Questions About Auto Insurance and Accidents

michaellno · March 2013

I think you'll get somewhere in the neighborhood of your $7500 purchase price ... assuming that you paid market value.

I had something like this happen to me about 10 years ago. Son turned 16 and we bought him a used Geo Tracker. 60K miles, owned by a retired GM executive, perfect condition. Paid $8K.

5 weeks later son totals car in a self-inflicted accident (speed + dirt road = ouch!).

Insurance company paid us ... you guessed it ... $8K. We had to eat the sales tax paid.

Insurance company doesn't care what you paid for the car, nor the value of the trade it. It's worth what it's worth. As noted above, you can negotiate the value of the settlement but unless you can prove to the insurance company that a replacement will cost $8400, you're somewhat out of luck.

Check craigslist, ebay and cars.com and see what your car is worth on the open market. That might help in getting a higher number.

tba2 · March 2013

Good stuff Michaell. I'll do just that..
Thanks again very much.
Oh, and sorry about your accident as well.

michaellno · March 2013

Best of luck ... check back in and let us all know how it turned out.

tba2 · March 2013

I'll know more once we find out IF she has insurance at all.
If she DOES..then I think my insurance company will go after everything.
If she doesn't...
Then MINE will try to get by with the least they can.
I just want to make an informed decision when they throw a settlement at me, and not just say
'ok, thats fine man, whatever is good with me.'

Kirstie_H · March 2013

OK, your clarification post makes more sense. But, when you go into negotiations (if you have to), leave the traded-in car out of it, because it has nothing to do with your settlement. The insurance company just views that as a car you no longer own and don't have an insurable interest in.

What they do care about is the market value of the vehicle you bought, which appears to be the total price you paid, including the downpayment, which was the trade-in value of your former vehicle. The insurance company doesn't care whether you paid a cash downpayment, credit card downpayment, trade-in payment, or with a lifetime supply of sea monkeys. They don't even really care what you paid for the car - only what it was worth at the time of the accident.

However, unless you grossly overpaid, it's a good indication of what replacement cost will be for you. Like Michaell said, find listings for similar vehicles on the market right now.

Depending on what company you use, you might be pleasantly surprised by their offer. When my vehicle was totaled a couple of years ago, the insurance company offered the highest retail value they could find, and it was no way, no how worth as much as they gave me.

tba2 · March 2013

Ok, Kirstie, that makes sense as well. He had $7,900.00 on the sticker when I went to see it. We negotiated down from there.
Like I said the NADA is $7,200.00.
But, that makes sense about presenting from a 'retail value' rather than a 'traded in car' value.
Nothing can place value on the MINT PERFECT condition it was in though...and low miles.
I don't think?

explorerx4 · March 2013

Whatever they give you for the car, I think they will add the sales tax on top of that, or the number will include the sales tax.
It's possible that varies by state.

tba2 · March 2013

I'll have to remember that. I'd never have thought to think in that direction.
Again..I'm a newbie at totalled vehicles.
This forum has already turned out to be really helpful!

andres3 · March 2013

In CA sales tax is part of the value of the car, as it is part of the cost of replacement.

Unfortunately, License fees are refunded by the DMW at about 75 cents on the dollar, as right after paying for annual taxes I had a car totaled, and somehow seemed to get refunded an amount that cost me prorated 3 months worth for 2 weeks of use. I was mad! :mad:

Having your car valued at "excellent condition" makes up for the "mint" condition. Excellent is a high standard.

andres3 · March 2013

Insurance companies don't take anything personally, and therefore, nor should you. They don't pump their fists when they short-change you, nor do they hang their heads in defeat when you best them. They only care that at the end of the year, there's black ink, not red ink.

That may be, but there are certainly insurance companies in CA operating with a standard OP (operation procedure) to act in bad faith on every claim ever presented to them.

Mr_Shiftright · March 2013

Not sure what you mean, but in CA you settle on the value of the car, and then sales tax and license fees are added onto that. Tax and license are not part of the quoted settlement.

