Davis Kelin Law Firm Wins Settlement For New Mexico Towing Company That Was Victim Of Arson
Confidential Settlement, Insurance Bad Faith and Repair Fraud: Small New Mexico Business
A core business asset of a small New Mexico towing company was a 1987 International Wrecker. The business insured the vehicle through a national insurance company. On April 5, 2009, an arsonist set fire to several vehicles including the ‘87 International Wrecker. The arsonist had set fire to several buildings and vehicles on Central Avenue. The fire was so intense in the cab of the International Wrecker, that Albuquerque’s Fire Department had to engulf the wrecker’s cab with fluid. The wrecker was completely inoperable.
The next day, the business reported the loss to its insurance company. The business told the insurance company that it needed the wrecker back on the road quickly because it was the busy season. The national insurance company did not maintain any staff in New Mexico (despite selling lots of policies in New Mexico) and asked business owner to begin adjusting the claim by obtaining photos and estimates. The business obtained three estimates, and all came to the same conclusion: the ‘87 International Wrecker was a total loss and could not be repaired.
The insurance company did not like those estimates of the claim. Instead, it asked a regional trucking repair shop to inspect the vehicle and provide a repair estimate. The repair shop’s estimate was over $39,000 to repair the vehicle. Given that an International tractor of a similar type was only $6,000 to 11,000, the repair would have far exceeded the cost to replace the tractor and simply attach the Zak lift on to the truck. Under the insurance company’s policies and standards for the industry, the vehicle should have been totaled.
The insurance company, however, ignored the three estimates provided by the small business and the estimate provided the repair shop. The insurance company created its own estimate from without ever inspecting the vehicle. The desk repair estimate was for just over $18,000 based on using a used cab from an auto salvage.
The result was the small business lost its commercial towing business. Because the insurance company put its interests ahead of its insured’s interests, we were able to resolve the case for a significant, confidential amount after litigation.