Episode 68 with Alex Aleksanyan: Depths of Appraisals & Insurance Strategies

Welcome back to California Life podcast. Today we will be discussing another very important financial topic based on the questions that we received from our viewers. And today we're discussing insurances. Everyone, not just in Hollywood community but all around California, maybe even other states, know how difficult it is to deal with different types of insurances, especially auto insurance. This is why today we are glad to meet with Mr. Alex, and I know that you are a very in-depth professional about the insurances. You've dealt with insurances for your whole life in business, and thank you for coming to the show. I know you have a very busy schedule, and thank you for having us at your headquarters here.

Thank you, thank you for having me.

Of course. I know that you grew your company from local to nationwide, and I think it's a pretty big success. It's not that easy to do, especially in this pretty challenging business. Let's begin with what is that your company is doing in the market. I know that you don't sell insurances.

No.

You deal with totally different operations, analytics, and you provide your services to both consumers and insurance companies. So, let's begin with What is that you do, and then we'll continue with other questions.

So my company is called Modern Appraisers. We primarily focus on appraisals of vehicles. You know, we do RVs, we do trucks, trailers, motorcycles, but, but the majority of the business is in the auto side. And basically what we do is we evaluate vehicles and we determine what the correct value for the vehicle should be. For instance, in the event the vehicle is a total loss and vehicle owner feels that the value of the car is, is not accurate, they'll reach out to us and we'll do a complimentary review of the file and we'll let them know if the value that was presented to them is actually a correct value, is it, you know, how close it is, is it worth challenging or not. We do the same thing for insurance companies as well. So, you know, if a vehicle owner feels their value, the value of their vehicle is worth X amount of dollars and it may not be, the insurance company will hire us to evaluate that and figure out what the value is. So that's one of the things that we do, that we offer to both the insurance and the consumer world. The second thing that we do that benefits, you know, everybody involved is called diminished value. Right. In the event the vehicle is repairable and it's repaired to perfect factory standards, we put together a report showing how much the vehicle has diminished in value as a result of the accident. Even though the car is repairable and even though the repairs are perfectly done, that vehicle is still worth less than a vehicle that was never in an accident in that marketplace. So, so we figure out what that number is.

Right. We know that so many insurance companies are now so difficult to deal with, especially in California. Many of them are leaving California. What is happening with the market in general?

As far as the insurance companies leaving California, I don't know the specific reasons as to why they're leaving. I think a lot of it has to do with the The amount of claims, the cost of the claims, and certain insurance companies— I know there's certain laws in California that doesn't allow them to raise the premiums to accommodate for the amount of losses that they're having or something along those lines. So from what I understand, a lot of the insurance companies are no longer writing policies in the state of California, but have a long-term game plan to return to California after a few years and probably enforce the correct policy. amounts after they've came back. Again, I don't know the specifics of it, but it's something along those lines.

Right. You've mentioned that you're dealing with, let's say, vehicles which are totaled or they have any other damage. If to compare this to a medical field, right, you as a doctor come and evaluate the condition of the patient which is already there, but also a good doctor comes beforehand with some treatment preventative. Is there anything that you could advise our viewers in terms of preventative care based on your experience so they wouldn't have many issues with insurance companies or anything like that?

My suggestion is this. I mean, the person— the company that's making you the offer is the company that's paying you for your car. So I don't want to say it's in their best interest to give the least amount for the vehicle, but they're also the party that's paying the amount. So they'll come up with an evaluation, a dollar amount that they feel is correct. My suggestion would be to absolutely get a second, maybe even a third opinion on what your vehicle is worth, just to make sure that the offer that you're getting is a fair amount.

Right. In the market of the services that you provide, How do you see your competition doing and what makes you stand out?

To be honest with you, I'm not focused on the competition. We're just focused on growth. We've been growing at a very rapid rate for the last 5+ years or so. You know, we went from specifically working in the state of Nevada, expanding into the surrounding states, and now we're doing business nationally. The majority of our business is coming from, I would say, 50/50. About 50% of our business is coming from the consumer side, the vehicle owners. The other 50% is coming from the insurance company side. And there's a certain policy language within the policy, it's called appraisal. Everybody calls it, you know, appraisal clause or right to appraisal. Basically what that is, is it allows either party, whether it's the insurance company or the vehicle owner, to challenge each other in the event they're in disagreement with Anything regarding the ACV, the ACV meaning the actual cash value of the vehicle, Right. or the amount of loss. And the amount of loss could be multiple things. It could be the cost of the repair, it could be salvage bids, the salvage value, it could be the storage preservation daily fee, could be the loss of use, the diminished value. So anytime either party disagrees with each other on any of those elements of loss, they have the right to invoke appraisal. And when that's done, The claim goes to 2 independent appraisers, and these independent appraisers work out the details of how much the correct dollar amount should be. But as far as our competition, we try not to focus on the competition. We just try to focus on our customers and just forward movement.

