Why Was My Car A Total Loss???

[Midpack]

An update from a thread I started a few days ago.

I had an accident one week ago, and I thought my car would be repaired even though the damage was considerable. Got my settlement today and they paid me over $28K for my total loss, much more than I expected frankly. They told me if the airbags deployed (they did) it would most likely be a total loss.

I looked through the claim paperwork and the adjuster estimated repairs would have cost a little over $13K.

I am at a loss to understand why they didn’t elect repair the car? I’m grateful at how they handled my claim and the generous settlement, but they could have spent much less with the repair, and I could have avoided buying a new car for well over $40K?

 

[latexman]

When the cost to repair gets about 50% of blue book value, insurance companies usually settle with the owner and sell the car.

 

[pb4uski]

Interesting to know. DS hit a deer on his way home from work on Wednesday night. I'm sure that the repair cost will be more than 50% of the ~$17k value of the car.

 

[latexman]

OP, you could have “bought” the car from the insurance company and had it fixed and made a little $, but you would have to get a “salvage title” for the car. To re-insure you’d have to declare it a salvage vehicle.

 

[ivinsfan]

B ut did you really want your old car back?! I would just prefer to get a replacement car

I suspect the car has substantial scrap value for the insurance company . Rather then risk going over repair estimates they will just move on

 

[Teacher Terry]

I bought a car back once and my son drove it a few years.

 

[Jerry1]

I’m sure there’s some basic financial balance that’s in play but just focus on the issue you pointed to - the airbags. Imagine what it would take to get the airbags working again AND be willing to subject yourself (the insurance company or the repair facility) to the potential liability if those airbags don’t function properly in the next accident.

I have no idea what it takes to get the airbags working again, but between the sensors, the wiring and the airbags themselves, which obviously can’t be tested (one time use), I’m sure it’s a nightmare. I wouldn’t want to have to re-certify that system.

 

[VanWinkle]

OP, you could have “bought” the car from the insurance company and had it fixed and made a little $, but you would have to get a “salvage title” for the car. To re-insure you’d have to declare it a salvage vehicle.

Not always as it depends on the state and the age of the vehicle. In Illinois vehicles over 8 model years old can be retained with no salvage title. It is true in some states that a salvage or rebuilt title must be issued regardless of age.

 

[VanWinkle]

An update from a thread I started a few days ago.

I had an accident one week ago, and I thought my car would be repaired even though the damage was considerable. Got my settlement today and they paid me over $28K for my total loss, much more than I expected frankly. They told me if the airbags deployed (they did) it would most likely be a total loss.

I looked through the claim paperwork and the adjuster estimated repairs would have cost a little over $13K.

I am at a loss to understand why they didn’t elect repair the car? I’m grateful at how they handled my claim and the generous settlement, but they could have spent much less with the repair, and I could have avoided buying a new car for well over $40K?

Salvage value on the vehicle is likely in the 8-10K range and possible supplements(additional damage found after teardown) make the vehicle a total loss settlement vehicle. The old rule was at 75% of value, it was a total. Now the salvage brings much more than the "old days".

 

[Midpack]

But did you really want your old car back?! I would just prefer to get a replacement car.

I suspect the car has substantial scrap value for the insurance company . Rather then risk going over repair estimates they will just move on

Not a matter of want. I assumed I was only entitled to the cheapest resolution, only fair to other policyholders? I really expected it would be repaired. But I am grateful, and I’m not fighting the insurance company, just wondering if I should offer to proceed with fixing it…

 

[Koolau]

Not a matter of want. I assumed I was only entitled to the cheapest resolution, only fair to other policyholders? I really expected it would be repaired. But I am grateful, and I’m not fighting the insurance company, just wondering if I should offer to proceed with fixing it…

My gut tells me that if the insurance co. doesn't want to fix it, you probably shouldn't either. Most cars I've had body repairs done to eventually have at least some issues (rust, rattles, etc.) YMMV

 

[Andre1969]

Back in 1998, I got t-boned delivering pizzas in an '86 Monte Carlo that my Mom had given me. Back then, the insurance company said that they totaled a car when the estimate to repair exceeded 60% of the book value. The car was 12 years old, with about 192,000 miles, so needless to say it didn't take much to total it.

