Wheelchair van total loss and physical damage insurance: stated value, the conversion, and gap

A totaled wheelchair van is paid out of the physical damage coverage on your business auto policy. The standard form pays what the van was worth at the time of the loss, not what you paid for it or what a new one costs. The conversion is where most of the money is lost. Its value disappears when the insurer’s valuation treats the van like an ordinary minivan or cargo van, and the policy’s stated amount does not protect you the way many owners think.

The repair side, including which shops can fix a lowered floor or ramp, is covered in fixing a crashed wheelchair van. This guide picks up when the repair would cost more than the van is worth, or the van is stolen or burned. Prices for new and used conversions are in what a wheelchair van costs.

How does a business auto policy pay for a totaled van?

It pays the lesser of two numbers, minus your deductible. Section III of ISO’s business auto coverage form, CA 00 01, pays for loss to a covered auto “or its equipment” under the coverages you bought: comprehensive for any cause except a collision or the van overturning, specified causes of loss for a named list such as fire, theft, windstorm and flood, and collision. The most it pays for one auto is the lesser of:

1. The actual cash value of the damaged or stolen property at the time of the loss.
2. What it would cost to repair the van or replace it with a similar one (the form’s words are like kind and quality).

If the van is totaled, the form adjusts actual cash value for depreciation and physical condition. Betterment is not paid, meaning anything that leaves you better off than like kind and quality. When the insurer pays, its payment includes the applicable sales tax. It can also choose to repair, return stolen property, or take all or part of the damaged property at an agreed or appraised value.

Actual cash value itself is not one formula. IRMI, a risk management publisher, describes three common ways to calculate it: repair or replacement cost minus depreciation, fair market value, or the broad evidence rule, which weighs all relevant evidence of value. State law and your policy wording decide which one applies.

When does a wheelchair van count as totaled?

When the insurer decides repair costs too much compared with the van’s value, within limits your state sets for titles. Two examples:

• Florida. A vehicle is a total loss when the insurer pays the owner to replace it with one of like kind and quality, or pays for a theft. An uninsured vehicle is a total loss when repair would cost 80 percent or more of replacing it. If the insurer and owner agree to repair a vehicle whose actual repair cost exceeds 100 percent of replacement, the owner must ask the state within 72 hours to brand the title “Total Loss Vehicle.” Florida also carves out converted vans. A late-model vehicle worth at least $7,500 whose repair estimate reaches 90 percent of its retail value is normally declared unrebuildable, but if it has custom-lowered floors for wheelchair access or a wheelchair lift, the insurer may, after deciding it can be made safe for the road, ask for a salvage rebuildable title branded “insurance-declared total loss.”
• Iowa. For salvage title purposes, a wrecked or salvage vehicle is one whose cost of repair exceeds 70 percent of its fair market value before the damage.

The conversion changes this arithmetic. Example: a crash causes $24,000 of damage. If the insurer values the van as a $30,000 base vehicle, the repair is 80 percent of value and the van is headed for salvage in a state like Iowa. If the valuation includes the conversion and the van is worth $55,000, the same repair is about 44 percent, and the van can be fixed. Getting the value right first decides whether you get the van back.

Getting the conversion counted

Used car guides do not price mobility conversions, a problem explained in the guide to diminished value claims. When the insurer settles your own total loss, push for comparables that are converted vans, not base models.

State claim rules help here. Florida’s section 626.9743 applies to commercial as well as personal auto claims. When a policy settles total losses on actual cash value and the insurer pays cash based on what a comparable vehicle costs, it has to price that vehicle from one of three sources: two or more comparable vehicles for sale locally in the last 90 days, a recognized database or guidebook, or quotes from two or more licensed dealers. If it uses a database, it must hand over the relevant parts of the valuation report when you ask, and if it uses a guidebook, it must tell you which one. A comparable vehicle must come from the same manufacturer, be the same or newer model year with a similar body type, and have similar options and mileage. Any deduction for depreciation or betterment must be itemized in dollars, and the insurer must explain it in writing on request.

Read your state’s version before the adjuster calls, and send what proves the conversion:

• The conversion invoice or window sticker, with the converter’s name, ramp or lift model, and price.
• Lift or ramp serial numbers and the converter’s labels inside the door frame.
• Service records for the lift, ramp and securement system.
• Listings for converted vans of the same year range and mileage, from mobility dealers.

If you still disagree, you can invoke the appraisal clause in the business auto form. You and the insurer each name an appraiser, those two pick an umpire, and whatever any two of the three agree on binds both sides. You pay your own appraiser and share the umpire’s cost equally.