Right, of course. That's what the winners do. They focus on the winning. They don't focus on— You mentioned that you started in the state of Nevada and then you grew rapidly. What do you think in this field was your Recipe of success and growth? It's a challenging field.

So what I think— so I— what I had— so the reason I got more and more involved on this line, I initially started off as a field appraiser assessing damage on vehicles. I've worked for multiple companies, insurance companies, independent companies. My father had a repair facility. I've worked there. But what made me really focus on this side is one of my family members had a claim and the insurance company made him an offer that was very low. And I assisted my family member and understood the process of what it takes for a consumer to get the correct value. And it was very challenging, it was very difficult for them. So as I went through this process, I understood that there's got to be a better process and there's got to be people out there that are helping the consumer or the carrier, but, but helping in, in getting these resolutions done quicker and faster and more efficiently. And that's kind of what inspired me to get in. It was, it was more on— it started on the consumer side, then I realized that both sides actually need assistance. So, um, so my focus, uh, was to create a system that'll benefit everybody involved. That was my driving force behind it.

Right. Well, it's, it's, it's always great to work with a person who is passionate about what he or she does, is sharp as a tack, and is professional. And you combine all of these qualities in yourself. Thank you. Thank you. For, let's say, consumers, right, what qualities and qualifications do you believe they should look for when they are looking for a professional appraiser, whether it's an individual or a company?

Some of the stuff I would, I would check on as a consumer would be— one of the go-tos is always Google reviews. I mean, you always want to check Google and see what the public is really saying about this company, this individual, the people that work there, the environment, you know. So Google is a very good source, an immediate go-to. Checking the website, their website, to see how legitimate they are and things along those lines. But I would always start off with maybe even having, you know, call them and have a discussion with them. Ask them questions about your vehicle. See what they think. And see what they know and then just get a kind of get a feel for what kind of company that you're dealing with.

That's a very good thing that you mentioned. Many people, including, for example, myself, we don't really know which questions to ask, right? Because, yeah, it's logical that you're saying, but what should I ask the appraiser in order to see if he or she is qualified for real?

One of the certifications, there are certain certifications certifications that are required, you know, to be an appraiser in certain states. Certain states don't require it. I'm certified in multiple states around the nation as an independent adjuster that allows us to work in those areas. You know, there's ethics tests that you have to do, you know, USPAP. There's certain things that you need to do. And these are some of the questions that I, you know, certification-wise, how long they've been in the business, how long they've been doing this, maybe some results. But these are the type of questions that I would ask the appraisal company if I was looking for a good appraisal company.

Right. For example, when I'm looking for a real estate agent, I'm asking him or her about her cases, about her deals, and I look for stories which have success and failures. Of

course.

And in real estate business is obviously different. In your business, how would you define a success of a case versus a failure of a case?

So as far as success, for me success is making sure that both parties are paying the correct amount for that vehicle. We've had many occasions where we would have a vehicle owner contact us and say, hey, I You know, I feel my value, the value of my vehicle is worth X amount of dollars, and I need you guys to make sure that that's the number that we get. So when we do our complimentary review of the file, we— that's exactly what we assess, is what is the vehicle actually worth. Not what the owner thinks it's worth, not what the insurance company, or— we actually do our own independent research and figure out what the vehicle is worth. Now, if the owner feels, for instance, the car is worth $50,000 and the insurance company is offering them $45,000, and we run our independent review of the file and we feel the car is worth actually $45,000 and not $50,000, we normally don't take that claim on simply because we don't want to waste the owner's time, we don't want to waste the insurance company's time, and more importantly, we don't want to waste our time. Mm-hmm. To me, that is the— I don't want to say failure, but it's kind of— it's almost like a failure in the vehicle owner's eyes because we're not Accepting their claim. But in my eyes, that's, that's, uh, that's, that's not failure. That's actually a win because we're saving everybody's time and energy and effort, and, and we're letting the vehicle owner know, complimentary as a second opinion, that the offer that the insurance company made you was a fair offer. Um, so, so that would be— that would kind of fall into failure, uh, question. As far as the success question, going back to that, getting the correct value. If the insurance company offered $45,000, going back to the original example, yet the vehicle should be worth $50,000, we will fight for that vehicle owner to get the correct value for that car. And vice versa, if the insurance company is the one hiring us and the car is, you know, they've offered $45,000 and the owner's just being not reasonable and requesting a higher amount, we will fight for our client, the insurance company in that case, to get him the correct value. the correct amount for— to make sure the claim is settled for the correct amount as opposed to what any party is looking for. So that's the definition of an independent, is we independently do these evaluations and we independently fight for what the correct value should be.