So if they settle for say $7500, in CA, then you can figure an additional 10% or so on top of that.

I don't know all the state insurance laws but the insurance agent certainly does.

It is very sucky indeed that the victim ends up possibly being short-changed, but then, insurance companies have ended up writing most of the insurance laws, so there you go....

houdini1 · March 2013

I had a similar experience to Michaell's. My son totaled a new 1993 Mazda MX6 about 2 weeks into ownership. Sweet car too.

I was very pleasantly surprised when the insurance company also reimbursed us for the sales tax we had paid. This was several years ago and things may have changed, but I think you still have a chance.

In many states, you don't pay the sales tax to the dealer, you pay your sales tax directly to the state when you tag the car. Your accident happened so quickly it brings up the question, has the dealer already paid the sales tax or not? And does he have to now? Might make a difference. Just thinking out loud here.

euphonium · March 2013

" has the dealer already paid the sales tax or not? And does he have to now? "

The dealer is obligated to pay the ST as there was a sale. Consider it a "transaction" tax.

driver228 · March 2013

Kristi, I just bought a new 2013 Avalon XLE. Traded in my 2004 Infiniti QX56...Should I expect my car insurance to go up or down. I have great driving record/no accidents.

Kirstie_H · March 2013

I'm not an insurance expert by any means, so you should put more credibility on the responses of others. However, I can share my personal experience of driving and having insurance for 30 years - your insurance will probably go up if you have comprehensive insurance in addition to collision. Comprehensive is the portion that pays you the value of your vehicle in the event that it's' totaled, or the portion that pays for the repairs on your vehicle in the event of an accident - assuming you are at-fault.

Every time I've had a newer vehicle, comprehensive goes up because the value of my vehicle is higher. Every time I've traded for an older vehicle, comprehensive goes down. Your driving record is factored into the rate that you already pay, and whatever discount you get (as a percentage) won't change based on your vehicle. Options in your newer vehicle may lower your premiums - if, for example, your newer vehicle has more safety features, those may be factored into the premium you pay.

As I mentioned, there are plenty of members here who are more knowledgeable, so if you get responses from them, they're likely to be more helpful and accurate.

euphonium · March 2013

Comprehensive is the portion that pays you the value of your vehicle in the event that it's' totaled, or the portion that pays for the repairs on your vehicle in the event of an accident

If collision is the cause of the total, comprehensive does not enter into the equation.
Comprehensive is a term to include most other causes of trama to the vehicle other than collision that happens suddenly and accidentally. Some hazards: Fire, theft, vandalism, falling objects, flood, earthquake, animal collision, glass breakage, but not inherent vice or gradual deterioration.

Premium for Comp & Collision will rise according to the value of the vehicle.

igozoomzoom · March 2013

I'm an insurance agent in Georgia, so I can offer a little insight. But the reality is that rates vary greatly from one car to another with each different insurer.

The Comp and Collision rates will probably increase slightly, but I wouldn't expect it to be more than $100 or so more per year. The reason is simple math- your 2013 is worth more than your 2004. If you total it, it will cost them more. Their exposure risk is increased, so your rate is increased.

The Liability portion of your policy will very likely go down a bit. You are far less likely to cause a high dollar accident in a full-size sedan than in a massive, uber-tank SUV!

Overall, I suspect you will see an increase of less than $100 per year total. If you don't mind, let us know when you find out. I'm curious.

My mom bought a new 2013 Mazda CX-9 (large Crossover/SUV) to replace her 2007 Ford Explorer last year. Her premium increase was only $23 per year.

michaellno · March 2013

A few weeks ago we considered trading in our 2010 Mazda CX-7 for a 2013 Nissan Juke SL AWD.

Called my insurance agent to see what the difference would be for insurance - no changes in coverage or deductibles.

The Juke would have been about $45 cheaper, per year, than the Mazda.

Go figure.

