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Replacement Cost by Insurance Company for Totaled Vehicle

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Comments

  • I don't think they are under any obligation to sell it back to you. This is especially true in cases of cars stolen and stripped. The insurance company is afraid the theft was rigged, and that the parties involved will rebuild the car with the stolen parts they have stashed.
  • Any help would be nice, I am not sure what to do. I was rear ended and it did enough damage to total the car. The insurance adjuster said that my car is only worth $3900 but the blue book value is $6600. They are taking off $1500 because it is a salvaged car, why that amount?? I had no idea it was a salvaged car when I got it and the person I got it from didn't tell me. I am paying for full coverage but if my car isn't worth the coverage I have been paying for 4 years is there something I can do with my insurance people. If I fill a claim with my insurance do they have to give me the amount I have been paying for? Please help, anything will be nice!

    Thank you!
  • cccompsoncccompson Posts: 2,388
    The insurance company is obligated to pay you what the car is worth. If it has a branded (i.e., salvage) title, it is worth considerably less than "blue book" (which itself is pretty meaningless) or a comparable vehicle with a clear title. I don't understand how you could not know that is was a salvage vehicle.

    It would help if you could provide further details about the vehicles so we could offer a better idea of what it was worth prior to the collision.
  • I have a 1998 Ford Ranger and last night I was in a car/deer accident. I hit him at highway speed and had both airbags deploy. The insurance company has already told me that the truck will be totaled because the of the air bags going off. The truck is a one owner, clear title and the truck was in good shape, (no rust, or major dents, paint was clean) It has high miles (103000). I was wondering what figure they would use to pay me. The trade in value is not very high, but retail is at minimum 3000, both KBB and NADA are in that area, Edmunds ran a little higher at 4000. When saying fair market value is that trade in value or replacement value?
  • cccompsoncccompson Posts: 2,388
    It's replacement value. Don't forget to get money to cover tax and title as well.

    Truck values vary WIDELY depending on optional equipment.
  • The car doesn't have a salvaged title and my insurance company is the one how totaled the car in 2001 and I bought it in 2002. They also told me that they are not allowed to give Full coverage on a salvaged car and that is what I have had since June of 02. I wasn't told by the owner that it had even been in a wreak and he may not of even know since his title wasn't a salvaged title, someone along the line didn't get a salvaged title for this car. I talked to my insurance and they told me to seek legal advice.
  • cccompsoncccompson Posts: 2,388
    The problem is that the amount at issue here ($1500 or whatever it is) may not make it economically feasible to hire a lawyer.

    My inclination would be to take a hard line with the insurance company on this. They are claiming that they alone have particular information that lessens the value of the vehicle. Even if it's true that they paid out a loss years ago, I have a hard time seeing the sort of dimunition in value they are now talking about. A $6000 vehicle simply doesn't take a big hit in value due to prior repairs (absent a salvage title). True, there should be some reduction but not much.
  • I just talked to someone at the Department of revenue motor vehicel department and they told me that my car did have a salvage title in 01 and then it was given a clear/clean title also in 01 when a company bought it. And that until 2004 you could get a clean title on cars that were totaled and then rebuilt. Is this really true?? I find this hard to believe and I am not sure the girl I talked to really knew. I called the GA insurance commisioner about this and they gave me the number of the place I already talkd to. Any help??
  • Hi, My car was in a bad accident and the car is being totalled. The car is a 2005 Toyota Corolla LE with ABS, 5 CD changer, and cruise control with 19,000 miles on it. Prior to the crash the car was in very good condition. Edmunds.com or Kbb.com give the trade-in value of the vehicle to be about 12,000$. The car was financed by toyota financial and the pay off balance is 11804$ as of today. My insurance company is Geico and the fault in the accident is mine. I have the following questions and I would really appreciate advise here: 1) What value should I expect from Geico? Is it the same as I see in Kbb.com? 2) What I owe toyota financial will then be the pay off balance minus the amount geico claims is the fair market value of the car. Correct? 3) Will they pay for title change, sales tax when car was bought etc? 4) Please share with me any pointers to make sure that I get a good deal from Geico - anything I can do to improve my chances here. Thanks very much!
  • How do I find out what is the replacement value of the car? Is it the trade-in value (lowest of 3 i.e. fair condition) as per KBB.com?
  • Hi, I need some advice. I saved for months to buy a car, it wasn't much, but it was a 95 Ford Contour, had 105,000 miles on it and was in good condition. That was a month ago. Last week, my car was parked in front of my house, and a 16 yr. old boy with his license for only two weeks was running late going 50 miles an hour in a 35 mph residential neighborhood, dropped his cell phone and in the process of looking for it, crashed into my car. Their insurance company (Grange Insurance) deemed my car a total loss. I paid 1,300 dollars for the car, the Blue Book Value is two thousand, but because of a few things such as a crack in the bumper and some rust on the roof, their offer is 800 dollars. I've talked to my insurance company (Progressive) and they're no help. Progressive says there is nothing that I can do, and the people at Grange are not very nice. I assume I have to take the 800 dollars, but it just doesn't seem fair. I missed two days of work because I didn't have a way to get there, they said they would give me ten dollars a day for those two days. Any advice? Thank you.
  • Hi, same poster as before - with an update. I have not accepted the 800 dollar offer, I call to talk to my insurance rep (who is conveniently out of town until next week) and find out that the other person's insurance company already sent out the salvage company to take my car. This was after I told the rep from Grange Insurance that Progressive was coming out to appraise the car themselves. But when progressive went out they found the car already gone. Then they say that they want their rental car back tomorrow but they won't be sending a check out until next week. I am totally confused and feel like I am the one being punished here. I have looked up comprabable prices for my car, I even list it as "rough" condition, when it's not, and the dealer value (which is what they say they are using) stands at 1200 dollars. Please help!
  • cccompsoncccompson Posts: 2,388
    Grange has not right to touch your car without your permission or your having signed the title over to them. We have a law here in Ohio that covers this - it's called theft. While they probably were just trying to reduce storage costs, call them to have it returned to you if that's what you want.

