Under the Insurance Fair Conduct Act (IFCA), your automobile insurance company must settle your vehicle damage claim in good faith. Your insurer must:
- make a good faith effort to communicate with the repair facility of your choice;
- not arbitrarily deny your repair estimate;
- not require you to travel unreasonably to obtain an estimate, repair your car or obtain a loaner car;
- provide you with a copy of the estimate it prepares, or disclose reasons for denying your estimate;
- provide a list of repair facilities within a reasonable distance of your principally garaged area;
- consider any additional (related) damage the repair facility discovers during repairs;
- limit deductions for betterment/depreciation to parts normally subject to repair and replacement during the life of your vehicle;
- not recommend that you make a claim under your own collision coverage, if liability and damages are reasonably clear, solely to avoid paying claims under the liability insurance policy.[i]
If your vehicle is rendered a “total loss” after a collision, then your insurer must follow this established protocol:
- Replacing the loss vehicle: replace your vehicle with a comparable one that is available for inspection within a reasonable distance from where your vehicle is principally garaged.
- Cash settlement: based on the actual cash value of a comparable vehicle.
- Appraisal: resolve appraisal disputes per the policy terms.
- Settlement requirements: When settling a total loss vehicle per subsections (1) through (3) above, the insurer must:
a. communicate its settlement offer to you by phone or in writing;
b. base all offers on itemized and verifiable dollar amounts for vehicles that are currently available, or were available within ninety days of the collision, using appropriate deductions/additions for options, mileage or condition;
c. consider relevant information supplied by you;
d. provide you with a true and accurate copy of any “valuation report;”
e. include all applicable taxes and fees.[ii]
Finally, your insurer shall not refuse to settle any property damage claim under your automobile policy based upon your refusal (or delay) in responding to your insurer’s demand that you submit to an independent medical examination in connection with your Personal Injury Protection (PIP) claim.