Insurance company offers $5,500 for truck appraised at more than $40,000

A Camrose man spent more than $40,000 upgrading his truck, but when it was stolen and destroyed his insurance company offered only $5,500 in compensation.

'The truck was 95 per cent restored or rebuilt,' says owner

Robert Booth's truck after more than $40,000 in upgrades. (Robert Booth)

Robert Booth feels like he's spinning his wheels with his insurance company.

The 28-year-old Camrose man was already feeling deflated after his souped-up Dodge Ram, appraised at more than $40,000, was stolen and destroyed.
Robert Booth feels like his insurance company isn't giving him fair value for his truck. (Robert Booth)

Now he says his insurance company, The Co-operators, is failing to live up to its name when it comes to a payout.

According to Booth, The Co-operators initially offered him $5,500, nearly $35,000 less than he was expecting. 

"I was like, 'Well, that's fine for a truck that has 400 and some thousand kilometres and 20 years old,' " said Booth.

"Yeah, my truck's still 20 years old but it doesn't have 400,000 [kilometres] on it anymore. It's been completely restored to like-new standards and they still refuse to do anything about it."

After Booth rejected the initial $5,500 offer from The Co-operators, he says the company came back to him with another figure: $9,000. He is still not satisfied.

Used truck wasn't perfect

Booth admits when he bought the truck for $5,000 it wasn't in the best condition.

"A rusted P.O.S," he said.
The condition of the truck when Robert Booth purchased it. (Robert Booth)

He initially planned to use it as a winter vehicle. But when the economy started tanking he decided he might be able to use it to make a few bucks.

"I figured sooner or later I was going to end up losing my job, which turned out to be true," said Booth. 

"I wanted to build the truck and have it ready to go for when that happened," he added. "Because the way I had built the truck was to be an off-road recovery vehicle.

"Like if someone is stuck in a ditch or they're stuck in a swamp, I can go pull them out for a fee and try and make my ends meet." 

That rebuild wasn't cheap.

He said he spent $30,956 at Camrose Chrysler, $5,514 at Fountain Tire, $4,392 at Double T Auto Body and $3,790 at Shocker Mechanical.

"The truck was 95-per-cent restored or rebuilt," he explained.

This is the condition the truck was found in after it was stolen. (Robert Booth)

Booth was happy with the finished product.

"It was fun. It put a big smile on my face driving down the road," he said. "Terrible fuel mileage but it was a great truck."

Booth has records showing the truck was appraised at more than $40,000 once all the work was finished. But problems began when he notified his insurance company about the improvements.

"My original insurance company I had didn't want to cover the truck anymore because it was so heavily modified and they figured it to be a liability," said Booth.

"I found this insurance company [the Co-operators], they agreed to take it for X amount of dollars and when I gave them the appraisal they upped my premium to cover the said new cost."

Booth said his annual premium jumped by about $900 and he was left with the impression the vehicle would be fully covered, including the upgrades.
This photo shows some of the upgrades under the hood. (Robert Booth)
 

"It even showed on their policy," he said. "It showed the vehicle was purchased for $40,900 and in case of a total loss it would be covered for $43,000.

"I figured they were including all the work and figured they saw the truck as a rebuilt, restored truck, not just some piece of junk."

Booth soon got his first chance to test out the truck. On Feb. 9 he used it to pull a friend's vehicle out of the ditch. Days later his souped-up truck was gone — stolen at about 1:30 a.m. on Feb. 12, and then burned.

"A burnt heap, there was very little left on the truck," he said. "There was basically nothing salvageable off of it, total loss.

"I was beyond mad."

That anger grew when he tried to make an insurance claim.

Booth had another appraisal done after the vehicle was stolen and burned. Again the truck was valued at more than $40,000. But the insurance company didn't budge.

"Their reaction to that was saying that because of the age of the truck, and because of the kilometres of the truck, it was all required maintenance. It wasn't restoring the truck, it was maintenance."

Booth was shocked to learn the upgrades were not taken into account by the insurance company.

"They don't care how much work was actually put into it. But why would they require an appraisal?" Booth asked.

"They wanted proof of work, they accepted the appraisal, they raised my premium by $900 and all said and done, even with all the paperwork, they're still going 'No, it's not worth that.' " 

'Umpire' to decide final payout

In an email to CBC News, Leonard Sharman, a spokesperson for The Co-operators, wrote:

"It is unfortunate that an agreement on the value of Mr. Booth's vehicle has not been reached yet. We are hopeful that this will be resolved, and have let him know that the option of going through Alberta's dispute resolution process is available to him."
 
Sharman said the insurance policy wording is set by a provincial regulator and is standard across the industry.

The policy provided coverage of either the appraised value of the vehicle or the actual cash value at the time of the loss, whichever is less, he said.

"It is important when buying insurance to make sure to ask questions of their adviser and fully understand the scope of coverage that they are purchasing," the statement said.

"The best time to work out these details is always at the time of purchase, and not when a claim arises." 

Booth said he understands now that he should have had an agreement with the insurer on a specific value that would be paid in full in the event of a total loss. He's left with few options except the dispute resolution process, he added.

"They want my appraiser and their hired appraiser to go over the paperwork, and if they can't decide on anything, can't decide on a fair number, then they hire an 'umpire' and that person has the final say," said Booth.

"Whatever that person thinks the truck is valued at is what I get, and that's it, it's final."