Releasing a 'totaled' vehicle prior to insurance settlement

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Candice Morgan said an insurance company wanted her to released her damaged truck before getting a settlement. (Source: CBS 5) Candice Morgan said an insurance company wanted her to released her damaged truck before getting a settlement. (Source: CBS 5)
Morgan says a red car belonging to another tenant had plowed into her parked truck. (Source: CBS 5) Morgan says a red car belonging to another tenant had plowed into her parked truck. (Source: CBS 5)
But Morgan says the insurer wanted her to release the truck to their salvage yard right away. (Source: CBS 5) But Morgan says the insurer wanted her to release the truck to their salvage yard right away. (Source: CBS 5)
PHOENIX (3TV/CBS 5) -

A Phoenix woman says she's been without a vehicle for two months over an insurance settlement delay and the insurer wants her to turn over possession of her vehicle prematurely.

When you get into a bad car accident, the insurer may declare your vehicle a total loss. If the other guy is at fault, it's fine to let their insurer handle the claim - as long as it's convenient for you. But what if their insurer wants you to release the vehicle to them before they make a settlement offer?

Early one morning, there was a commotion inside a Phoenix apartment complex. Tenant Candice Morgan says a red car belonging to another tenant had plowed into her parked truck.

"She was coming around the curve so fast that she hit my car, went under the bottom of my car and hit another vehicle," Morgan said.

The other driver's insurance company, Loya Insurance Group, opened a claim and Morgan took her damaged truck to a collision shop for an estimate. After a review, the insurer decided to "total" the vehicle. That was just fine with Morgan.

"I went to KBB, Kelley Blue Book, and it was $4,741 with all the extras, and that was for good condition, even though it was in better condition than good," Morgan said.

But Morgan says the insurer wanted her to release the truck to their salvage yard right away.

"And I said, 'Well, what's the settlement offer' and she was like, 'Well, we don't need to go over that right now, you have to release it or it's going to collect storage fees,'" Morgan said.

When Morgan found out she might be responsible for storage charges, she relented and released the truck, but she's not happy about it.

"I should be able to know what I'm going to be getting for it," Morgan said.

Morgan says it's been almost two months since the accident. She no longer has her truck and still doesn't have the money needed to buy another one.

"I want them to offer me a fair settlement, and I will take it, if it's fair, and just end this," Morgan said.

Insurance experts tell CBS 5 News that insurers may give you a settlement offer before you are asked to release your vehicle but a claims expert tells CBS 5 News that it is rarely done. Most times you will be asked to release your vehicle before getting a settlement offer. This allows you and the insurer to minimize storage fees. It shouldn't take more than a week to receive your settlement offer.

If you release your vehicle before getting the settlement offer and the insurer later makes you an offer you think is low, you can file a complaint with the Arizona Department of Insurance. If you can prove you were treated unfairly or the process was not conducted properly, the state may step in to help.

I contacted the Loya Insurance Group. They apologized for the delay and, the same day I contacted them, made a fair settlement offer (close to the value Morgan found on Kelley Blue Book) which Morgan happily accepted. Our thanks to the Loya Insurance Group for quickly and fairly resolving this matter after we brought it to their attention.

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Dave CherryCBS 5 Advocate Dave Cherry works to resolve your consumer problems and protect your money. If he can't help, he'll do his best to point you in the right direction.

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Dave Cherry
CBS 5 Advocate

Dave was born and raised in Philadelphia and considers himself one of the biggest Philly sports fans. At 6-feet, 5-inches, he's probably right! Dave started on a different career path before fulfilling his lifelong dream of reporting the news and helping consumers. Dave graduated from Philadelphia University with a Bachelor of Science degree in Accounting; he later earned an MBA degree in Finance from Temple University in Philadelphia. Dave also spent ten years as Vice President and Director of Sales and Marketing for two of America's leading real estate franchise companies. Dave started his 21-year news career at WHP in Harrisburg, Pennsylvania, as news anchor and reporter, then moved to KOLD in Tucson, as the morning news anchor. From Tucson, he went to KRON in San Francisco as a freelance news reporter before moving east to COMCAST in Philadelphia as a general assignment reporter. In the fall of 2003, Dave moved west and joined KPNX in Phoenix and spent nine years as the station Call for Action Consumer Reporter. Through his on-air advocacy work in 2011, Dave and his team were able to help consumers save more than $1 million. Dave joined CBS 5 News as our CBS 5 Advocate in December 2012. Dave is a vegan and likes to eat the amazing vegan food prepared by his lovely wife, Carmen. Dave's also a big Bruce Springsteen fan (he's seen more than 70 shows!), the man who inspired him to learn the guitar. Besides playing many of the boss' songs, Dave writes and sings his own songs and recorded a CD of original music.

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