    The fact that you paid $1300 only a month ago should be decisive as to its value. They'll be able to see that figure on your title (you did declare the correct amount, right?). Demand that from Grange as well as sales tax. If they balk, tell them you're headed to small claims and file against them.
  • My husband totaled his 95 Jeep Wrangler :cry: , which the insurance company is valuing at $5170 (which is good), but their buy-back price offer is $1450 - which is like 28% of what they are valuing it at. Does this seem outrageously high (I keep reading 10 - 13% is the norm, or are insurance companies at liberty to price the buy-back at whatever they want? ETA: We are in Arkansas, if this makes any difference as far as what is the norm.

    Thanks in advance for your feedback.
  • I was lost at night and hit what was essentially a ski slope, went airborne, and came down in a rut on the side of the road, on a large rock. I wasn't even speeding but the damage was major.

    I've never been in an accident before. I guess my question is how do I know what is a fair price to be offered if the car is deemed totalled? Is this a bargaining process?

    It's a 2003 Subaru Forester XS with 28,000 miles, no accidents, one owner, clean, etc. Thanks for any help.

    If anyone cares to read on, the following might help someone. After I got out of the car to see if I was OK, it really didn't look too bad. I called AAA and they pulled it out of the ditch, saw the damage was extensive and went back to get a flat bed. While they were gone, the state police (NH) came and removed the vehicle to whatever lot they use. So the original guy came back and found no car.
    Lessons learned: 1) AAA does not cover these towing fees (at least with standard AAA), so make sure you know what you're covered for or what your insurance covers for towing. I now have to pay the initial pull out of the ditch, the return trip with the flatbed to find the car gone, the guy who the cops had do the actual towing, storage in his lot while I figured out where my care was, and finally towage to the final repair facility.
    2) I didn't realize I had to call the police. I figured I had run off the road, nobody was hurt, no property damage, etc. Well, the state police were pretty angry and told me that I had created property damage to the earth and that I could face a year in jail for a misdemeanor but that they would only give me a speeding ticket instead on the assumption that I must have been going too fast for conditions.

    So anyway, I apologize for a long saga. Hopefully someone can offer advice on the financial aspects.
    I revisited the scene today and it is unsafe at the speed limit in broad daylight. The neighbors report frequent runoffs. Pretty frustrating since I have a clean record and have been driving for 30 years.
  • I will try to answer your questions.

    First off, Geico is going to base their offer on your car most likely from what other cars like yours are selling for. If you have been a member on these forums for awhile (and even if you haven't but have good common sense), then you know that KBB, Edmunds, NADA are guides only. The true value of a car is what they are selling for in your area. The company that I work for uses a replacement service that goes out to the local dealerships (via internet, newspaper ads, etc.) and finds comparable vehicles to the one they are trying to quote and we base our offer on those comparables. The reality is, that they only owe you what you can go out and buy the exact same vehicle for. Having said that, when we evaluate a car and inspect it, we give condition ratings and those are purely the opinion of each adjuster. If you have new tires and they rate them as average, then you have some room to negotiate with them. Same with the body panels, glass, interior, etc. Ask for a copy of their evaluation and see for yourself how they rated its condition.

    Realistically speaking, you should expect somewhere between trade-in value and retail value for your vehicle. As you know, retail value is what the vehicle will have an asking price of, not what the dealer would actually take for the vehicle. What the dealer actually takes for the vehicle though, should be a little higher than trade-in value as theoretically (in a perfect world so to speak), he paid that to the previous owner to put it on his lot. He wouldn't make any profit if he sold it to you for what he bought it from the previous owner for.

    As part of the settlement, you will get the un-used portion of your tag, title transfer fees and sales tax based on replacing your vehicle with the exact same vehicle. Also, you will get anything leftover after Toyota has been paid off. The insurance company will have to get either a lien release from Toyota Financial or the title itself. Some states title laws dictate that the buyer retains the title and a lien is placed on it while others dictate that the finance company holds the title until paid off. Either way, their lien will have to be honored first and then you get what is leftover after their lien and your deductible.