An '86 Monte Carlo was a pretty simple design, by 1998 standards...heck, even by 1986 standards! These days, cars are much more complicated, so once they start tearing into it and see how bad the damage really is, costs could add up beyond the original estimate really quickly. So they might have adjusted that percentage threshold downward. Or, it may just vary by insurance company.

 

[Aerides]

Probably need an insurance/actuarial specialist to answer this, but its not just basic dollars, but risk. A car with extensive damage is not going to be the same after repairs. Suspension, the frame, all compromised. You car might get repaired for $13k, but not safely, not enough for them to want to keep it insured at the same price.

 

[Andre1969]

Something else I hadn't thought of...diminished value. That $28K they paid you is, most likely, what the insurance company calculated is what you'd pay if you were to go and buy that same vehicle, same age, mileage, pre-accident condition, etc, from a dealer.

However, once it's fixed up, it still has that collision on its record, and that's information that can easily be obtained, so that car is no longer a $28K car. At least, not in the eyes of the insurance company.

And now that it's been totaled, it's going to get a salvage title, so its only real value is in parts.

 

[freedomatlast]

Subaru's tend to twist fairly easily in a collision. I'd bet that if they checked all four corners on an alignment machine, the car was no longer square, even if it looks like it is. Insurance companies know that and would rather not deal with the additional costs uncovered as the repair process progressed.

With that said, someone will probably buy that at the insurance auction (COPART handles most of them), repair it and resell it with a branded title. Keep a record of the VIN number and punch it into google every few months. You'll probably be able to track what someone paid for it at the auction and then find where it is for sale after it's repaired.

I've bought several vehicles from insurance companies that were deemed a total loss. I repaired them, got them inspected and put them back on the road with branded titles. They look and still smell like brand new vehicles when I'm done. I usually keep them as daily drivers for awhile to make sure there are no hidden issues and then resell them, disclosing the previous damage along with pictures. They make great late model, low mileage inexpensive transportation and they sell very quickly.

 

[HarveyS]

... and I could have avoided buying a new car for well over $40K?

What if you buy a used car like the one you had? That would probably cost about $28K. You'd be out the sales tax, registration, etc., of course.

 

[Time2]

My daughter hydroplaned on a bridge, went off the road and hit a tree. The insurance company totaled the 2021 Toyota Rav 4, she had put 18,000 miles on it in 10 months. It has been 6 weeks and she is still waiting for the insurance company to make an offer of settlement. She didn't think it was totaled, and the first shop it was dropped at, didn't think it would be either. Happened at a bad time for her and her husband, they recently bought a fixer upper house, and replaced the HVAC and all duct work, gutted the kitchen, so need all new cabinets and appliances. Lots of dollars going out and now they will probably have to spend another down payment. Yes, I would buy a used vehicle, but she has been driving about 900 miles 80% of the weekends and will continue until May. I'm glad she was driving a newer safe vehicle when she crashed, even her dog was OK. He didn't like the ride in his cage strapped to the back of the platform truck though!

 

[ivinsfan]

Not a matter of want. I assumed I was only entitled to the cheapest resolution, only fair to other policyholders? I really expected it would be repaired. But I am grateful, and I’m not fighting the insurance company, just wondering if I should offer to proceed with fixing it…

Most likely your rates will rise for a few years and the onus of any over payment will be on you.I'm actually impressed with the no fuss quick resolution you got.


Good luck on your replacement hunt.

 

[Midpack]

^^ After 49 years driving without an accident I was hoping my rates would not go up (substantially). But if they do, I have to accept that, Geico has been more than fair with me in my view. I put a deposit a new car, had to pay over MSRP for the first time in my life, but it may take a month to get here - buying a car right now is horrible as we all know, but I need a car...

