Not backpacking related but...My wife was in a car accident recently and based on the damage its likely that the insurance is going to scrap the car and call it a total loss. Its an older Honda Civic and the damage is pretty extensive. I was wondering if anyone has experience dealing with a car insurance company and a total loss of a vehicle. I could use some advice on how to deal with the insurance company.

Hi Jeff,

Hope your wife's okay!

Who was at fault and whose insurance is paying? No matter which, expect to be offered a low settlement value, which you're free to counteroffer. Above all, don't be in a hurry.

Lots of good info, here:

http://www.insurance.ca.gov/0100-consumers/0060-information-guides/0010-automobile/

Good luck,

Rick

Edited by halfturbo on 02/10/2011 13:14:28 MST.

Thanks for the link Rick. Wife is doing great. It was a little scary because she's 6 months pregnant, but mom and baby are alright. The other driver was at fault and its likely that their insurance will be paying. They're still investigating but its a pretty clear cut case. I just want to make sure I have my ducks in a row when I need to start negotiating because I know they'll start out low. So far I'm just researching what the car is going for in the local market.

Edited by catalyst81 on 02/08/2011 14:05:09 MST.

Jeff - glad to hear your wife is okay.

On Jan 12th, my wife was t-boned in our van with two kids aboard. They were all okay but the side power door was very damaged. However, the van still drove just fine. We just used the other door.....

In any event, because the estimate to fix was over 75% of the market value of the van, they are writing it off. Let me be clear. It still drives.

It is an age issue - a 2002 Honda Odyssey with 190K KM. We were shocked but happy with the payout as it was based on local market conditions and was higher than we expected. I wasn't too happy about having to purchase another family unit so soon but again, the market price was reasonable.

I can't specifically comment on your situation because local insurance laws may differ. I am in Alberta, Canada for frame of reference.

Jeff:

My wife and I have been through this twice in the last 4 years (both times the other drivers fault). The insurance company uses software to do just what you are doing -- survey the market to find the range of values for your car for your area (every company in the US uses the same software).

Make them give you a list of the cars they are using to determine what they will pay for property loss, and make sure that the specs match your vehicle. Be sure to add the value of any special options your car might have.

There should also be a separate payment for "pain and suffering" that will be some multiple of any medical bills, lost time from work, etc.

Edited by jdw01776 on 02/08/2011 14:39:43 MST.

Hi Jeff,

That is good news indeed. Wow, that must have been gut-wrenching for everybody.

Your insurance company should be taking the lead with gathering the police report and going after the other insurance company. If you've been assigned a case manager, stay in consistent contact with that person to ensure they're working aggressively towards a settlement--squeaky wheel and all. Believe me, the other company will be motivated to settle given their client hit a pregnant woman. Can you imagine what would happen to them in court? (Come to think of it, some pics of your wife and the car wouldn't be a bad idea.)

Best wishes,

Rick

Its nice to hear about other people's experiences. Just found out from our insurance that the other company is accepting 100% liability. So that's good. I'll be contacting them tomorrow. I'm guessing they'll have the car inspected, so I'll take it from there. I'm hoping that it doesn't get totaled, but its older ('98 civic), so there's a good chance it will.

I do this as part of my work. Once they accept liability, expect them to make an offer based on fair market value, at least in most states. NADA has a website and can give you a decent estimate. Also make sure you ask them to pay for loss of use(ie rental car) from the time of the wreck through the time it should take you to replace it. Even if you don't get a rental, they will often pay for it.

If it is totalled, but you still want to fix it, they will likely sell the salvaged vehicle to you for a few hundred dollars.

If you have done any major work recently like an engine rebuild, trans rebuild , or in my case new catalytic converter, raise this issue once you've received an offer. You will have to produce receipts but I managed to increase my settlement for the full price of the parts and labor. On the negative side of the equation I was unable to find an equally good truck because my 81 toyota pickup was a long bed with a one ton axle I put in it that Toyota scrapped to make more $ with their bloated Tundras and the T100. There are professional negotiators who can help you in these cases. And I wouldn't settle any medical claims very soon . Sometimes things develop well after the fact.

Assuming the other driver was at fault, you might also be do some pain and suffering money. When my car got totaled by a drunk driver (in 1995), my father and I each got $1000, despite only having minimal injuries (a burn for me and some back pain for my father). But I think that the stress alone was worth at least that much money.

If the other driver's insurance company doesn't offer, you could ask. And if they say no at first, it wouldn't hurt to intimate that a lawsuit might be coming. The stress of going through a bad accident and having to replace your car, even if there are no injuries, should be worth something.

