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Bad Faith & Automated Claim Adjustment Software: Proving, Disputing Systematic Undervaluation of Damaged Vehicles

Recording of a 90-minute CLE video webinar with Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Conducted on Thursday, August 15, 2024

Recorded event now available

or call 1-800-926-7926

This CLE webinar will discuss proving or defending bad faith claims based on the use of algorithms or "insurtech" to establish totaled vehicle valuation. The panel will review potential claims as well as recent cases raising these issues.

Description

Generally speaking, if the cost to repair a damaged vehicle is greater than its "actual cash value" the insurer must replace the vehicle or pay the actual cost to purchase a comparable one. As more and increasingly advanced, sensitive, and integrated technologies have been incorporated into personal and commercial vehicles of all types, the cost of repairs has skyrocketed, so owners are more frequently being offered a cash value.

There continues to be controversy over what factors should be considered in determining cash value. But in recent years, insurers have begun using new types of data, new processes--namely algorithms--and applying new deductions, all of which policyholders contend are not only unsubstantiated, but designed and applied in bad faith to undervalue their claims.

Policyholders continue to challenge the validity of the data being used in algorithms and the reliability of the algorithms themselves. Requests about the software and algorithms often result in heated discovery disputes.

Listen as this experienced panel discusses proving or defending bad faith claims based on the use of algorithms or "insurtech" to establish totaled vehicle value.

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Outline

  1. Components of actual cash value for vehicles
    1. Replacement
    2. Fair market value
    3. Broad evidence rule
  2. Software examples
    1. CCC Information Services
    2. Work Center Total Loss (WCTL)
    3. JD Power and Mitchell International
    4. Audatex
  3. Challenging the accuracy and reliability of software
    1. Applying state formula for ACV
    2. Types data in the data base
    3. Use of negotiation deductions

Benefits

The panel will review these and other key issues:

  • What damages are available for inaccurate cash value offer?
  • On what basis can insurers claim that reductions of advertised prices are typical in a particular market? Do such deductions violate state laws?
  • How can policyholders discover what algorithms are being used to calculate value?
  • Do algorithms used to generate actual cash value have to pass muster under Daubert and FRE 702?
  • Can insurers incorporate data about the policyholder's price elasticity and willingness to settle in determining the claim's "reasonable value"?

Faculty

Couch, Alex
Alex Couch
Managing Attorney
Normand

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Irvin, Andrew
Andrew Irvin
Managing Partner
Irvin & Irvin

Mr. Irvin earned a bachelor's degree in finance from the University of Central Florida in 2008 and...  |  Read More

Kirsch, Ashton
Ashton T. Kirsch
Shareholder
Matthiesen, Wickert & Lehrer

Mr. Kirsch is an insurance litigation attorney and shareholder with the law firm of Matthiesen, Wickert & Lehrer,...  |  Read More

Smith, Shannon
Shannon Smith
Owner
Shannon Smith's Auto Appraisals, Estimates

Owner at Shannon Smith's Auto Appraisals, Estimates, LLC

 |  Read More

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