell my car for what I used to be able to sell it for. I know there’s something here. And what you and I know is that there is something there. There’s an actual property damage type of claim that you can pursue in Florida, and that’s the diminished value claim. That’s when my client usually gives you a call.
Mike Rowe: Yes, that’s exactly right, and I would emphasize what you correctly said about the fact that somebody else has to have caused that accident. So if a party were to, say, smash their car into a tree, right? They can’t go back to their own insurance to recover this loss of value to their vehicle.
Chris Denmon: Right, right.
Mike Rowe: It has to be a situation in where someone else caused the accident, and that someone else is insured, has valid insurance. That’s an important part of the situation, and what I basically do is, first of all, I offer a free evaluation. My website is www.resalerecovery.com. I offer a free evaluation which means that I will take a look at the damage appraisal, and that provides the vast majority of the information I need to get an idea of what might this claim be worth, or is it valid? I’ll ask questions of the vehicle, such as was your car in prior accidents and other things that are important to be considered when determining whether or not this claim can be viable.
Through that process, if there appears to be a viable claim, I can actually, as part of that free evaluation say, yeah, not only does it look like you have a good point, I think it’s worth approximately X. Now, if you would like me to go forward and provide an expert opinion, I can do that. And at that point in time, a fee would be incurred, but one of the things I make sure of is that someone isn’t paying for an expert opinion when there isn’t a good potential to recover that money.
Chris Denmon: Why an expert opinion? Why not just go online, look at cars, run online with a search of a vehicle and then just say … for the consumer, the person whose vehicle has been screwed up, why not just do that and then go to the insurance company and chat with them?
Mike Rowe: There are a couple of reasons for that. First and foremost, although from a pre-accident standpoint, in other words, if you were to say what was this car worth before the accident happened? That research, frankly, could be done by pretty much anybody. It’s basically the retail book value of that vehicle prior to the accident. However, when we get into the post-accident situation, now there is no book you can go to. You can’t go online and say, “Show me all the cars for sale that had an accident, and the accident was of this major or that major.” You’re not going to find the data. I’m aware, through my expertise and my involvement in this over the years, of what actually happens when somebody looks to sell a vehicle, and particularity when somebody wants to trade a vehicle in that’s had an accident.
I understand what a dealer does, and how a dealer decides to put a price on that particular vehicle due to the fact that it’s had an accident. Keep in mind that the dealer has a financial interest. They don’t want to pay more in trade for the vehicle that they’re going to get back for it, so they’re very, very mindful of the fact that this has had an accident, and when I gotta sell this, it’s going to be problematic, so I’m only going to give you X. They have a way of going about doing that. I kind of replicate that process, too. So it would just be very hard for someone to do that, and that’s kind of answer number one.
Answer number two is that the law requires that the person presenting the claim, making the claim, bears the duty to prove that claim. So without significant proof, and I’m not saying it has to be an expert, but it’s the most practical way that I can think of to meet that burden. That’s the other place I can come in handy. If you just got newspaper clippings or whatever it is, the insurance company for the person who caused the accident is not going to cooperate. They’re not going to pay the claim, force you to file a suit, and all that gets messy.
Chris Denmon: In general, they tell you to pound sand, is what they do. They say, oh, I don’t see a claim here, go to hell, is what they do, right? And, yeah, and so what you’ll do for us is we build the claim, we present it, but really the big part of what we’re doing is you’re having the expert opinion that we’re attaching to our demand letter to try to settle the diminished value claim with our clients. And a lot of times, most of the time, we get to settle these things without having to file a lawsuit. And a big part of it is because we’re doing the work up front, and we’re making it crystal clear for the insurance adjuster: this is the claim, this is why we have a claim, this is the value of the claim to the penny, see the supporting material from my expert witness who’s been tendered as an expert witness in court. So everyone knows he knows his craft and let’s get this settled so we don’t have to go to court.
Mike Rowe: Yeah, and along those lines, I’m local. I’m here in the Tampa Bay area, St. Pete area. I live in Clearwater. So they know, if they’re forced to go to trial, and that rarely happens, but if they do, I’m going to show up. I’m going to be there. There are experts out there that’ll sell you reports from Cheap Money and they’re out in Ohio, or they’re here or there. Well, the insurance company sees a report from someone like that, they know those people aren’t going to fly out here.
Chris Denmon: Can’t do anything with it.
Mike Rowe: Right, exactly. So when they look at a report from someone like me, and there are other good experts that are out there as well, that are local people, that is what influences them to pay the claim without [inaudible] motion. That’s in the best interests of everybody involved because claims settle much more quickly that way, and with less expense.
Chris Denmon: It’s a fixed fee, right?
Mike Rowe: Yes.n
Chris Denmon: For your services, usually, what? Between three hundred, five hundred bucks? Something like that?
Mike Rowe: Yes, exactly.
Chris Denmon: Depending on the circumstance and then, right, what are you going to do? Fly somebody in for a thousand dollars? It’s just not going to work. Put him up in a hotel room. And insurance companies, they know that.