Ben Crocker's advice re salvage can be a very worthwhile option. I had a "friend" whose Tacoma was totaled a few years back and the other drivers co. ( All-State ) refused to pay the amount necessary to effect a complete repair in this market ( came up @ $1500.00 short ) and when he insisted the payment proposed was not adequate the insurance co. said take it or we'll total it. He was advised by a friend very knowledgeable in auto insurance claims to take the total payment and salvage the vehicle ( buy it from the insurance co. Once the company put forward a total payment he called and got the salvage value which was a fraction of the Total value and substantially lower than the $ to repair + the salvage value. In this case the vehicle was not "mortally" injured but rather cosmetically and he was able to have it perfectly repaired in a different market for about half the original repair estimate. If the chassis or drive train has been damaged or you have a good mechanic friend who gives repair the thumbs down then forget this plus you may not be able to work out the repair/salvage on favorable terms but it in this case it changed the situation quite favorably from a losing deal to a very nice winning deal.

Another thing that could help in your case and in fact has helped in many pretty high dollar negotiations I've been involved in is to do nothing at least as far as initiating discussions or even responding to the other side's offers until you absolutely must; especially in a case like this where there's only the 2 of you and no 3rd parties; all the while carefully examining your options. It's amazing how people will in effect negotiate against themselves by for example upping their own original offers when you simply don't respond. Plus big insurance companies are under pressure to get cases closed and move on AND they also have that per diem meter running on paying for your daily transportation expenses while they try to get you to settle for less. Hey maybe they'll pay you fairly......... yeah right.. Also good advice on "settling' or waiving rights to a future medical claim.

And then comes actual litigation. In the case of my wife, T-boned while a visiting driver timed some lights and freely admitted fault we still has to hire a personal injury lawyer because my wife's injury fell into the nexus of fibromyalgia a "soft injury case" effectively stonewalled by the defense.I have a legal background. They lost we won but they were as sleazy as possible. We were adopting at the time and they used our medical records to assail every possible motive we could have had. I'm disgusted with the process. My advice to you is to release no information, hire a defense attorney and prepare for the worst. If I'm wrong well congrats. If I'm right , then pass it on.

Edited by Meander on 02/08/2011 20:55:20 MST.

The problem with buying the asset back through salvage is that it will always have the history of being written off, even if re-certified. If resale is a consideration, this may be an issue.

Jeff,

I am an insurance agent with AAA and I used to be a claims adjuster with AAA.

Some advice for you on settling your claim.

1. I would opt to go through your own policy, assuming you have collision coverage.

When you go through the other insurance company for either repairs or a total loss settlement, you are treated differently as a claimant vs. insured. Basically, if you are the claimant against the other responsible person's policy...that insurance company's sole obligation is to their client, not you. Example: If you have your car repaired through the other person's insurance policy, the other insurance company will have you sign a Release of All Liability form before they give you a check for the cost of the repair and rental car that you might need while your car is in the shop. Once you accept the check and sign the form, you have no recourse for futher assistance. Example: 4 months after the car is repaired, you hear a rattle in the car and take it back the shop that fixed the car. If the rattle is found to be related to the accident, then you have to pay for additional repairs out of pocket.....no option to go back to the other insurance company. If you had gone through your own insurance policy via the Collision coverage, your insurance company may have the ability to reopen your claim and pay additional money to fix your car. (This is what our policy would do). Bottom line, your own policy may have guarantees for you for work done on your vehicle. (Often this guarantee applies if you use a body shop recommended by your insurance company vs. one that you pick). Note: going through your own policy may have the issue that you have to pay your deductible and then seek reimbursement for your deductible once your insurance company recovers all the money that they spend on fixing your car and setting you up with a rental car...process called subrogation. Again, bottom line....when your insurance company gets their money back, you can get your deductible back.

2. Issues of Total Loss vs. Getting Repaired

Often, if the initial estimate for the repair of your car is 50% or more of the market value of your car, it is likely that the insurance company is going to start thinking about totaling your car vs. fixing it. (This percentage could be higher before they consider totaling the car if the value of the car is significant, such as an $80k vehicle). Reason for this, it is very common that once the repairs are done and panels are removed from your car, there will be additional damage found and would increase the cost of the repair. An insurance company does not want to get into a situation where they know that the damage is 50% min and then after the work is done that that cost balloons to 80% of value and there might be issues if the vehicle will still be safe for you to drive. Bottom line, your claims adjuster will be working with the body shop and checking their computer systems, which has labor rates and materials cost based on your Zip Code to determine how much the cost of the repairs might run vs. value of vehicle.

3. What do you do if the vehicle is deemed a total loss and options?

Two options for a total loss....you get ACV (Actual Cash Value/market value) of your vehicle, less any collision deductible and you get a check from your insurance company you sign paperwork essentially selling your car to your insurance company and they dispose of the vehicle for you. Other option is for you to retain the car, but the registrations will be branded/listed as a Salvage vehicle. Having Salvage Title will greatly reduce any possible resale value of the car, as it lets any potential buying know that your car has suffered significant damage in the past. Bottom line, your resale value is going to be significantly lower than any BLUE BOOK value.