Stated amount, agreed value and the vehicle schedule

A stated amount is a ceiling, not a promise. A Texas-approved notice of automobile insurance form, for example, lists each van’s physical damage limit as either actual cash value or a stated amount. Under ISO’s stated amount wording, the insurer pays the least of three numbers: the stated amount, the actual cash value, or what repair or replacement would cost. Virginia’s approved personal auto version says so in a printed notice: this is not agreed value coverage, and the scheduled figure may not be what you collect. Depreciation still comes off on a total loss.

Underwriters still ask for a stated amount on every van. RLI’s specialty NEMT auto program asks for a vehicle schedule that shows, for each van, the VIN and model details, its use and seats, any modifications or equipment attached to it for good, and a stated amount. Progressive lists a vehicle’s value, including equipment, among the factors that set an NEMT premium.

Use that schedule to protect yourself:

1. Set the stated amount to the converted van’s value, not the base vehicle’s. An amount set too low becomes the most you can collect.
2. List the conversion as permanently attached equipment on the schedule and on the application, so there is no argument later about whether the ramp was part of the van.
3. Update the schedule when you add a van, replace a lift, or install a new conversion. The scheduled auto entry explains why an unlisted van is a problem.
4. Ask whether agreed value is available if you want a fixed payout. It is a different provision, and it should say so.

Electronics are a separate trap. The business auto form excludes electronic equipment that “reproduces, receives or transmits audio, visual or data signals.” The exception is gear powered solely by the van’s own electrical system and fixed in place, and even that is limited to $1,000 for any one loss when it sits in a spot the manufacturer would not normally use for it. A tablet running on its own battery is excluded outright, and a camera or radio wired in where the factory never put one is held to the $1,000 cap, so ask whether an endorsement adds coverage.

Personal auto coverage is no fallback either. ISO’s personal auto form, as approved in Virginia, excludes physical damage while the vehicle is in public or livery service and covers custom equipment only up to $1,500. More on owner vehicles is in using your own vehicle for NEMT.

The lender, the loss payee and gap coverage

A financed van’s lender is paid first. The lender is listed as loss payee, which IRMI describes as the party entitled to all or part of the insurance proceeds because of its interest in the property. The Texas-approved notice form splits physical damage payments between you and the loss payee according to each one’s interest at the time of the loss.

That leaves you exposed when a newer van loses value faster than the loan shrinks. Example: you owe $58,000 on a converted van, the insurer sets actual cash value at $46,500, and your deductible is $1,000. The lender receives $45,500 and you still owe $12,500.

Gap insurance pays that difference. In the Texas Department of Insurance’s glossary, gap coverage pays what is still owed on the loan above the vehicle’s actual cash value, and some gap policies also pick up the deductible. Its consumer guide adds that auto dealers and lenders usually offer it; on a commercial van, also ask your agent whether the auto policy can add it. In the example, gap that covers the deductible pays the full $12,500; gap that does not leaves you the $1,000.

Keeping the lift from a totaled van

A lift or ramp that survived the crash can be worth recovering, but settle the question before you sign. The business auto form gives the insurer the option to take all or part of the damaged property at an agreed or appraised value. Texas’s insurance department warns consumers that keeping a totaled vehicle means the insurer deducts its salvage value from the settlement, so ask for that figure in writing and weigh it against what the lift is worth to you.

State title rules then apply. In Florida, an owner who keeps a vehicle in a total loss settlement must send the title to the state within 72 hours after it becomes salvage, the state issues the salvage certificate of title or certificate of destruction directly to the owner, and nobody may dispose of the vehicle until that certificate is issued.

A recovered lift only helps if it fits another van. Under federal standard FMVSS 403, each lift’s installation instructions must say which host vans it was designed and certified for, either as a list of models and years or as a description of what a suitable van needs. The steps, from mounting kits to re-inspection, are in moving a wheelchair lift to another van.

While the claim runs, the van earns nothing. If the crash was another driver’s fault, that driver’s insurer may owe you for the lost trips; see the loss of use claim guide.

Vehicle records that support the claim

An adjuster values a van partly on its condition before the loss. In HealthRide, each shift begins with the driver’s van check in the app, so the last inspection before a crash is saved with that shift. HealthRide also stores the date each van’s insurance and registration run out and reminds you ahead of time, so a renewal is not missed. What HealthRide stores for each vehicle is on the fleet and credentials page.