DISCLAIMER: All information in this post represents my opinion. Any reference to legal matters should not be considered legal advice.
TL;DR:
119 days from collision to return of vehicle.
492 days from collision to receipt of Diminished Value payment (as a result of mediation after filing lawsuit).
Insurance refused to negotiate DV in good faith.
After lawyer and court fees, still walked away with higher payment than any insurance offer but lower than my initial negotiations floor.
Try having the vehicle totaled from the start by reminding the adjuster of the repair costs, rental reimbursements and diminished value pay out of a vehicle repair.
Research your DV appraiser before hiring/paying.
Check if the DV appraiser has legal contacts you can reach out to.
Intro
Below is my direct experience as it relates to a 2015 Tesla Model S 85D involved in a collision in Houston TX.
I try to cover the scope and timeline of the repair process, the diminished value (DV) process and legal proceedings following repairs.
Feel free to ask questions, as this is a condensed post/timeline (even if it doesn't feel like it!).
As a h/t to Hot Fuzz, I refer to the incident as a collision, because "accident implies no one is to blame".
Collision
On Fri08Jun2018 during my morning commute, a car failed to yield and turned left in front of me, causing a collision with my front end and her front passenger wheel. My speed at time of impact was likely in the 20 mph range (brakes applied before&up-to impact). Two airbags in the Tesla (steering wheel and driver knee/leg) deployed rendering vehicle undrivable. No injuries. Tesla detected the impact, disabled the vehicle, called my cell to confirm everyone was ok, and sent a list of approved body shops to my email. The Tesla was towed to a lot, pending insurance liablity decision (the other driver had insurance with company named Germania Insurance). Other driver was ticketed at the scene.
On Wed13Jun (+005 days), insurance company accepted liability. Of the three Tesla approved shops, we agreed to send the vehicle to the largest of the three (Service King). They agreed to provide a rental, but only through Enterprise (their preferred) or rolling the on-my-own rental I had made in the interim at Hertz if Hertz would accept the max Enterprise rate of $29.99 a day. They offered to reimburse my two days of personal rental. Hertz agreed to move the rental to the insurance system. At this point we were expecting a totaled vehicle.
On Fri15Jun (+007 days), the Model S arrived at the correct "severe" service shop (was incorrectly towed previous day to a "minor damage" service shop).
On Mon18Jun (+010 days), assigned a repair service advisor and work authorization signed.
On Fri22Jun (+014 days), the estimate was available from the shop: $15k in repairs. Changed expectations from totaled vehicle to repair of vehicle.
On Mon25Jun (+017 days), insurance representative traveled to view vehicle.
On Tue03Jul (+025 days), insurance approved a modified estimate replacing OEM headlamps with refurbs. I was not notified of the change. Shop ordered all parts as listed on the approved estimate. HID headlamps were the single most expensive part on estimate.
Total time from collision to insurance approved estimate: 25 days
Repairs
On Mon09Jul (+031 days), emailed advisor asking status of estimate. Told of headlamp swap, approval and ordering of parts. Requested switch back to OEM, told "we've ordered the parts, unless there is something wrong with them we can't return them". Mentioned this was in violation of the TX Dept of Insurance (TDI) Consumer Bill of Rights Item 27 (Choice of Repair Shop and Replacement Parts) and was concerned about premature yellowing of the HID headlamps, told there was nothing I can do. OEM headlights never ordered. Contacted TDI, told "unless this is a claim with your own insurance company, we cannot help, you have to resolve in the courts".
On Fri27Jul (+049 days), all parts received except grill and frame (pre-refresh vehicle), airbags, airbag switch and 12v battery.
On Thu09Aug (+062 days), all external repairs completed and car painted; waiting on 12v battery, airbags and airbag switch.
On Fri31Aug (+084 days), car moved to Service Center for 12v battery, airbag programming and brake booster replacement (issue discovered during shop test drive).
On Tue18Sep (+102 days), car returned to repair shop awaiting final part (battery disconnect switch).
On Wed03Oct (+117 days), following an incorrect switch being delivered, the correct switch arrived, vehicle in final checkout.
On Fri05Oct (+119 days), pick up repaired vehicle from shop. Final invoice of $18k, an increase of 20% over initial estimate.
