Kill Bill…15

Vince M Blog, Rants...

Say hello to MPI’s proposed Bill 15. Then say goodbye to fair settlements.

Manitoba Public Insurance is about to eliminate any chance their customers have to avail themselves of a truly INDEPENDENT appeal process when they dispute one of MPI’s “lowball” offers on their total loss claim settlements.

MPI’s Bill 15, if passed, will overturn procedures that, though not without flaws and weaknesses, have survived for over 45 years and have been largely, effective.

Under the current procedures, anyone who “writes off” their vehicle for any reason (e.g. collision, hail, theft, etc.), has the right to appeal MPI’s settlement offer through a process most commonly referred to as “appraisal” or “arbitration”.

The process allows any MPI customer to dispute what they consider to be a “lowball” offer on their written off vehicle. If the customer believes they can show that their vehicle had an actual cash value (ACV) greater than that offered by MPI, they have the right to have the disputed value decided by independent appraisers hired by each side of the dispute.

Once the claim moves to the INDEPENDENT appraisal process, MPI is no longer involved in deciding the value and must settle for the amount decided by the two appraisers. In the event that the two appraisers cannot agree on an ACV, they will appoint an independent, third party appraiser, called an umpire, to review the claim, inspect the subject vehicle (where possible), and determine an actual cash value. Both parties are bound by the umpire’s decision on value.

The truth is that the vast majority of appraisal decisions are reached between the two appraisers and do not require an umpire.

Each party is responsible to pay their appraiser and appraisal fees vary.

It’s not a perfect process and it could certainly use some tweaks…but it is INDEPENDENT!

That’s about to change. If MPI is successful in passing Bill 17, MPI customers will be forced to take their disputes on value to a faceless, government-appointed “tribunal” that will be anything but INDEPENDENT.

Under Bill 15, if they feel MPI has undervalued their vehicle, MPI customers will have no choice but to take their dispute to the tribunal, when it comes to total loss settlements.

That will require a written presentation to the tribunal (along with a yet to be determined “application fee”), to be sent within 45 days of MPI’s offer, that outlines the claimant’s “case” as to why they think they deserve more money for their written off vehicle.

When the tribunal receives an application that disputes MPI’s offer, they will forward it to MPI for a response. MPI will have 30 days to submit their response to the tribunal. The applicant will then have 14 days to respond to MPI’s response. Following the tribunal’s receipt of the response to the response, the tribunal will review both presentations and make a decision as to the actual cash value of the subject vehicle. The tribunal’s decision on value will be final and binding on both parties.

Despite MPI’s claims to the contrary, the new tribunal process could conceivably take up to 4 months to settle claim disputes, making it significantly longer than the current appraisal process, which settles most claim disputes within 30 days.

The net result of the new legislation will be lower settlements for MPI customers and a much more complicated, much less independent, process.

Under the current appraisal process, MPI customers wishing to challenge what they consider to be “lowball” offers, can simply refer the claim to arbitration and let the respective appraisers determine the vehicle’s true value. Because the tribunal process will require written presentations and up front application fees , it will clearly create prejudice against specific groups of customers, including seniors on fixed income (many with no computer skills), new Canadians with limited English and single parents with limited resources will all find the new process much more difficult to navigate on their own and many will likely choose not to appeal “lowball” offers or claim denials from MPI.

There’s more to Bill 15 than is detailed here, and we strongly suggest that ALL MPI customers and stakeholders read the bill. It has been conceived and written to make MPI’s ability to make lower offers to customers much easier.

Consider this…

  1. MPI is a government crown corporation.
  2. The proposed “independent” tribunal will be appointed by the government.
  3. It will be largely paid for and controlled by the government.
  4. It will be accountable to MPI.
  5. MPI will be allowed to “assist” the tribunal. MPI’s customers will not.
  6. MPI’s settlement offers will be solely based on values provided to them by an American company with a reputation for undervaluing vehicles and who will never even inspect your vehicle.
  7. No qualified appraiser will ever physically inspect and appraise your vehicle prior to MPI’s offer on value.
  8. If you choose to apply to the tribunal, you have no legal recourse when the tribunal finds in MPI’s favor on the question of value.

The bottom line…

Because MPI is a government-controlled crown corporation and has a monopoly on auto-related insurance, it is critical that there be a completely independent appeals process available to MPI customers when disputes on vehicle values arise between vehicle owners and MPI.

For MPI to suggest that their proposed appeals “tribunal” will function independently is laughable. If Bill 15 is allowed to pass, any independence that exists in the current appraisal process will be lost and future total loss claim disputes will be weighted heavily in MPI’s favor.

We believe it is imperative that MPI provide more answers and more clarity to their customers before proceeding any further on Bill 15.

The public deserves to know…

  1. Why did MPI decide to abandon a truly independent, time-tested appeals process in favor of a government-run tribunal that is more complicated and more time consuming and which has clearly failed the “independent” test from its inception?
  2. What qualifications and appraisal expertise will tribunal members be required to have?
    Why does MPI pay an American company, known for undervaluing vehicles, over one million dollars a year, to put values on Manitoba vehicles THAT THEY’VE NEVER EVEN SEEN, when there are perfectly qualified appraisers, who live and pay taxes, right here in Manitoba?
  3. How do they explain the fact that when one of their American company’s so-called appraisals is challenged through the current independent appraisal / arbitration process, that the settlements are increased almost every time?
  4. Why aren’t those millions of dollars going toward creating jobs for Manitobans who are not only expert appraisers, but who will actually physically appraise the vehicles?

We believe that Bill 15 is an attempt by MPI to make it harder for its customers to receive fair market value for their vehicles when they’re “written off”. We suggest that it is nothing more than a cost-cutting measure designed to increase profits by paying its customers less for their vehicles.

Bill 15 is poorly thought out, it clearly takes the appeals process from “independent” to “MPI friendly”, and it discriminates against those who can least afford it.

Kill Bill 15