Car wreck/insurance questions

[Ezdaar]

I was recently hit by a drunk driver and the car is fairly beat up looking but all the damage is to the rear and a bit on the passenger side. The car is a late 90s Honda Civic with ~120k miles on it, running great. The insurance appraiser came out the other day and estimated the cost of repairs, all external body stuf, to be ~$6500 with about ~$3800 of that as labor costs. This is more than the car is worth so they want to call it a total loss. Having it as a total loss is a problem for the gf and I as we were just about to buy another car so we would have two cars, if they total it then we'll have to buy a new car and have one car and be back where we started but sans the money we saved for a second car.

What does one normally do in these situations? Is it possible to get a second appraiser to look at it or something? I've heard that insurance companies will often do this and then rebuild the car for a fraction of what they quoted and sell it again. If there isn't a way to get them to just repair it how does one get the best price for the total loss? The bluebook value on the car in excellent condition is $6600. It has been in a wreck before so the engine is actually from 2003.

Thanks for the help.

[jeffd]

How much are they going to give you for the car if they do go with "totaled"

[RickH]

How much are they going to give you for the car if they do go with "totaled"

Good question. It seems you assume you'll be taking a loss, but if they give you a decent settlement, it could easily equal trade-in value.

In any event, don't forget that you are negotiating and you don't have to do what they say.

[Nick Walter]

This all sounds very familiar, since I did this dance with the insurance companies a couple of times in college when I was driving old beaters. Here's a few tips for dealing with insurance companies in these circumstances.

1. Get your own estimates of the cost of repairs to give you some negotiating room with them. I think it goes without saying that the nicest places in town are where you want to get these.

2. The insurance companies will try to make you believe that they have the final say in how much money you will get. They do not. You ALWAYS have the right to refuse their offered settlement of the damages and instead sue the person who hit you to get a bigger amount if you think the amount can be justified to a court.

3. Going to court is expensive for insurance companies and they don't like to do it. If they think you are seriously going to go to court with them because you want some small amount more than they are offering then they will probably just give you some more money.

4. The drones from the insurance companies you are probably dealing with don't have the authority to blow their own noses. You need to say certain keywords to scare them and make them involve someone higher up with the authority to actually resolve your situation. Drop a few bombs like these on the drones:

"The loss of the vehicle has meant a loss of work for me, can we factor that into my claim?"

and

"Gosh, I'd love to settle this here and now but I just can't get an equivalent value replacement vehicle for that money, I hope I won't have to go to court on this"

and

"I've gotten my own estimates for the cost of the repairs and they differ significantly from yours, can we revisit your estimates?"

5. Do not, under any circumstances, sign your car over to them. Some insurance companies like to do this as part of the deal to consider a car totaled. Don't do it. Tell them you want to repair the car yourself as a project one of these days or something, but don't give them the car. If they object, tell them they can reduce your settlement by $50 or whatever local scrapyards pay for a junk car. That must be fair, because they are the ones who concluded the car was junk now right?

6. Look into your whether your state has a department that regulates insurance companies. They most likely do. See if you can file a complaint with them about how the insurance company is dicking you around or handling your claim process. I know at least in my state the insurance companies are very sensitive to those complaints because too many of them trigger some automatic regulatory audits and inspections that are a huge pain for the insurance company.

[ElGuapo]

Why would they get to keep the car? That's weak.

You should use it for shotgun practice in the backyard.

[RickH]

Why would they get to keep the car? That's weak.

So they can fix it and sell it to some chump.

Good stuff, Nick.

[CounterMeasure]

So they can fix it and sell it to some chump.


Yep, you can thank the insurance companies for the biggest majority of "salvaged title" cars out there.

[Rywill]

As always on the Internets, this is not legal advice, you're not my client, etc. I don't do civil work and you should call a lawyer if you want legal advice. This is my layperson opinion based on having worked for several years in the auto insurance industry.

In every insurance company I worked at, if the car was declared a total you could keep the car as long as you were willing to have its residual value deducted from your settlement. For example, if a wrecking yard would pay us $450 for the remains of your $3,500 car, you can either have a check for $3,500 (and sign the car over to us) or a check for $3,050 plus the car. If you want to get it fixed, that's your lookout (but don't come to us when you have to sink $5,000 into it to get it running again). The car will have a salvage title, but it sounds like yours already has that anyway so no big deal.

Are you dealing with your own insurance company (collision coverage) or the other guy's (liability coverage)? If you're using your own company, there are probably a lot of rules in your insurance policy that cover the questions you're asking. The company may have the absolute right to declare the car a total and pay you on that basis. Obviously you can get your own estimate of the damages (although at your own expense, and if the car isn't driveable the expense might be more than you expect). But the insurance company isn't required to accept your estimate over their own, and in fact probably won't. They are worried that some clever shop is going to deliberately lowball the estimate, get $2,000 into the repairs, and then say "Whoops, turns out there was some hidden damage, unavoidable cost overruns, etc., and now it's going to cost $4,500," when they could have totaled it for $3,500 (but now it's too late to go back because they already sunk two grand into it).