If you want to keep your car in it's damaged state here is how the math would work:

Let's say your ACV/Market Value is $3500.00 for the vehicle.

The Salvage value (value of the car in its damaged state) is $1500.00

Your Deductible is $500.00

$3500.00 less $1500.00 (because you are keeping the car) less $500 Deductible =

$1500.00 Check in your pocket with possible $500 more back if your insurance company collects all the money back that they spent on you & your deductible.

Hope that makes sense.

4. What to do to prepare for a possible Total Loss

Remove all your valuables from your car that you would want to keep because it maybe towed from the body shop to be scrapped. Better to get your stuff out vs. chasing the car down to another city, depending on where the insurance company disposes of its cars.

Start researching your local news paper, LOCAL craigslist for real cars available for sale in your area that same make, model, year...approximate same mileage. Your insurance company will provide you with what it thinks is a good/fair value for your car. If you disagree and want more money, you need to have some evidence of why they should give you more money. They can send someone out to look at the comparable cars for sale that you found to make sure it is not better than your car. Just realize that often what someone ask for in an ad is not what it would sell for, but it is a starting point.


Lastly....

If there were any injuries in the accident, you will have a Bodily Injury claim against the other insurance company for medical bills, lost wages, pain and suffering. Your insurance company can not help you legally pursue the other party. They can help defend you from a lawsuit, but not help you go after someone else.

In CA, the statue of limitation for settling an injury claim is 2 years, but you might want to check with your company about the laws where you are.

I have not been in claims for 12.5 years....been an agent for the past 12.5 years.

Hope this helps you out and please feel free to ask me any questions.

-Tony

Thanks for the info everyone. My insurance directed me to contact the other insurance company since they are accepting full liability. Before that happened, I had the car inspected with a shop my insurance company recommended. After the inspection the guy who inspected it told me that mercury would likely total the car based on the damage and cost of repair and recommended I start looking up values of similar cars in the area to make sure I get a good settlement.

I've contacted the other insurance company to get everything settled. They're paying for a rental and have asked me to get the car inspected. I'm guessing they'll come to the same conclusion and total the car. Its an older car and there's a lot of damage. I'd rather just negotiate with the insurance regarding the actual cash value of the car rather than have it fixed or buy it back from them and fix it.

I've already been researching the value of similar cars in the area, so it seems I'm on the right track. The other insurance company said a "medical" claims adjuster would be contacting us regarding my wife's injuries. I'll be careful with them because I'm sure they're looking to make a small pay out and limit liability. Right now my wife is going to the chiropractor and getting massages due to soreness and some back pain.

Filing a lawsuit will be a last resort decision. I'm an attorney and can handle that if I need to, but I'd rather not take it that far.

Tony; all that and great trip reports too! I loved the report on Deadmans.

David, (and Tony) You are certainly correct re: the title reflecting salvage and a total loss. I meant to add this in the earlier but forgot. Always felt like this was a cheap shot from the Insurance Co (and State) since in my case the damage was totally cosmetic. My Tacoma at the time was 9 years old and had @ 50K miles and was in mint condition so the total loss wasn't a true reflection of the value; but then I was being shorted on the repair. The salvage was the only thing kept it from being a bad loss but since I really like that vehicle and plan to drive it till the wheels fall off things worked out though every year when I renew the registration and get that total loss/ salvage registration it's like a little pinprick of a reminder.

Jeff,

The good thing is that the other carrier has accepted liability.

I believe that in the case of children that are injuried in an accident, the statute for time for a claim is extended to the age of 18.

Does not sound like you have anything serious, but thought I would add what I think I know.

If the other company is smart, they should take care of you and make you happy on the loss of your car, given that your wife is pregnant.

Good luck to you on your claim.

Cola,

Glad you liked the Trip Report....Deadman Canyon was an amazing place.

If you can get out there, it is worth it.

As for your claim, seems odd that they totalled the vehicle, unless it simply depreciated like crazy. You had low mileage and it was in good shape. That said, if you had multiple panels of your car damaged, the cost can sky rocket.

Last year, we had a client jump the curb with a X5 BMW and hit our building- wedgeing the car between our building and a column.

Both sides of the car were scrapped up pretty good....mechanically, the vehicle was sound but it was a total loss.

-Tony

-Tony

Edited by Valshar on 02/10/2011 14:20:41 MST.

I’m glad all’s well with your wife. Please make sure to add the cost of her medical tests post this accident to your claims bill. Also, any car rental, and wages lost due to her being away from work. Car insurance companies certainly expect all these to form part of your claim anyways though they might not be very forthcoming with the information initially.

Edited by walker.kenny73 on 02/27/2011 23:17:39 MST.