Why Was My Car A Total Loss???

[Andre1969]

I'd be leery of a BOF (Body-On-Frame) vehicle that got its frame bent, and straightened back out. It's one thing to bang out a fender or quarter panel, or pop out a dented door, or other non-structural part. But with something structural? When it gets bent out of shape, bending it back into shape would actually weaken it more, I'd think.

 

[Music Lover]

I believe it still exists just not something we see everyday. Experienced mechanics can earn large by picking the right wrecked cars from auctions and do it the right way and make videos from it.

One of my friends owns a body shop and does that. He told me that the secret to making money is to never buy a wreck that was hit in the front as there are far too many parts and potential problems. He buys side or rear impacts only.

 

[Midpack]

One of my friends owns a body shop and does that. He told me that the secret to making money is to never buy a wreck that was hit in the front as there are far too many parts and potential problems. He buys side or rear impacts only.

Interesting. I would have guessed an undamaged engine might be of significant value. Along with the nav/infotainment system, the interior and many other parts. But just guessing...

 

[Andre1969]

Interesting. I would have guessed an undamaged engine might be of significant value. Along with the nav/infotainment system, the interior and many other parts. But just guessing...

My guess is that a car that's smashed from the front still has a lot of value as a parts car, but isn't a good candidate to be re-built and then resold as a fully functioning car.

 

[Midpack]

My guess is that a car that's smashed from the front still has a lot of value as a parts car, but isn't a good candidate to be re-built and then resold as a fully functioning car.

I meant a salvage yard might get significant value from the lightly used engine, not suggesting they'd repair the car.

 

[VanWinkle]

I got in a wreck on the way to work a few years ago. It was my fault. They had changed the traffic lights at an intersection with poor visibility so that as you come up a hill rounding a corner all you see is green for turning until close to the intersection where you see the red for straight through. There were numerous similar accidents after mine and now baffles have been installed to address the situation. But I own that it was my fault. I admitted fault to the cops on the scene, got a minor ticket for running a red light. I am extremely thankful that no one was hurt!

The damage to my car was just to the passenger door. I assumed the insurance company would just replace and repaint the door and that would be it. Side curtain airbags deployed as well on passenger side but no one but me in the car driving. The damage seemed pretty minor. But in talking with cops on the scene they told me to expect it to be totaled because the door damage could have impacted one of the structural members in front of or behind it and insurance companies are wary of the potential liability in a future crash.

Like you, they cut me a check much higher than I expected. I had bought the car as a used rental car about 5 years earlier and they totaled it for about $1000 less than I paid for it. So I got to use the car for 5 years for $200 per year. Not bad in my book.

I don't know what damage you suffered but apparently once the passenger compartment is structurally compromised, it's a goner regardless of the cost of repair. This actually makes some sense to me.

It was the air bags that totaled the vehicle, not the structure. Structural components can be replaced and don't normally get repaired. The age of the car and air bag deployment is the likely cause of the total. Plus salvage value may have been excellent.

Been there, done that!!

VW

 

[Koolau]

I believe it still exists just not something we see everyday. Experienced mechanics can earn large by picking the right wrecked cars from auctions and do it the right way and make videos from it.

Here is an example that I can spend a couple of hours just watching and appreciating the process:

https://youtu.be/AXqs-0yV7u4

I still recall being in awe of a some of these body-repair guys - especially the painters. I saw painters who could flawlessly match custom metal-flake paint jobs. But almost to a man (sorry, I never met a female body-shop repair person ca 1967) these folks were weird. The more accomplished and artistic, the weirder the craftsman. I came to accept it as what to look for when seeking the best body-man in a shop. YMMV

 

[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.

DS received a message today that they were offering him $9,800. Not!

The $17k above is more of a replacement cost and I suspect that his policy is likely actual cash value rather than replacement cost, but we need to check on that.

