Iowa Administrative Code › Agency 191 - Insurance Division › Unfair Trade Practices › Chapter 15 - Unfair Trade Practices › Rule 191-15.43 - Standards for Settlement of Automobile Insurance Claims

Current through Register Vol. 47, No. 3, July 24, 2024
(1) Loss
				calculation and deviation guidelines.
a.
Loss calculation.
When the insurance policy provides for the
				adjustment and settlement of first-party automobile total losses on the basis
				of actual cash value or replacement with another automobile of like kind and
				quality, one of the following methods shall apply:
(1) The insurer may elect to offer a
				replacement automobile that is at least comparable in that it will be by the
				same manufacturer, same or newer year, similar body style, similar options and
				mileage as the insured vehicle and in as good or better overall condition and
				available for inspection at a licensed dealer within a reasonable distance of
				the insured's residence. All applicable taxes, license fees and other fees
				incident to the transfer of evidence of ownership of the automobile shall be
				paid by the insurer, at no cost to the insured, other than any deductible
				provided in the policy. The offer and any rejection thereof must be documented
				in the claim file.
(2) The insurer
				may elect a cash settlement based upon the actual cost, less any deductible
				provided in the policy, to purchase a comparable automobile including all
				applicable taxes, license fees and other fees incident to transfer of evidence
				of ownership of a comparable automobile. Such cost may be derived from:
1. The cost of two or more comparable
				automobiles in the local market area when comparable automobiles are available
				or were available within the last 90 days to consumers in the local market
				area; or
2. The cost of two or more
				comparable automobiles in areas proximate to the local market area, including
				the closest major metropolitan areas within or without the state, that are
				available or were available within the last 90 days to consumers when
				comparable automobiles are not available in the local market area; or
3. One of two or more quotations obtained by
				the insurer from two or more licensed dealers located within the local market
				area when the cost of comparable automobiles is not available; or
4. Any source for determining statistically
				valid fair market values that meet all of the following criteria:
* The source shall give primary consideration to the values
				  of vehicles in the local market area and may consider data on vehicles outside
				  the area.
* The source's database shall produce values for at least 85
				  percent of all makes and models for the last 15 model years taking into account
				  the values of all major options for such vehicles.
* The source shall produce fair market values based on
				  current data available from the area surrounding the location where the insured
				  vehicle was principally garaged or a necessary expansion of parameters (such as
				  time and area) to ensure statistical validity.
(3) If the insurer is notified within 35 days
				of the receipt of the claim draft that the insured cannot purchase a comparable
				vehicle for such market value, the insured shall have a right of recourse. The
				insurer shall reopen its claim file and the following procedure(s) shall apply:
1. The insurer may locate a comparable
				vehicle by the same manufacturer, same or newer year, similar body style and
				similar options and price range for the insured for the market value determined
				by the insurer at the time of settlement. Any such vehicle must be available
				through a licensed dealer; or
2.
				The insurer shall either pay the insured the difference between the market
				value before applicable deductions and the cost of the comparable vehicle of
				like kind and quality that the insured has located, or negotiate and effect the
				purchase of this vehicle for the insured; or
3. The insurer may elect to offer a
				replacement in accordance with the provisions set forth in subrule 15.43(1);
				or
4. The insurer may conclude the
				loss settlement as provided for under the appraisal section of the insurance
				contract in force at the time of loss. This appraisal shall be considered as
				binding against both parties, but shall not preclude or waive any other rights
				either party has under the insurance contract or a common law.
The insurer is not required to take action under this subrule
				  if its documentation to the insured at the time of settlement included written
				  notification of the availability and location of a specified and comparable
				  vehicle of the same manufacturer, same or newer year, similar body style and
				  similar options in as good or better condition as the total-loss vehicle that
				  could have been purchased for the market value determined by the insurer before
				  applicable deductions. The documentation shall include the vehicle
				  identification number.