Car Crash and Insurance Company. What to do?

Question

I was in a pretty bad car accident in which my car was violently rear-ended, and the police found the other party at fault. The car is pretty darn bad, but technically reparable. There were some injuries from the people in my vehicle.

The car is worth about $15,000 according to Kelley Blue Book (Toyota Yaris, almost a year old with approximately 11,000 miles). The place chosen by the other party's insurance company gave the estimate for fixing the car to be between $10,000 and $11,000. Because that's more than half the value of the car, said insurance company wants to declare it totaled, and (despite it being reparable) wants to pay us the value of the car instead of just paying to repair it, probably because if they don't fix it, they get to auction it for parts (almost all of which are fine, just the frame, doors and seats were messed up it seems) and keep the money. They're also trying to tell us that the car is worth about $2,000 less than it actually is.

Answer 1

Simple answer: No.

The insurance company has every right legally to do what is more cost effective- give you actual cash value of your car or repairing it.  No amount of whining, complaining, threatening of attorneys will change that.

Answer 2

I second Luna and Cowboy. They pretty well summed it up.

No insurance uses Kelly Blue Book. The industry standard is the NADA (National Automobile Dealers Association) book.  Their web site: www.nadaguides.com

In general, Kelly Blue Book values are inflated. If you read the fine print - the KBB says the value is the suggested asking price - not what the vehicle will actually sell for- it's value is a starting point for negotiations and includes the cost of advertising, warranty, sales commission.

As far as your car goes.....did you buy gap coverage when you purchased the vehicle? If so, you may not end up owing anything at all.

State Law mandates when a vehicle is a total loss. The insurance company is just following the law.  With an initial estimate of 11,000  - there will be a supplement for additional damage once that car is torn down.

You can chose to purchase the salvaged value back from the insurance company. It will cost you about 25-30% of the vehicles value and you will get a salvage title, the car and 70-75% of what you would get paid if you let the insurance company have the car. At that point, if you want to fix it or use it as a lawn ornament is your choice. The insurance company will NOT pay more than the 70-75% so if the car repairs exceed what they paid you - you have to pay that out of pocket.  Once the car is repaired - your title will have a rebuilt salvage brand - so when you go to sell/trade the car - the person will see that the car is a rebuilt salvage vehicle.

And a car hit that hard -- your looking at 30 days to repair - minimum. And the insurance company will not pay for a rental car.

Your best bet is to just let the car go.

Answer 3

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Answer 4

I don't think you want to repair a vehicle with that much damage.  There could be even more damage once the vehicle is dismantled.  Your vehicle is usually considered totaled when the damage exceeds 75% of the cars Actual Cash Value.

You can keep the vehicle, but the insurance company will and is entitled to deduct the salvage value from the settlement amount if you decide to keep the vehicle and have it repaired.  

Your vehicle is relatively new.  You might want to find out if they will agree to pay you the original Bill of Sale amount less mileage.  Most insurers should agree to this.   Also, most insurers do not use the Kelly Book.  They use third party companies like CCC.  They base the  ACV on comparable vehicles in your area.   Since you dispute the amount offered, you need to do your homework, and prove that it is worth more.  

Otherwise, you may fair better going against your own collision coverage.  They will also pay you the ACV or BOS less mileage, take your vehicle and then subrogate against the other party for what they paid out.   You may even have "new car replacement" on your policy.   You have the coverage, use it.

Answer 5

1) No one uses Kelly except used car dealers. Almost all insurance companies use NADA for a baseline value.

2) The insurance company doesn't want your car. Yes, they do sell the wreck for salvage at auction but they do not make money by selling 'parts'. Since they are legally buying your car from you they have every right to recover some of the expense of paying your claim.

3) This is not a decision  or a rule dreamed up by insurers -- this is a state mandated regulation that dictates when cost to repair a vehicle reaches or exceeds the value or a set percentage of that value the car MUST be declared a total loss.  Your only point of negotiation now is the value of the car itself. Try and locate as many vehicles like yours for sale in your area with similar mileage, condition and options and list the prices and phone numbers. If the mean average is more than they are offering you simply show them your research.

4) If all else fails you can still make a claim through your own insurance company (if you really feel they will pay you more).

P.S. -- 'Judge Sludge' is giving you some very, very poor advice. If you want to spend the next ten months battling the insurance company through an overpriced lawyer, be my guest, but I suggest you NOT take advice from idiots like him/her/it.

Answer 6

i work for an  insurance broker in the uk. here you have the option of buying back the vehicle to repair yourself. they will deduct roughly 25% of the price they have offered you if you keep the car, but you will have money towards the repair. the way they calculate it is for the cost of NEW replacement parts from the manufacturers, plus labour - if this is a similar price to the market value, they will total it. if you want to increase the offer they have made you, look for adverts for the same make/model/mileage etc and send them to your insurers. try and get adverts from garages as these are usually higher than buying private. you need to prove to them that you couldnt buy a similar car for the money they are offering.

Answer 7

The other persons insurance company will be in contact usually by first light the next day to try to get to you before you have time to consult with an attorney or to think about what happened too long.. They will want to get a recorded statement from you… Decline this, tell them that there is not going to be any recorded statement at this time… This way you have refused the statement but allowed them to think you may do it at a later time… They will likely not take no for an answer and try to convince you that it’s just a simple procedure they have to do and won’t take too much of your time at all…

Tell them again there will be no statement.. They will likely ask you if you’ve retained an attorney then, tell them No you have not , that you feel that this matter could be resolved without involving attorneys.

This should please them and will save you money in fees later on at settlement…

An adjuster should inspect your car and complile a list of repairs necessary or total it if it's damages exceed 60% of it's value..

They should cut you a check very swiftly on the vehicle damage/property damage, they want you happy for when the time comes to reach settlement... This property damage check has nothing to do with your final settlement...

Now comes treatment for your injuries… Even though you may not feel much more than a headache or what appears to be other relatively minor ache and pain I urge you to seek out a chiropractor who will assess your condition and advise you as to what course of treatment he prescribes for your condition..

It is possible that you have need for treatment prior to the accident but the accident brought your problem to the forefront with the impact, meaning your headache and or other pains…

Start treatment with your Chiropractor and depending on your condition might need to be treated 3 days a week for a several weeks then 2 times a week for a several weeks then once a week until he releases you from immediate treatment…

This is where the negotiation for settlement comes into play… Once you have a total medical bill to work with you now have a basis for negotiation…

Even though your PIP insurance pays for your medical, you still use the total medical bill for negotiations…

You should typically end up settling for 2 to 2.5 times your total medical bills for your pain and suffering.

Don’t accept the measly amount they will try to offer you at first, tell them you were hoping to resolve this without attorneys, and that you will need a more reasonable offer, they will likely increase the offer immediately but only by 500 or 1000 bucks….decline again and they will likely tell you they have to talk it over with someone…

Tell them (example I have 3000 in medical bills) so your offer is going to have to be reasonable compensation for that amount…they know what’s protocol, they are just doing their job by trying to give as little as possible..

When you finally arrive at a mutual settlement amount, have them mail you all the paperwork…and when you receive this, take it to your bank to have your signiture notarized and send the paperwork back to them and a check for the agreed upon amount will follow in about 10 days… They usually expedite the check to you as they don’t want you to change your mind…

This of course will save you 33-40% in attorney fees, and unless you have a complicated major injury case, you’ll do just as well as an attorney… we’re led to believe we’re not capable of settling these issues ourselves…that is just nonsense…

Good Luck and I have applied these techniques about 6 times and I’ve always gotten nice settlements of  between 5-10 grand…

Good Luck…