Mike Rowe: They know. It’s all about what you’re able to present to them in terms of a package. I was on the other side for many years. I spent thirty-some-odd years in the insurance industry. I wrote appraisals on the street in body shops, and I climbed up to the top as the vice-president of claims. We teach claim people on the insurance side to look at that case and say, okay, although we know it’s probably never going to go to trial if it did, how would we stand? And if we feel like we’ve got a good defensible position and the other side has not done the work to prepare the claim, well, what the hell, they’re going to hold the line. That’s how it is. But if they look at that claim and say damn, the ducks are lined up here. They’ve really laid this thing out. We’re going to pay. We’re going to pay more on that case. It absolutely matters.
Chris Denmon: So thirty years on the other side, huh?
Mike Rowe: Thirty years on the other side, and I finally saw the light.
Chris Denmon: So now you take that experience, I mean I know the deal because you’ve been tendered as an expert for me before, but that’s the sort of experience that you have. You know the business on the other side. That’s what enables you to offer the opinions that you’re able to offer.
Mike Rowe: That’s true, and I will add something else because it’s a little bit personal for me. I saw this coming and, in the position I was in, I said, look, we shouldn’t be denying and resisting all of these claims. That didn’t help me a lot in my career. Let’s just put it that way. There’s no question that people deserve this compensation in the right situations. You’ve got a relatively newer vehicle and you’ve had substantial damage done to it, that car is worth a lot less, thousands less. For insurance companies to ignore that, which is exactly what they do because they’re not going to bring it up to you, right?
Chris Denmon: Right.
Mike Rowe: Their body shop isn’t going to tell you. Your agent isn’t going to tell you. I mean, there’s a real effort there to suppress this. It’s part of, hopefully, what we’re doing here today is helping to get the word out to people that they’ve got legitimate claims, and if they are pursued in the proper manner, they can be very, very successful, particularly in Florida because the law is quite favorable.
Chris Denmon: Right. And so if I have injury clients that come in, and they’re hurt, and we’re handling their injury claim and we focus on that. But for some of our clients, especially up front at the beginning, it can be painful for them to say, “I have a car. It’s twenty-five thousand dollars for my car. I have a loan against it that’s, like, twenty-three thousand dollars. I just bought it last year, and now it got wrecked. They fixed it but what am I going to get? Thirteen, fourteen, fifteen thousand dollars for it if I sell it? And that’s a huge differential. And then it’s painful to think I have to keep paying the loan on this car, right? Especially if they don’t have gap insurance, it’s just a big mess. These are real claims. Very real claims. Very valid claims and, like you said, in Florida, the law’s orally on our side to help our clients recover in these cases, man.
Mike Rowe: Right.
Chris Denmon: So being on the inside, anything else? Being on the other side and having that experience, are there any tips? Any things that you picked up that we haven’t chatted about that we should mention?
Mike Rowe: Well, I think that these claims are very difficult for individuals to pursue on their own. Insurance companies just don’t take individuals seriously because they know individuals can’t mount the kind of legal activity and know the law and procedures, and so forth. So when an individual comes up against an insurance company, the tendency is just to stonewall. As an insider, I know you’re better off being represented. And even though it involves a contingency fee, there is no question in my mind that people will end up with more money in their pocket, and they’ll get it quite a bit sooner with an attorney than without an attorney. It shouldn’t be that way, but it is that way.
One other thing I would like to say because there’s a safety aspect to this which is that today’s cars are predominately unibody constructed, which means rather than the old full steel frame that they used to have where cars would just collide and have all kinds of passengers bouncing around and so forth, the unibody car was constructed to remove that big steel frame and, instead, to just weld the critical panels together to form a semi-frame, which is why they use the term unibody. The panels are welded together. That lightened the vehicles and allowed the gas mileage to improve substantially. It was one of the main reasons. But, in addition, an opportunity was taken by the automobile engineers to engineer safety, meaning they actually designed these frames to collapse in a controlled way to control the energy reaction to protect the passengers in the vehicle.
It absolutely has worked because injury severities have come down substantially as a result of it. But the problem is, is that although a body shop, where a unibody is compromised, although the body shop can pull it back into factory tolerances, what is left, though, is a weakness in the metal that, a) cannot be measured, and b) can never be corrected. The vehicle, after the unibody work, is not the same as it was before. All of us are afraid of touching the paneled frame in the unibody damage.
So there’s a reason to be concerned because if that vehicle were to be in a second accident in the same area, there’s no guarantee as to how the unibody would respond in that situation. That’s something people really should be aware of. Many, many times those vehicles have wheel alignment problems and all kinds of issues going forward, which is the reason they are stigmatized so much, and why, if you happen to have a vehicle, and you were in an accident, and the unibody was compromised, you’d have a very difficult time trading that vehicle to get any money for it. And that’s not fair. When you bought that car, you didn’t go out to buy a car that had unibody damage and was in a serious collision, so you are certainly not made whole, which is the purpose of insurance, simply because the vehicle was fixed, and it looks good. That’s just not enough. That’s the message, I think.
Chris Denmon: Absolutely. Cool, man. Well, Mike, thank you much, man. I appreciate it.
Mike Rowe: It’s a pleasure working with you, sir.