Legal Question in Insurance Law in Oregon

Re: Vehicle Insurance

I'm afraid your situation is all too common, and it shouldn't be, if insurance agents explained the coverage they sell a little better.

Fair Market Value -- "FMV" -- is just the price that a willing buyer would pay a willing seller, in an ordinary, arms-length transaction, for that same car, without the wreck, and at that general time and region. That doesn't mean the highest "sucker price" you could get, nor is it a "sweetheart deal" you might take for someone you know. How the insurance companies CALCULATE the FMV is the heart of the problem, as well as the cure.

The insurers use various "services" that scour the papers for similar cars in the ads, and then they call to find out what the car actually sold for. YOU should do the same, but you don't have to look up old ads, just use current ones. Don't worry about the precise DATE of the ads, if the accident was relatively recent.

Look for ads for the same or very similar car in your Sunday newspaper, your "Nickel Ads" or "Pennysaver" papers, and the like. You can look in car lots, too, but keep track of those contacts, and call each ad, and cut out and SAVE the ad. Put your phone call notes next to the ad. When you call each dealer or seller, you want to find out the basics so you can later COMPARE IT to yours. Ask about MILEAGE, CONDITION AND OPTIONS. See what they're asking, and what they'll actually take. That's all FMV is.

After you call a half-dozen or so of the ads, you'll probably start to get a sense of what the likley FMV is of your car. You may not get an EXACT match, and that one could be for whatever reason artificially high or low, so get a bunch of comparables.

But YES, if the FMV is LESS than your loan, you could owe money -- that's known as being "UPSIDE DOWN" on your car loan, where the car is worth less than the amount owed. For future reference, your protection against this situation is "GAP" insurance. It pays for the value in that gap, between what's OWED and the FMV.

So, the short answer is that you need to find as many comparable cars locally or regionally that are selling on the high side, IF they're reasonably comparable, and get the info to the adjuster dealing with this.

Presuming this is an issue with your OWN insurer, then note that you probably have an ARBITRATION provision in your policy, which is ultimately how these disputes can be settled.

And, good luck!

Sam