Can Insurance Company Enforce Arbitration Clause After Acting In Bad Faith
Hi,
We had a total loss collision claim.
We were paying premiums for collision & comp. coverage Our vehicle had a cash value of $14k. After the accident the insurance company says the car has a rebuilt salvage title in Illinois. My car is worrth only $8600. My Oregon title is clean. I spent weeks contacting every agency in Illinois, trying to find out about the salvage title in Illinois, and not in Oregon.The Insurance company checks with Oregon DMV to find out why I have a clear title in oregon on a salvage/rebuilt title in Illinois, Oregon DMV said opps our mistake, and says send them back the clean title so they can issue a correct one. "free of charge". The insurance company finds records that the car had it's right side damaged deeming it a total loss, and was sold in a salvage auction in Illinois for $4650.
We were charged premiums to insure our good title and our $14k vehicle. Insurance company says car is worth $8600, and that they would have insured it even if we had known about the title history, and the premiums would have been the same.
I don't know of any insurance companies that offer collision coverage on a prior salvaged vehicle, and there is a difference in the costs of collision coverage between a car valued at $14k and $8600.
I want to take legal action against them, but my policy has an arbitration before legal action clause. Does this pertain only to disputes on the claim settlement? Will they be able to force arbitration if I file legal action? I live in Oregon.
Re: Can Insurance Company Enforce Arbitration Clause After Acting In Bad Faith
Where did you purchase the car? How long ago? Who sold it to you - an individual or a car dealer? Was that seller the person who purchased the car at the Illinois auction?
It doesn't matter whether or not the title was correct in Oregon. The actual value of the car would be accurately gauged on the fact that it should have been issued a salvage title. Oregon's clerical error doesn't change that.
If the arbitration is over the value of the car, you need to try to find proof that the a similar car with a salvage title is worth more than the amount they have offered.
In terms of premiums, with collision coverage the premiums are often based largely upon the cost of repair as opposed to replacement value, so it is very possible that the premiums would have been very similar or even the same had the insurance company known that the car had been salvaged. To the extent that there might otherwise be a difference, the suspicious quality of a car that has been reconstructed after salvage may warrant an increase in the premium due to the greater risk involved with insuring the vehicle.
Try to get some price quotes from insurance companies, preferably this one but if necessary from others, for the car at issue with and without a salvage title. That's really the only way to know if you would actually have been charged a lower premium.