Total time from approved estimate to repaired: 94 days
Total time from collision to repaired: 119 days
Diminished Value Negotiations
Week of 22Oct (+136 days), contacted adjuster for DV. Told "a vehicle with previous damage is not eligible for DV" (for a pre-existing paint scrape above the passenger wheel well; I had Service King repair it at the same time as collision repairs). I cited the difference in magnitude of repair costs ($300 for the scrape vs $18k final repair bill), told to reach out to an adjuster manager with DV experience.
Week of 29Oct (+143 days), contacted adjuster manager. Offered $2000. Countered with "this should be $6000 minimum" based on a pre-collision guess of $60k actual cash value (ACV) and online research for a DV thumb-to-the-wind "10% minor, 20% significant, 30% severe of ACV". Told "we are worlds apart, we will never get there".
Week of 13Nov (+158 days), searched TMC posts and reach out to TMC members. Saw multiple recommendations for Petty Details, who had helped in both insurance negotiation and lawsuit situations.
On Wed05Dec (+180 days), received appraisal from Petty Details (two days after paying) for approx $17,800* in DV. NOTE: Petty Details provided two reports; he issued a rev'd appraisal after finding an error in comparables. The final report was $14,800.
On Mon10Dec (+185 days), emailed DV appraisal to Germania.
On Tue18Dec (+193 days), Germania answered "we've now increased our offer, best and final, $2500." (15% of the emailed DV appraisal)
Petty Details was able to provide an area attorney he had worked with in the past. I reached out and consulted his opinion on pursing a case, his experience, etc. Also discussed with family/friends over the holidays if the hassle of a lawsuit was worth the risk of a higher (or negative, after legal fees!) payout than the Germania offer.
On Mon14Jan2019 (+220 days), sign with attorney. The CarFax for the Model S was updated to show an accident with airbag deployment in its history, so we decided we would not accept a lowball offer of $2500.
Total time from vehicle pick-up to signing with attorney: 101 days
Total time from collision to signing with attorney: 220 days
NOTE: All following references to Germania can be considered as "Germania and its contracted legal team". Communications at this point were restricted to my lawyer and the lawyer assigned the case by Germania's contracted legal firm in HOU.
Lawsuit / Mediation
On Tue05Feb (+242 days), filed tort lawsuit in Harris County civil court seeking DV and Loss of Use (LOU). Because the amount sought was over $10k, small claims court (known as Justice Court in TX) was not an option. In TX, the lawsuit must be filed against the driver and not the driver's insurance company. DV damages calculated using Petty Details appraisal; Loss of Use damages calculated using Enterprise Exotic's Tesla Model S rental rate of $1800 per week for 17 weeks, less $29.99 daily rental cost already paid by Germania. Because case was in county court, discovery was allowed.
On Mon08Apr (+304 days), a settlement offer of $4500 came from Germania, based on a DV appraisal from Houston Auto Appraisers. We declined and sought a deposition of the appraiser given our opinion of the appraisal report being of low quality.
On Fri10May (+336 days), case assigned trial date and a court-appointed mediator named. Unfortunately, the mediator had a history acting as counsel for Germania in previous cases, so a new mediator was sought.
On Tue11Jun (+368 days), deposition of Houston Auto Appraisers' Roy Bent Jr by plaintiffs occured.
On Tue16Jul (+403 days), deposition of Petty Details' Justin Petty by defense occured.
On Fri26Jul (+413 days), deposition of the plaintiff (me) by the defense scheduled but did not occur - opposing counsel failed to schedule or confirm a court reporter for the session (all other parties had arrived). Quote from my lawyer - "in my 30 years of practice, this is unprecedented."
On Fri02Aug (+420 days), half-day mediation with a new mediator occured. Settled at $13000. Germania held steadfast no loss of use was owed (not even the fuel for an ICE rental vs electricity costs) and $4500 was a fair DV appraisal, i.e. they felt they were overpaying by $8500. Settlement agreement dictated the release paperwork and payment to be provided to our lawyer in 21 days.
Why did we accept a settlement much less than our initial filing? Factors and risks related to the TX courts.
A) The presence/absence of insurance is not admissable. All references to the insurance company cannot be made in court.
B) The ticket from the traffic collision was resolved with defensive driving; it was not admissable (meaning the defense could argue about liability).