Wife didn't love the Juke, so we didn't pull the trigger.

tba2 · March 2013

Just to update this situation:
I found out today that she does have insurance, State Farm. She just called.
I am having our Jeep towed to a repair shop to get an estimate on repairs. It's in such mint condition, I'd really like to keep it, if possible.
With both air bags deployed, I'm sure it'll be totaled by the adjuster.
So, if the numbers are right, I'll have it fixed.
If it's too far gone, then that's ok too.
Just want to give the Jeep a chance.
It's a beauty.

michaellno · March 2013

With both air bags deployed, I'm sure it'll be totaled by the adjuster.

That's not a guarantee one way or the other, frankly.

Most insurance companies have a threshold where the cost of repairs are too much based on the value of the car. That's when you'll get notified that they want to total it.

If the car is worth, say $7500, and the threshold is 60% (just a number - don't know what it really is), then if the repairs are going to cost more than 60% of $7500 - $4500 - they'll let you know.

Good to know the other party was insured.

EDIT - did you choose the repair shop? You should have that right, based on state law.

I was backed into in a private parking lot last year. Guy wanted to give me a few hundred cash since the damage wasn't major. I told him no, that I wanted to get an estimate from my body shop. Guy was horrified to learn that the estimate was $1100. He swore that his "buddy" could fix the car for much less.

I told him he had 48 hours to either A) come up with the $1100, or

call his insurance company. After 48 hours I told him i would call my insurance company and file a claim. His insurance company called me the next day and wanted their adjuster to review the damage.

Turns out their adjuster knows my body shop real well. The revised estimate was something like $950 - only difference was the cost of the pinstriping, I think. I took a check from them and didn't fix the car - hey, it's an '06 Saturn with a bunch of miles on it that I use only for pizza delivery.

BTW - Saturns do dent, it turns out.

Mr_Shiftright · March 2013

You can also accept the settlement for the total and then buy the Jeep back (if they'll sell it to you) and have it fixed. I don't recommend it but some people do that, usually by shopping for used parts.

tba2 · March 2013

On the airbags...I was just going by what MY adjuster said on the phone; that if both were deployed he'd total it. That said, the other insurance adjuster was a lot more friendly than mine. lol.
Yes, I chose the repair shop. I've had a lot of work done there and he's the absolute best in town.
I just got off the phone with the shop and it got there too late for them to get an estimate. (it's Friday!) That's fine.
But, he's the owner, and he said he walked out and looked at it and said actually, the damage was not as bad as he would have thought it would be.
We'll know more Monday. He did comment on what exceptional shape it's in and he understands me wanting to keep it.
I told him I wasn't sure how all of this worked but the bottom line is I have $8400.00 tied up in that Jeep. I don't know about percentages, allocations, insurance red tape.
I just want my Jeep back exactly (as possible) like it was.
He seemed to think, especially since the other vehicle was there, and he was dealing with both at the same company, that he can make this work out.
He also said since we had only had it 3 days, he had worked with this insurance company a lot, and my asking for it to be fixed..based on the total of my $8400.00 investment...would be honored by her insurance company.
So we'll see I guess. I feel good about it.
I guess I feel good in knowing I'm doing what I can to make a bad situation right..and yes, I want to get behind of that fine Jeep again. I'm thinking I'll keep it and get my son something else. Save the miles on my diesel truck.

Hate it about your Saturn buddy. Those are pretty good rides though.">

Kirstie_H · April 2013

Thanks for the clarification. Somehow when I was writing all of that, I was thinking of the diff between liability only, and comp & collision coverage.

tba2 · April 2013

The estimated to repair it is $11,000.00
Seeing as the NADA is $7,200.00, I guess it'll have to be totaled.
And this just totally hacks me off.
'Be glad your family is ok! So sorry for you. Hate it for you. That's what insurance is for.'
I mean, I've just never dealt with this.
Just seems so wrong some peabrained lady can just TOTALLY mess something up, and now not only do I loose something I was so proud of....
I gotta start allllll over finding another vehicle. All of my time lost, all of my dealings.
Ain't right.
I know, that's whining...but it is what it is.