 

[ivinsfan]

^^ After 49 years driving without an accident I was hoping my rates would not go up (substantially). But if they do, I have to accept that, Geico has been more than fair with me in my view. I put a deposit a new car, had to pay over MSRP for the first time in my life, but it may take a month to get here - buying a car right now is horrible as we all know, but I need a car...

You just raised another point in favor of paying instead of repairing ,do you know if you have a loaner or rental car coverage for your policy. Since they paid you off they don't need to supply you with a different vehicle while you wait.


It's seems it's going to be a bad time to buy anything, but Thank goodness you came out of this in one piece physically.

 

[Jerry1]

but I need a car...

Good for you. Best to just rip the bandaid off and get on with your life ASAP. Lamenting over the current situation with cars is negative energy that you just don’t need and thankfully you have the resources not to have too.

What did you get? Same vehicle? Newer year?

 

[Aerides]

You just raised another point in favor of paying instead of repairing ,do you know if you have a loaner or rental car coverage for your policy. Since they paid you off they don't need to supply you with a different vehicle while you wait.


It's seems it's going to be a bad time to buy anything, but Thank goodness you came out of this in one piece physically.

I was wondering about that. If I have car rental coverage on my policy, and it's going to take a month for my new car to arrive...(vs. fix the old one)...does the rental coverage not apply at all? Presumably, you'd have been able to get a rental on day 1 following the wreck, and it would be covered until some point, but I'd be annoyed if they said "here's a check, turn in your rental today!"

Even in the best of times, I would not simply rush and buy the first car I saw. I always take a long time with that decision...I can see the coverage shouldn't be open ended, but there should be some sort of reasonable allowance...have to go read my policy now!

ETA: Ok - I have geico too, policy says:
Rental Reimbursement coverage helps to reduce the hassle of an accident by providing for a replacement car, while your car is in the repair shop, or if your car was a total loss, subject to the coverage limits.
The coverage limit you select helps to provide a rental vehicle of comparable size and seating up to a maximum of 30 days.

 

[ivinsfan]

If I was guessing I would say the fact they cashed you out and totaled your car means that transaction is finished and they owe you nothing.

 

[VanWinkle]

You just raised another point in favor of paying instead of repairing ,do you know if you have a loaner or rental car coverage for your policy. Since they paid you off they don't need to supply you with a different vehicle while you wait.


It's seems it's going to be a bad time to buy anything, but Thank goodness you came out of this in one piece physically.

Good point on the rental ivinsfan!! Most companies will allow 7-10 days of rental to look for a replacement vehicle, but that is much less expensive than a rental car for the whole repair period(likely 30-45 days min).

 

[pb4uski]

Subaru's tend to twist fairly easily in a collision. I'd bet that if they checked all four corners on an alignment machine, the car was no longer square, even if it looks like it is. Insurance companies know that and would rather not deal with the additional costs uncovered as the repair process progressed.

With that said, someone will probably buy that at the insurance auction (COPART handles most of them), repair it and resell it with a branded title. Keep a record of the VIN number and punch it into google every few months. You'll probably be able to track what someone paid for it at the auction and then find where it is for sale after it's repaired.

I've bought several vehicles from insurance companies that were deemed a total loss. I repaired them, got them inspected and put them back on the road with branded titles. They look and still smell like brand new vehicles when I'm done. I usually keep them as daily drivers for awhile to make sure there are no hidden issues and then resell them, disclosing the previous damage along with pictures. They make great late model, low mileage inexpensive transportation and they sell very quickly.

There is a guy in our area that specializes in that. He buys totaled Subarus, fixes them up and then sells them, I believe with a salvage title. From what I've heard he is pretty good at it. His son was a Nascar crew chief but I think now has moved up within one of the top Nascar race teams.