    I no longer adjust auto claims and I only do heavy property and commercial losses. I can honestly say though, that the adjuster only wants to settle your claim and have you rate the experience dealing with them as being a positive one. Contrary to popular belief, there is no incentive for the adjuster to "save money" by paying you less for your claim. We don't get bonuses or commissions for saving money. That would be extremely unethical let alone illegal. Our pay is based on goals that are set for us which includes a goal that we close 100% of the claims that we receive in a given month. If we miss those goals because we were arguing over the value of a car with a customer just to save money for the company, then we have actually cost ourselves money. The incentive is for us to get the claim settled. If that means that we kick out some more money to get it settled, then we won't hesitate to do it. That's why we are called adjusters and not appraisers or estimators.

    Also, just like in anything else, the nicer you are to us, the nicer we will be to you. We will go the extra mile for you and bend anyway we can. Just be realistic too and don't demand an un-reasonable amount of money that has no grounds to back it up. Don't puff up and be a jerk about it if you don't agree with the appraisal and threaten attorneys etc. That doesn't solve anything and we hear that so much that it has no effect on us and it won't affect the outcome either.

    Sorry for the long post and I hope I was helpful.
  • The short answer is no.

    The long answer is that it depends on alot of different circumstances. Salvage values for cars are based on what salvage lots are getting for them when they auction them off. Some cars have a lower salvage value while some have higher values. Especially if the car was only totalled due to the value of it and not because of the repairs it would take to fix it. What I mean by that is that because it is a 95 with a value of $5,170, they only have about $3500-$4000 that they can spend to repair it. If they spend more than that to repair it, then the total cost of the claim to them would be higher than if they totalled the vehicle and collected a return on the salvage.

    In the grand scheme of things, $3,500-$4,000 in repairs is not alot of repairs nowadays by no strecth of the imagination. Personally, I can tell you that back in 2002, we had damage done to our Accord coupe. A dump truck was hauling rocks (basketball size and larger) and some of those rocks flew out of the bed and landed on our windshield, right fender and roof. A rock also hit our undercarriage and damaged the suspension as well. The vehicle was still driveable and it really didn't look horrendous (although it did to us b/c we just bought it about a month previuos to this happenning :sick: ). Anyways, the total repairs were over $7,000.

    Salvage buyers at auctions are looking for cars that have good parts left on them. The more good parts left, the higher the salvage value.

    Most insurance companies will total a car when the repair costs have reached around 65-80% of the vehicle's value. They do this because they expect about a 20-30% return on salvage. Obviously, those numbers differ for each situation a little but that is generally the expected range. If the norm as you stated was 10-13%, then the insurance company wouldn't be so fast to total out a vehicle that was a borderline total which is what yours sounds like it is since you want to keep it.

    Also, being in Arkansas (go Hogs!), pickup trucks and suv's have higher salvage values than say a Chevy Cavalier b/c there are more of them on the road and the parts are needed.

    Finally, the last thing to keep in mind, is that a car with a whole assembly such as a front clip (both front fenders, bumper, headlights, grille and hood), that is still in good condition, will have a higher salvage value than a car that doesn't. The going rate for a front clip last time I checked was anywhere from $1,500-3,000 depending on the vehicle. Also, a rear clip is just as valuable (rear clip being the rear quarter panels, rear bumper, trunk and taillights) as a front clip. If either of these are still in good condtion, then the salvage value is definitely not out of line.

    Hopefully that helps.
  • Hi derek, and thanks for jumping in! I see you're a new-ish member, so welcome. We really appreciate you taking the time to share your expertise.

    Need help navigating? kirstie_h@edmunds.com - or send a private message by clicking on my name.

  • kbtkbt Posts: 27
    The reality is, that they only owe you what you can go out and buy the exact same vehicle for.

    derek533, I'm interested in this portion of your response. My husband's car was hit by a teen driver and after two weeks in the shop, the insurance company has decided to total it after all. The company is offering to pay the NADA value on his car; I don't have any idea how those run, so it may be more or less than we'll be able to replace the car, but when I specifically asked what happens if a like-configured/milage/condition car costs me more to purchase, I was told they will pay only up to the current value of the car.

    Had my husband been at fault, I'd have no issue with the "current value" being the basis for payout. However, he wasn't, so the idea that I might be out money on this deal is irking me beyond belief. This particular configuration was difficult enough to find the first time, when I had the luxury of time and bargaining; I'm not looking for a new car to replace one I purchased used, and I'm not trying to compensate for the hassle factor, though it's significant. I just want the car I wanted/bought 6 months ago, and I dont want to pay more for the privilege. Ugh. LOL!

    At any rate, I found your comment interesting since it's not quite what I'd heard. Also, I was unaware of the tag/tax/etc. issue, so now at least I know to ask about that. Thanks for your insights.
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