But I don't have to like it.

andres3 · April 2013

I gotta start allllll over finding another vehicle. All of my time lost, all of my dealings.
Ain't right.
I know, that's whining...but it is what it is.

I don't think it's whining. I think people should be more careful, as 99.8% of accidents aren't really accidents, but perhaps should be called "negligents" and "incompetents."

That being said, you should go after every penny against that ladies insurance company:

I'd be claiming the following:

1) equivalent rental car (jeep or equivalent) while you look for a new vehicle up to 3 weeks.

2) Lost time and purchasing research at $50/hour (approximately what? maybe 12 hours?).

For the amount you get you should be able to find a very similar jeep.

Mr_Shiftright · April 2013

that's not going to happen.

you might get a car rental through your OWN company,however.

As for the final settlement, as I mentioned, you can fight it out.

Have they given you a firm offer yet?

andres3 · April 2013

#1 can happen, I agree #2 is asking maybe a bit too much.

I've received rentals from the "at-fault" insurance company before.

You have to insist that the rental isn't a "Kia Rio" to replace your "nice" car, and they will resist, but you must resist equally forcefully in the opposite direction. There is no logical reason you should have to put up with a "lesser" vehicle, even temporarily.

3 weeks may be a bit much, I would rush and wouldn't push it much past a week.

euphonium · April 2013

Sounds like "crying in his beer". Insurance should not cover claimants lost time - his clock wasn't damaged. Rental car is to be provided until the adverse company makes a reasonable offer to settle.

Inconvenience is not to be considered or covered - that's life - man up.

Purchasing research at $50/hour is not property damage, but resultant expense not directly connected to the impact. :P

tba2 · April 2013

Yikes. No need to get ugly dude.
And, sorry your job as an advice columnist didn't work out.

marsha7 · April 2013

Yeah, you will NOT be compensated for your lost time looking for a replacement car, ya gotta just accept it...I know it hurts to lose a car you liked so much, but there is no value to sentimentality, at least in auto wreck negotiations...

In GA, if your car is repaired, you get a rental car, generally, for as long as the shop deprives you of your vehicle...if your car is totalled, they will usually only give you 3-5 days of a rental, since totalling your car is the functional equivalent of simply buying your car from you...

kyfdx · April 2013

I consider shopping for a car to be entertainment... :P

tba2 · April 2013

Normally, yes...well, maybe. lol.
But in THAT span of 5 days:
-The wife's van died (it was an expected death..it was in autohospice, painless but it had lived a good life).
-Our clothes drier died (completely unexpected) and we had to order one that took a 5 days to get here. We rack dried stuff for that 5 days. Crispy dried clothes and towels was weird.
-My wife's mom had to have emergency surgery and they found cancer. Her father already has had a stroke and needed her mom to care for him, now she and the other kids are having to care for them both. Our local Enterprise was OUT of cars that day of the wreck. She is driving the in laws van for right now.
-My son's Playstation 3 died (unexpected)
These are just the abnormal things that happened, in addition to the normal life things that get sideways.
And then, the perfect vehicle I'd been looking for showed up! Been used by an ole lady for church/Walmart for 10 years then back in the garage, with only 97K on it. PERFECT/shiny mint condition.

And then, 2.5 days later, it's totaled because this lady frank pulls right out in front of my wife on a bypass, 2 more foot and she'd have tboned the woman at 55 MPH in driver her door.
So...yes, normally I like the car looking thing.
Not so much at this point though.
So, join me for a whiney beer!! (or two)

stever · April 2013

Ouch, lots of grief to deal with in a short time. :sick:

The trick to drying clothes on the line is to take them down when they are first "dry". If you let them hang around they turn to corrugated cardboard. I do mine that way in the basement, but then again, I'm ~~cheap~~ frugal.

That reminds me, my insurance is due and it's been a year since I got quotes.

tba2 · April 2013

Good stuff!
Thanks man for the clothes dryer advice.
Corrugated cardboard was weird underwear. :shades:

imidazol97 · April 2013

You've had a really bad run of events. You have my sympathy about trying to handle all that.