C) The jury pool was Harris County (containing the city of Houston), a large and diverse county. HOU is the largest truck/SUV market in the US by % of sales. HOU is a Big Oil city. Would the jury of six people be filled with luxury vehicle drivers who could sympathize? Filled with pickup/SUV drivers or oil workers who enjoy punishing EV drivers? Civic/Corolla drivers who balk at DV and LOU claims with a $ value higher than their car's value? (I have coworkers who fit each of these categories!)
D) Mediation revealed the defense's strategy to pitch the case to the jury as "greedy entitled millenials vs sympathetic divorced middle-aged mother" given absence of insurance or police ticket references.
E) Proceeding to trial would incur additional fees. Filing to strike the opposing expert witness, subpoenaing Tesla to testify about their trade-in valuation process (as part of discrediting the expert witness' deposition testimony), potential depositions of new expert witnesses, etc.
F) Proceeding to trial could have work and home impacts. How many days off work to attend trial (and what tasks would be impacted); would court adjourn in time to get kids from daycare; would slips in court docket lead to schedule/travel conflicts; etc.
G) The settlement was 87% of DV appraisal. Proceeding to trial would be beneficial ONLY if we thought we could get LOU awarded by a jury. The defense had stated at mediation they would move for partial summary judgment of $0 on the LOU claim. What is the judge's background/viewpoints** on such claims? If the judge did allow the LOU claim to come forward, what would a jury award? TX court precedent allows recovering the "reasonable rental cost of a substitute vehicle". I could not find a TX precedent for defining "reasonable", although several other US states have court opinions saying "similar vehicle". Would that legal argument hold sway with this court/jury? The most likely grounds of appeal for insurance to pursue.
H) If a jury awarded the full judgment, we were told by the mediator to expect an automatic appeal by the defense/insurance given the large value.
I) If a jury awarded the full judgment and the judgment withstood appeals, we would need to employ our own insurance policy's Underinsured Motorist coverage, as the judgment would exceed the property damage liability coverage of the other driver. What unexpected issues would pop up?
**NOTE: We did not have insight into the judge's viewpoints, because the judge assigned to the court changed. A wild side story - the original judge accidentally resigned himself, asked the county commission to keep him in the position until a special election could be held, but instead a new judge (with no bench experience/history) was appointed with only 30 min from public submission to commissioner vote.
Total time from case filing to settlement agreement: 178 days
Total time from collision to settlement agreement: 420 days
Breach of Settlement
On Wed21Aug (+439 days), release paperwork from Germania received by our lawyer for review (but not payment as required per settlement agreement).
On Mon09Sep (+455 days), discussed Germania's breach of the settlement agreement by failing to provide payment (for hold in our lawyer's trust account until release was signed). After debating whether to resume the original tort lawsuit due to the breach, contacted Germania reminding of payment due.
On Fri13Sep (+459 days), Germania refused to honor settlement agreement, resorted to name-calling in communications with our lawyer, and requested mediator become involved again for review of releases and processing of payments.
On Fri20Sep (+466 days), revised/reviewed/agreed release documents available. We were away from home and unable to notarize/return.
On Tue01Oct (+477 days), able to sign/notarize release forms.
On Mon07Oct (+483 days), suit dismissal processed by court.
On Wed16Oct (+492 days), funds remaining after lawyer and court fees deposited.
Mindset after the breach of settlement by the defense by not providing the settlement payment within 21 days:
A) We could have been released from this settlement and proceeded with the original tort lawsuit, but the breach would not be admissible (we'd be facing the same circumstances as before mediation).
B) To make reference to the breached settlement, the original filing would have to be amended to include a charge of fraud. The burden of proof would be showing the defense had no intention of paying at the time of signing the agreement. Could we prove this?
C) The defense breached the settlement agreement by not paying in time, so I would expect a similar tactic for a court judgment owed, meaning more legals fees to enforce payment.
Total time from settlement agreement to funds received: 72 days
Total time from collision to settlement funds received: 492 days
Takeaways / Recommendations
(REMINDER: This post and all information contained is my opinion/experience. I am not an attorney. Consult your own legal counsel.)
If I had it to do over again, I would...
A) contact my insurance demanding they total the vehicle and seek subrogation, so I am out of a car less than a week and eventually get my deductible back. If that failed...
B) contact other insurance demanding they provide a Tesla rental while prepping to total vehicle. If that failed...
