Auto-Owners total-loss offers in Florida: how the appraisal clause works

Florida regulates first-party automobile total losses through three layered authorities: the valuation methods at Fla. Stat. § 626.9743, the unfair-claim-practices regime at § 626.9541, and the civil-remedy bad-faith statute at § 624.155. § 626.9743 — Claim Settlement Practices Relating to Motor Vehicle Insurance. Subsection (5) governs first-party total losses and requires the insurer to use one of the following methods: (5)(a) The insurer may elect a cash settlement based upon the actual cost to purchase a comparable motor vehicle, including sales tax. That cost may be derived from: 1. when comparable motor vehicles are available in the local market area, the cost of two or more such comparable motor vehicles available within the preceding 90 days; 2. the retail cost as determined from a generally recognized used motor vehicle industry source; or 3. the retail cost using two or more quotations obtained by the insurer from two or more licensed dealers in the local market area. (5)(b) The insurer may elect to offer a replacement motor vehicle that is a specified comparable motor vehicle available to the insured, including sales tax, paid for by the insurer at no cost other than any deductible and any betterment. The offer must be documented in the insurer's claim file. A comparable motor vehicle is one made by the same manufacturer, of the same or newer model year, of similar body type, with similar options and mileage as the insured vehicle. A comparable motor vehicle 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. (5)(c) When a motor vehicle total loss is adjusted or settled on a basis that varies from paragraph (a) or paragraph (b), the determination of value must be supported by documentation, and any deductions from value must be itemized and specified in appropriate dollar amounts. The basis for such settlement shall be explained to the claimant in writing, if requested, and a copy of the explanation shall be retained in the insurer's claim file. (5)(d) Any other method agreed to by the claimant. § 626.9541(1)(i) — Unfair Claim Settlement Practices. Among other things, when committed or performed with such frequency as to indicate a general business practice, an insurer commits an unfair claim settlement practice when it: misrepresents pertinent facts or insurance policy provisions relating to coverages at issue; fails to acknowledge and act promptly upon communications with respect to claims; denies claims without conducting reasonable investigations based upon available information; or fails to affirm or deny full or partial coverage of claims, or to provide a written statement that the claim is being investigated, upon the written request of the insured within 30 days after proof-of-loss statements have been completed. § 624.155 — Civil Remedy. Florida policyholders harmed by an insurer's bad-faith claim handling may pursue a civil-remedy cause of action under § 624.155, which incorporates § 626.9541 violations and allows recovery of damages caused by the violation, including in some cases the excess judgment, plus court costs and reasonable attorney's fees. Under § 624.155(3), the policyholder must first serve a Civil Remedy Notice on the Department of Financial Services and the insurer, and the insurer has 60 days to cure. Florida's total-loss provisions in Fla. Stat. § 319.30(3)(a) operate in two parts: under 1.a., for an insured vehicle, a "total loss" occurs when the insurer pays the owner to replace the vehicle with one of like kind and quality (or pays on theft) — i.e., the insurer-decides standard applies; and under 1.b., for an uninsured motor vehicle, a "total loss" occurs when the cost of repairing or rebuilding the vehicle is 80% or more of the cost of replacing the vehicle with one of like kind and quality. Section 319.30(3)(a)2. provides that a vehicle the insurance company and owner agree to repair is not a "total loss"; if the actual repair cost to the insurer exceeds 100% of the replacement cost, the owner must ask the department to brand the title "Total Loss Vehicle." The comparator is replacement cost (not ACV).