collectdiminishedvalue.com

“I don’t see a lot of inconsistency [with State Farm’s position on diminished value]”, said Dick Luedke, media relations expert for insurance giant, State Farm. “The bottom line is that whatever our position on diminished value is, auto insurance policies don’t generally cover claims for diminished value…In most instances, skilled repairers can restore a vehicle to its preaccident condition and market value.”Hogwash! I thought to myself. I knew Dick Luedke knew better than that, and I suspected that he knew I knew he was just preaching the party line. Understanding he was just playing around with words to sidestep uncomfortable facts as media people so often do using oratory skills that make crafty politicians envious, I knew I had to ask pointed and direct questions to get to him.

“What does State Farm consider to be preaccient condition? If we had a metallurgist take a look at a crashed vehicle that has been repaired, I am certain he would find metal fatigue [and other similar conditions that would result in a weakening of the structure]. Are you saying this damage can be restored as well?” I asked.

“I don’t understand the intricacies of the stability of metal,” confessed Luedke. “So, I’m not the guy that can answer that for you.”

“But at the same time you are telling me you have repairers that can fix that kind of thing?” I queried.

Luedke responded, “I’m telling you that is our company’s position,” referring to State Farm’s contention that inherent diminished value doesn’t exist.

Is metal fatigue taken into consideration in State’Farm’s position?” I asked.

To my surprise Luedke answered quickly, perhaps too quickly,“I’m sure it is.”

When one discusses diminished value with insurance company personnel it always makes for interesting conversation, partly because insurers are usually talking so far over their heads that they often don’t make sense. And more notably, because the party line they hold is so skewed and inconsistent it is nearly a joke. Let’s face it, it’s hard to defend a wrong or inconsistent position for a long period of time. Moments earlier in the conversation Luedke played dumb about the loss of factory transferable warranty coverage that accompanies crash damage, coming across as if it were the first time he ever heard of consumers losing the benefit of the warranty they paid for as part of the sticker price on a car.

But it wasn’t warranty I really wanted to discuss. It was an obvious inconsistency in State Farm’s position on diminished value that prompted my most recent inquiry days earlier. Does State Farm believe diminished value is a rare occurrence or an everyday occurrence? Even if Dick Luedke can’t, or rather chooses not to see State Farm’s inconsistent statements regarding the frequency with which diminished value claims occur, I’m certain the discrepancies will stand out to you, just as they did to me, as you read my e-mail to the insurer in the paragraphs that follow:

To State Farm Media RepresentativeI noticed what appeared to be conflicting information while researching a story regarding diminished value, and wanted to get State Farm’s exact position on the matter.As noted on its website, “State Farm believes a properly repaired vehicle does not automatically lose market value simply because it has been in an accident. In most instances, skilled repairers can restore a vehicle to its pre-accident condition and market value. Sometimes, where repairs are not properly done, a vehicle might lose some value”…”State Farm does not believe in the existence of “inherent” diminished value…”

But testimony and documents provided in the 2001 Mabry case in GA seem to contradict State Farm’s present position, a position it has held for a number of years. Supreme Court Justice Robert Benham wrote the following November 28, 2001: “… The first question, whether diminution in value occurs even when physical damage is properly repaired, is one of fact. The trial court found that there is a potential for a diminution in value loss in every event of loss, and that diminution in value can occur even when a vehicle is repaired properly. In support of those findings, the trial court relied primarily upon documents produced by State Farm during discovery and upon the testimony of State Farm’s witnesses. The documents from State Farm acknowledged that there is a common perception that a wrecked vehicle is worth less simply because it has been wrecked. Witnesses for State Farm testified that a potential for diminution in value exists in every automobile accident, and that the public perceives a loss of value in any wrecked vehicle and would choose an unwrecked vehicle over a wrecked one, assuming the vehicles are otherwise the same …”
(emphasis added)

It seems on State Farm’s website every effort is made to downplay the legitimacy of diminished value claims and the frequency with which a car may lose value following an accident and repair, even in third party cases. With that said:

Since the testimony of State Farm’s witnesses and documents it produced seem to contradict its written position regarding diminished value as posted on its website, which is correct? If its position on the website is deemed accurate, then its witnesses must have lied to the court…

Again, Luedke felt there was nothing to clear up because, according to him, no inconsistency exists in State Farm’s diminished value position. But, I’m betting you see the night and day difference as easily as I see it.

If State Farm has enough evidence in its files and enough knowledge among its employees to convince the Georgia Supreme Court to make it pay diminished value in both first and third-party cases when it was trying its best to refrain from paying, why would it be allowed to promote another position completely contrary to that truth on its website and in claims propaganda and word tracks it dumps on unknowledgeable consumers in nearly every other state? Shouldn’t there be some accountability for this inconsistent message when consumers so often rely on their insurer to look after their best interests and give them straight facts?

Oh! I almost forgot one hilarious detail. After sending the e-mail addressed to State farm Media Representative and getting no response for ten days, I sent another exact copy specifically addressed to Dick Luedke. What I got back was an e-mail that was supposed to go to Luedke’s supervisor asking, “Should this get a response?”

Luedke, immediately noticing his error, sent me another e-mail stating:

“Sorry David - I meant to forward to my supervisor to find out if we respond or forward to another department. I am new to checking this email box. My sincere apologies! After my supervisor responds to my question - He’ll find someone to answer your concerns or it may end up in a different dept.”

No apology needed, Mr Luedke. I suppose checking e-mail can be a pretty daunting and overwhelming task considering the complexity and newness of it all - which begs another question: Should insurers that can’t even understand simple e-mail be responding to the more complicated issues surrounding diminished value and auto repair safety?

Tell us what you think.