I input his VIN and answered some questions and have a Carvana offer of $13,554 and an offer from CarMax of $14,000 (that is for that VIN before the accident). Looking at Carvana, CarMax, NADA, KBB, CarFax, Edmunds and Black Book Weekly Lite the average value is $13,503... the average dropping the high and the low is $13,497 and the average dropping the two highest and two lowest is $13.458.... so I'm thinking that $13,500 is a fair settlement but I'm hoping to get more.

Any advice on negotiation strategy? DD says that she just provided them with links to relevant comps but didn't offer a counter-offer and they came back with a higher number than she would have counter-offered.

 

[UnrealizedPotential]

^^ 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...

49 years with no accidents ? Well, until now. But still, wow! I have been involved in a few accidents and it was always because someone hit me from behind. Two accidents in 35 years of driving I think is pretty good , but you clearly are in a class of your own.

 

[texasdiver]

As other’s have said, “total loss” doesn’t mean they haul the car to the landfill.

It means it is cheaper to sell the wrecked car at auction than pay to have it repaired.

If you have a car that is worth $10,000 and that has suffered $5,000 worth of damage but that is worth $7,000 at auction in its current state then the insurance company can either:

1. Pay $5000 to fix your car and give it back to you which costs them $5,000

2. Declare the car “totaled” and pay you the $10,000 value of the car and then turn around and sell the wreck at auction for $7,000 which costs them $3,000.

In this scenario it is $2000 cheaper for the insurance company to declare the car totaled than it is for them to repair it. They do hundreds of thousands of these sorts of transactions every year so I’m guessing their data folks have very well refined algorithms that tell them exactly which cars to declare “totaled” and which to repair that maximize their profits long-term. This is how car insurance companies make their money.

 

[DrBrisket]

As other’s have said, “total loss” doesn’t mean they haul the car to the landfill.

It means it is cheaper to sell the wrecked car at auction than pay to have it repaired.

If you have a car that is worth $10,000 and that has suffered $5,000 worth of damage but that is worth $7,000 at auction in its current state then the insurance company can either:

1. Pay $5000 to fix your car and give it back to you which costs them $5,000

2. Declare the car “totaled” and pay you the $10,000 value of the car and then turn around and sell the wreck at auction for $7,000 which costs them $3,000.

In this scenario it is $2000 cheaper for the insurance company to declare the car totaled than it is for them to repair it. They do hundreds of thousands of these sorts of transactions every year so I’m guessing their data folks have very well refined algorithms that tell them exactly which cars to declare “totaled” and which to repair that maximize their profits long-term. This is how car insurance companies make their money.

Add in the fact that even salvage values are up significantly with the current shortages and these scenarios are becoming more common.

We had 2 vehicles totaled recently for hail damage which was only cosmetic and could have been fixed with paintless dent repair. When I inquired where the vehicles would likely end up, the adjuster said a lot of totaled vehicles are currently being exported to markets where a salvage title is not an issue as long as vehicle is drivable.

 

[2177V]

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?

Let's do some math: $40K car. Paid you $28K. If they fixed the car for $13K then their initial outlay is $41K. They sell the repaired salvaged car for about 60% of the $40K car which is $24K. $41K - $24K = $17 final outlay which is close to the $13K repair outlay.

I suspect the recent rise in used car prices may be a factor due to the supply chain issues with chips on new cars. This means the salvage car could have fetched $4K more than $24K that I estimated above. The only way to find out is check the market price for your car as a salvage with your mileage. I am beginning to suspect your $40K car is a low mileage car which would make your totaled repairable car more valuable.

 

[indiajust]

Many newer vehicles with sensors and gadgets are simply unrepairable, even if they look fine. It's too hard to diagnose and fix the interactions between various systems. Easier to scrap for parts.

 

[breger1]

It is unfortunate when a car gets totaled. I had my Subaru wreaked and totaled in June (first accident in 40 years). Airbags deployed but it did not look too bad and at first they told me it was repairable but then changed their mind once the repair shop went through it and submitted their supplimental adjustment.