If you're dealing with the other guy's insurance, the only rules, ultimately, are civil tort laws. It's a much more wide-open and free-form negotiation, with neither side really having any right to demand much of anything from the other unless a lawsuit is filed (at least, that's how it works in CA).

1. Get your own estimates of the cost of repairs to give you some negotiating room with them. I think it goes without saying that the nicest places in town are where you want to get these.
Generally good advice, but if you are trying to keep your car from being totaled, you actually want lower estimates, not higher ones. Just keep in mind that if the shop won't actually fix it for the low estimate you're going to end up screwed (see above).

Drop a few bombs like these on the drones:
Unless you are dealing with a small insurance company or a brand-new adjuster, none of those bombs is going to make any difference. Insurance adjusters deal with dozens of folks like Nick and their "bombs" every month. If you think a sly allusion to the possibility of going to court is going to make an adjuster break out in a sweat, you are going to be pretty seriously disappointed. If you're dealing with your own insurance company (rather than the drunk guy's), most states have fairly strict protections against "bad faith" claims handling, and an allegation of bad faith will probably make them sit up and take notice. In California, and I think most other states, there is no bad faith protection if you are dealing with the other guy's insurance (or at least, there wasn't last time I checked).

5. Do not, under any circumstances, sign your car over to them.
This is just terrible advice. Dude, Nick, what up? There are lots of times -- the majority of the time -- when it's to your advantage to sign your TL over to the insurance company. Unless you think you can get a better deal from a junkyard than the supply-in-bulk insurance company can (and remember to factor in towing costs, storage fees, etc.), or unless you want to fix the car, sign it over.

[Rywill]

So they can fix it and sell it to some chump.
I worked at three different auto insurers, and none of them kept their salvaged cars. They sold them to a salvage yard. I assume the yard fixed some, and scrapped some, but the insurance company gets whatever salvage value the yard estimator agrees to pay. They have no control over what happens to the wreck and don't care.

[Rywill]

Last comments:

if they total it then we'll have to buy a new car
I assume you mean a new-to-you car. Obviously you do not have to buy a new-off-the-lot car, and the insurance company (whether it's yours or his) doesn't owe you for a new-off-the-lot car. They should be paying you the value of a 10-year-old Honda Civic with 120K miles and a salvage title (minus deductable, if it's your own company), which is unfortunately not going to be a lot -- but should be enough to buy you another high-mileage car with a salvage title. You won't have the assurance that it runs great like yours does, though.

The bluebook value on the car in excellent condition is $6600. It has been in a wreck before so the engine is actually from 2003.
Make sure the insurance company knows about the new engine (you'll probably need paperwork backing you up), that should add some real value. When you say "bluebook value," are you looking at high book or low book? Insurance companies generally won't (and don't have to) pay you high book (so called "retail value"), because that's what someone would have paid to get your car from a dealer. The amount they would have paid to get the car from you, off the street, is usually the lower value ("wholesale value"). Also, everyone thinks their car is in excellent condition. Almost no cars are actually in excellent condition. Excellent condition is for cars that have been garaged and meticulously cared for. Most cars are in "average" condition (that's why it's called "average"!). If you want the company to pay for your car being in extraordinarily pristine condition, you will have to be able to back that up. I wouldn't get my hopes up if I were you, though. Lastly, keep in mind that a salvage title is often a huge hit on a car's value, even for an older car like yours. I've seen cars devalue 50% when you add in the fact that they have a salvage title. Regular buyers avoid salvage cars like the plague, for the most part -- there's no shortage of late-90's Hondas without a salvage title.

[Nick Walter]

This is just terrible advice. Dude, Nick, what up? There are lots of times -- the majority of the time -- when it's to your advantage to sign your TL over to the insurance company. Unless you think you can get a better deal from a junkyard than the supply-in-bulk insurance company can (and remember to factor in towing costs, storage fees, etc.), or unless you want to fix the car, sign it over.

My advice was based on the specific circumstances of the OP. When a person is driving a beater and gets in a wreck, they generally don't mind doing the minimum necessary roadworthy repairs to keep driving the thing. So signing the car over is NOT the right thing to do, yet some insurance companies seem to pressure people to do that going by a few stories I've heard from friends. I don't know how serious the pressure was.

Oh I should add that my advice was all based on the assumption that the negotiations are between the cars owner and the other drivers insurance company since people rarely maintain full coverage insurance on autos with such a low value. As Rywill noted the rules are different for dealing with your own insurance company.

[Nick Walter]

They should be paying you the value of a 10-year-old Honda Civic with 120K miles and a salvage title.

Shouldn't they be paying him the value of a Honda Civic with a non salvage title since that's what he'd have to buy to be back to his pre-accident status? Is this because the car was in a previous accident?

I was just curious because a quick thread search shows nobody talking about salvage titles until you did so I'm wondering if there's some wrinkle here I'm missing.

[RickH]

Good stuff, Rywill.