C) after liability accepted and estimate available, demand total of vehicle, using 90-day repair estimate, Tesla rental estimate and 20/30% DV estimate. Have legal contact on hand to mention upfront the pursuit of Loss of Use and DV if vehicle not totaled or Tesla not provided.
...but I don't think any of those actions would have changed the course of events in my specific case of dealing with Germania.
Here were the "tricks" used by Germania and/or its contracted legal firm I experienced that you should prepare for from other insurance companies:
Delay accepting liability
Delay delivering & inspecting vehicle
Refusal of >$30 daily rental rate
OEM parts swapped with refurb without consent
Initial denial of DV
Unrealistic/lowball DV offer after disputing denial of DV
Dismissal of professional DV appraisal report and continued unrealistic/lowball DV offer
Upheld use of DV appraiser despite poor deposition/testimony (we would have filed a motion to strike the expert witness and were very comfortable of succeeding in that action)
Scheduled my deposition solely to inconvenience me (time off work, ~125 miles traveled)...I can't prove this, but subsequent actions show this deposition was unnecessary
Bad faith mediation (increased settlement offers in increments of 1% lawsuit value)
Breached settlement agreement (did not provide payment in time, openly disputed the wording of the agreement they signed)
Collision to return of the vehicle for me was 4 months, with 1 month being delays by insurance and 3 months being Tesla parts holdups.
I went from immediately thinking I'd be buying a new car (the airbags went off!), to nearly 500 days of quagmire.
I erred (not legally, but practically) by not demanding a Tesla immediately when they accepted liability, and not re-demanding when it shifted from total to repair situation.
DO: Check with your insurance if a claim with your policy and subrogation is an option. My company said "if you don't have rental we won't subrogate any rental costs. If you do have rental we would only subrogate to the max of your policy, and I don't know if you'd get DV or further loss of use through subrogation". YMMV.
DO: Check-in daily between an estimate being available, the estimate being approved and parts being ordered to try and avoid any refurb parts being snuck in.
DO: Have proof of denial of a Tesla rental vehicle from the insurance company (via written confirmation or verbal recording). The absence of this evidence will prompt insurance to claim "no loss of use is owed because no request for a Tesla was made". This was a factor in my situation - I never asked because I knew the answer was no (they disclosed their cap of $29.99 a day, regardless of company), but didn't know in June 2018 I would have to prove their refusal in Aug 2019. This was an area we did not know how the judge/jury would rule.
DO: Consider Petty Details for a DV appraisal.
DO: Consider Service King. The parts manager decision to order without confirming was an issue, but the service adviser was helpful, receptive to communication and went out of his way to stay after-hours so I could pick up the car (the shop was 55 miles away).
DO: Maintain fuel receipts and electric bills, in the event the insurance company will consider fuel reimbursement if they don't provide an EV rental. Germania claimed "we've never faced this possibility before", and then proceeded to deny it.
DON'T: Use logical thought. Insurance companies will act (in lawyers' words) illogically.
DON'T: Rent a Tesla out of pocket because you think you have to. The TX courts have precedent that you do not HAVE to have paid for a rental to seek loss of use. The questionable aspect of my case was if you accept a rental that is not a Tesla, will the difference in loss of use be awarded.
DON'T: Consider Houston Auto Appraisers (or any company that cites the IACP or BOCAA appraisal standards) for a DV appraisal. The deposition of the owner of Houston Auto Appraisers lasted over three (3) hours and did not reflect well upon the quality of his work.
DON'T: Expect a timely resolution.
DON'T: Expect a totaled vehicle just from airbag deployment. States set the threshold % of car actual cash value the repair cost must exceed for the car to be totaled. For TX, the threshold is 100% (a common threshold is 75% or 80%).
DON'T: Do business with Germania Insurance. They unnecessarily spent an extra $10k+ on this case and I still walked away with more than any pre-mediation offer but we both would have been better off had they negotiated in good faith at the start.
TX Legal Cases of Note:
Mondragon v Austin - do not need to have out-of-pocket expenses to claim loss of use, i.e. your financial ability to rent/not rent a Tesla during repairs should not factor in whether you are owed loss of use
Luna v North Star Dodge - "reasonable rental cost of substitute vehicle" and "period deprived of use of the vehicle" is reasonable estimate of loss of use damages
Metro Ford Truck Sales v Davis - loss of use damages CAN exceed total actual cash value of property damaged