You just mentioned this example, let's say, of the $45,000 appraised amount by the insurance company, and the owner could want more, or, you know, in any case, when you're providing a correct answer, whether it's beneficial to the owner or to the insurance company or it's in the middle, it's always a success of your correct decision as a professional.

It's always successful when you're coming up with the correct numbers. You know, some people may not be happy with that correct number, some people may. You know, it doesn't matter which side side is happy or not happy. At the end of the day, we have— our obligation is to be fair and reasonable and unbiased and just be as neutral as we can in our evaluations to make sure that the correct dollar amounts are being put out there as opposed to numbers that are being requested by our clients.

Have you ever encountered a situation when, let's say, an insurance company would offer $45,000? As in your initial example, the owner will go a little crazy, would want $55,000, $60,000. You would come as an independent appraiser and you would appraise it for $35,000, below what the company was offering.

Has that happened? It has happened. The numbers were not that drastic. So we've had situations where, for instance, it was off by a little bit, you know, going back to this example, if the insurance company came in at, let's say, $45,000 and The vehicle owner wanted $55,000, you know, and we did our numbers and usually we wouldn't come in at $35,000 because insurance companies don't make mistakes like that. Usually we might come in at maybe like a $44,000, like a, you know, slightly higher or lower depending on location or trim or condition, etc. If that was to happen, if it was the vehicle owner that was trying to hire us in that situation, we would let the vehicle owner know that, hey, the numbers were coming back with are roughly around where the insurance company's at, and maybe even a little bit less, our recommendation to you would be to take that offer the insurance company gave you. And vice versa. I mean, if we run the numbers and the owner is right and the car should be $55,000 as opposed to $45,000, we would let them know, no, you know, we think the car is actually more. The insurance company may have missed an option or something that the vehicle is equipped with that was not taken into consideration. Therefore, you know, allow us to speak with— notify the insurance company, get them to hire an independent appraiser, and we will work with the other independent appraiser to get you the correct value for the vehicle.

But in the case if you're coming with a lower amount than insurance company is providing, offering, will you also inform them? Like, hey guys, you're offering more than you should,

or So, so it depends on the situation. If the insurance company is the one that's hired us, we would absolutely let them know because, because they're the ones. But normally before we're hired, we are, we are asked to look at the rough numbers before we're hired. So most of it would be suggestion and our opinion of what the numbers should be. For instance, if the numbers are a little bit less, normally most insurance companies, once they've made an offer, It's the undisputed amount, so usually that offer kind of sticks. They're very— most insurance companies are very reputable in terms of not going back on the offer that they've made. You know, even if I was to contact them or the vehicle owner, or someone from my office would contact the insurance and say, hey, $45,000 was your offer, we think it's worth around $43,000, they'll take that information in, but usually they're really reputable and they'll Stick to the number, the undisputed number that they've offered the owner.

Right, right. Well, it's, it's definitely a very interesting field, and there are so many things to learn in order to just keep your own finances safe. In terms of this education, what sources would you recommend people to, to get to learn in order to not be, you know, so fragile without knowledge?

I would say just ask questions. That's, that's the number one thing. Whether it's contact— or, and contact professionals that are in this field, whether it's calling Modern Appraisers or, or another appraisal firm that, that does similar services. My recommendation would be to reach out to the professionals. Some companies charge to review the reports. We do it complimentary. And, you know, send us your paperwork, let us take a look at it, and we will honestly tell you if there's— if the reports that were— the numbers that were given to you are accurate, are they not accurate, in which direction are they not accurate. And then based on that, you as a vehicle owner can make a decision. Do I want to move forward with invoking the appraisal clause? Do I want to move forward with diminished value? or any of the elements of loss that you disagree with based on the information that we give you.

Thank you. Thank you, Alex. That was extremely valuable. I believe it's also valuable to our viewers. I'll be looking forward to our next episodes because it's such a deep field and we need to learn a lot in order to, to keep our finances safe and our vehicles and our lives. Thank you for having us again at your beautiful facility. Thank you for coming to the show, and We'll stay in touch with you and we'll make sure to share your contacts with our viewers to help them connect with you and get the best experience. That's very important.

Thank you for having me. I appreciate it.

Thank you.

Thank you.