>Corrugated cardboard was weird underwear.

Talking about underwear, check out this latest use for old underwear: shoes from Jockey.

kyfdx · April 2013

I'm going to guess that the ad came out on April 1st?

imidazol97 · April 2013

>April 1st?

Right. That won my belly laugh of the day award--after I realized it was a joke. I read into the link for a minute before I caught on. But my toes were cringing at the thought of being inside someone else's old underwear.

tba2 · April 2013

haha, that's good stuff.
That came out the same day that Redbox sent me an email that they were now selling bologna/ham/swiss cheese in their kiosks. LOL.
I needed that laugh.

andres3 · April 2013

The correlation between "no fault" States and extremely high costs versus States with at-fault policies, that have extremely low costs for insurance?

It doesn't take a rocket scientist to figure out that would happen. If there's little consequence to causing accidents, then people won't care and therefore you have more accidents. Sometimes I think 5% of the drivers are causing 95% of the wrecks; any data on that?

stever · April 2013

Michigan is no fault and the rates are awful.

Michigan Tops Another Auto-Insurance Cost List (SB Wire)

Idaho is a "comparative negligence" state and our insurance was about half there - same vehicles, just older now (as are the drivers :shades: ).

Mr_Shiftright · April 2013

Here in CA, I pretty much plan on keeping comp/collision forever on my car, because my odds of being hit by an uninsured motorists are high in some areas --estimates vary from 10% to 65% uninsured. I read one report that suggests 90% in some parts of some cities, but that sounds insane. :surprise:

euphonium · April 2013

Compare the cost of Collision to the premium for Underinsured Motorist Property Damage Liability. The latter may be a lot less, yet still provide coverage for fixing your car due to an uninsured driver.

Mr_Shiftright · April 2013

yes I thought of that but the conventional wisdom seems to say "well if you have comp/collision you don't need UMPD". But in CA, comp/coll is quite expensive, so maybe you have a good idea there.

There comes a point at which a car might not worth enough to carry comp/coll. We've had this discussion before as to what that value might be (when to drop comp/coll) but we never reached a consensus.

IIRC, some of us thought around $5000 or less for the car's value.

kyfdx · April 2013

Full coverage on an "extra" car with a value of around $4000 is only about $350/yr total for us.... no point in dropping full coverage once its gets that cheap.....

tommister2 · April 2013

Same here. Full coverage on my extra vehicle (a 1994 Jeep Wrangler) is only a few hundred per year and most of that is liability which I'm required to have anyway. The Jeep is worth about $3500. I'd rather pay the premiums and get (or hope to get) the insurance money if the Jeep is totalled, than not pay and just have a crashed Jeep. :sick:

andres3 · April 2013

10 years ago (the last time I checked), that UMPD coverage if you didn't have collision was limited to $3,500. Perfect if your old car is worth about that much.

Of course, if your agent forgets to check the UMPD box and only puts you down for UM-L, then you get shafted by your insurance company.

Kirstie_H · April 2013

If that happens, I suggest you find a better agent, and quickly. If that actually HAS happened to you, I think you've set the record for people I know who've been shafted by the most companies. If you need a better agent, I'm sure we can recommend one!

andres3 · April 2013

Oh it was over 10 years ago and I never looked back. I quickly never used that agent again. Don't know why they were so nasty, I'm sure they had errors and omissions insurance to cover such mistakes, don't understand why they had to be so corrupt, dishonest, and plain nasty.

euphonium · April 2013

Over 15 years ago E & O prevention among the professional agents had the applicants sign an agreement that the coverage was offered, but rejected by the insured.
Insurance is intended to prevent a financial catastrophe, not cover maintenence losses so carry high limits of Liability and high deductibles.

marsha7 · April 2013

reason for U/M is for the bodily injury portion...so, if you get injured by an uninsured or underinsured (low limits of liability) motorist, you have coverage to compensate you for injuries, pain and suffering, simply because you bought the policy to cover THEM, those uninsured worthless people...:):):)

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