[RickH]

I worked at three different auto insurers, and none of them kept their salvaged cars. They sold them to a salvage yard. I assume the yard fixed some, and scrapped some, but the insurance company gets whatever salvage value the yard estimator agrees to pay. They have no control over what happens to the wreck and don't care.

OK, so the downstream holder can sell it to some chump. Still sucks if you bought a car totaled in a Katrina flood.

[Flowers]

Be pleasant and return calls promptly until you get what you want.

[Nellie]

usual caveats. While I used to do total loss negotiation, it was in the UK and this is advice offered on an internet notice board.

1) insuarance companies are obligated to use brand new, genuine parts and have a book price for labour = huge price increase.

2) in the UK there are a few types of "total loss" ranging from simple 'it isn't worth fixing the car' to 'it's dangerous to put back on the road' to its a burn out. If it's the first case you can normally argue that you'll find the repairs through your own garage. The second is harder to argue, depending on the damage. The third, forget it, it's legally got to be crushed to prevent it getting back on the road again.
2b) If it's 'dangerous' to put back on the road then you can sometimes get it back, but you deduct the salvage value of the car from your claim, it gets marked as a "dangerous" total loss and you take full responsiblity for taking it back and getting it repaired to a proper standard.

3) If it's cosmetic damage you can normally ask for some quotes from local body shops. if they can get the quote (to go to the insurance company *hint*) under 75% of the book value of the car then the insurance company will normally let you have the car back and pay for the repairs.

4) If you get the repairs done be prepared for your car to be logged as a previous total loss which will seriously hurt its resale price

5) Bad repairs are spotted a mile away, if something happens again and an engineer goes to inspect it, they will notice a cheap repair, even on a burnt out wreck.

If you can't get a repair quote

1) Look at the equivalent of autotrader.co.uk for a similar condition car in your area. All car prices are based, in the uk, on something called Glasses Guide. That doesn't take into account regional variation. Some insurance companies, as standard, will only offer you 80% of the guide price to begin with but will up it if you argue and potentially will up it further if you can demonstrate that the local price for you car is higher.

but...
1) If you've spent loads of money on undeclared extras (body kits, alloys etc) be prepared to argue the case, total loss negotiators love nothing more than a £500 car that's had £5000 of body kits and alloys that weren't declared on the insurance. you can swap your alloys and your state of the art stereo for bog standard gear for the car in question, if in doubt go the scrap yard. A stereo is worth £50 to the insurance value, it doesn't matter whether it's what came with the car or the Ministry of Sound on wheels.

2) arguing that your 120,000 mile car is worth the same as a pristine 6,000 mile example will get you no-where, be realistic.

3) Find out what the book guide (Glasses) is called versus the public version (Parker's in the UK) the industry works on one, 'the public' work on the other and never the twain shall meet.

[Rywill]

I was just curious because a quick thread search shows nobody talking about salvage titles until you did so I'm wondering if there's some wrinkle here I'm missing.
I was assuming it had a salvage title because when it was six years old it was in a wreck that required replacing the engine. If it wasn't totaled in that wreck, though, forget what I said about a salvage title, and Nick is right: they owe you what it would cost to buy a 10-year-old Civic with 120K miles (and a 2003 engine), off the street.

[Ezdaar]

Thank you muchly for all the advice. I'm waiting to hear back from the actual adjuster about what they want to do. I don't think the car has a salvage title on it(the car belongs to my gf not me), the wreck that lead to the new engine was fixed by the insurance company and not ruled a total loss. I am currently dealing with our insurance company as we have comprehensive coverage for various reasons including many people down here not having insurance.

[Ezdaar]

Update: They are calling it a total loss and want to give us a value that is pretty much in line with the blue book value. The problem now is they want ~$1000 to buy it back from them. How does one make this value go down? If the car is a total loss why is the salvage worth so much?

[Moore]

Dude, if they are giving you 6500 or 6600 just buy another 120k mile honda with that money, forget the old one, you can find a decent used car for that price. Then buy yuour second car as planned.

[Rywill]

You just tell them you want them to charge you less. They may not go for it, but that's basically all you can do. For most insurers, all they are doing is passing on the bid they got from their salvage yard -- they don't care who keeps the car. But if you tell them you want to buy it back for $800, and the yard is willing to give them $1,000, what you're essentially doing is asking them to pay you $200 more than the damage is actually worth. That can be a tough sell, but they might go for it just because they want to keep you happy and don't want to get involved in a long, drawn-out process over a couple hundred bucks. Every day the case stays open costs them a little money.

As for why the salvage is worth so much, who knows. My guess would be that it's because you were rear-ended, so the 2003 engine is probably mostly intact, and that's worth some cash. Or maybe the yard thinks it can fix the car (or even graft a new back-end onto it) and sell it.

[Ezdaar]

Thanks for the advice Rywill, I figured that was about it.

They are offering ~$4900 for the payout, which is about in line with the private party blue book value. After talking with the gf and going through all the past records it looks like the engine wasn't actually replaced so that isn't a factor. So minus the salvage it would be about $3900 to us and a beat up car that at the very least needs a new tail light and bumper.