I saw the car when I went in to sign-off on the loss and the shop had it all marked up highlighting all the damage missed by the adjuster. I was amazed how much damage they had found body wrinkles (even though no windows were broken or cracked) well to the back of the car and it did not have so much as a door ding before the accident. I actually had it wrapped in clearbra material when new as I wanted to wash it 2x weekly through a car wash (rust belt) without getting all those swirl marks.

I was satisfied with the outcome as I have concerns about driving a previously wrecked car...even my own. Painful as the cost to replace it is, I am grateful for the protection that vehicle afforded my family and I in the accident and that I have a new replacement that I am equally confident in.

 

[RetiredHappy]

About 10 years ago, we bought a Subaru Legacy which cost about $24k including extended warranty. The car was t-boned and totaled 15 months later and the insurance company wrote check to us for about $22K. Subaru resale value has always been amazing. We filed an extended warranty cancellation since we no longer had the car. We got a check back for about $2K. We drove the car for free for $15 months...

 

[Midpack]

Another odd development...

• 10/22 The initial online claim said based on your input the car is a total loss, but our adjustor will take a look to confirm. I assumed once he looked at it certainly they'd opt for a repair.
• 10/25 The car was moved to an auction lot, and the adjustor told me he'd look at it the next day, but I should start looking for a replacement car now.
• 10/28 The adjustor made it official, gave me final instructions (POA, title, etc.) and disclosed the settlement amount $28K.
• 10/29 As soon as I surrendered the title, the adjustor sent me a link to direct deposit the $28K settlement amount.
• On my own I had noticed in the online documentation that the repair estimate was $13K I didn't understand why they were giving me $28K vs taking on a $13K repair. I felt a little guilty, seemed unfair to all policyholders in general.

Then yesterday I get a letter from the adjustor stating "This letter is to verify that the below vehicle was declared a total loss as a result of Collision loss which occurred on October 22, 2021. The owner chose not to retain the salvage, and GEICO took possession on 10/29/2021."

HUH

I am grateful for the settlement and how GEICO handled the whole situation. It's too late to change the decision, but at no time did anyone from GEICO give me a choice. I would rather have had the car repaired instead of buying a new car in the current market. But I don't want to irritate GEICO, they've been more than fair...

 

[VanWinkle]

Another odd development...

• 10/22 The initial online claim said based on your input the car is a total loss, but our adjustor will take a look to confirm. I assumed once he looked at it certainly they'd opt for a repair.
• 10/25 The car was moved to an auction lot, and the adjustor told me he'd look at it the next day, but I should start looking for a replacement car now.
• 10/28 The adjustor made it official, gave me final instructions (POA, title, etc.) and disclosed the settlement amount $28K.
• 10/29 As soon as I surrender the title, the adjustor sent me a link to direct deposit the $28K settlement amount.
• On my own I had noticed in the online documentation that the repair estimate was $13K I didn't understand why they were giving me $28K vs taking on a $13K repair. I felt a little guilty, seemed unfair to all policyholders in general.

Then yesterday I get a letter from the adjustor stating "This letter is to verify that the below vehicle was declared a total loss as a result of Collision loss which occurred on October 22, 2021. The owner chose not to retain the salvage, and GEICO took possession on 10/29/2021."

HUH

I am grateful for the settlement and how GEICO handled the whole situation. It's too late to change the decision, but at no time did anyone from GEICO give me a choice. I would rather have had the car repaired instead of buying a new car in the current market. But I don't want to irritate GEICO, they've been more than fair...

The wording is used only to suggest that the insurance company retained the salvage. Insurance claims do not offer the salvage in many cases if it is going to be a tagged title in the state of the claim. They just assume no one wants to keep and repair a vehicle that will have a "rebuilt" designation on the title. You would have had to ask about retaining the salvage. You made the right decision Midpack, even if you feel you weren't given the choice to retain the salvage.

VW

 

[38Chevy454]

I suppose if you had asked about getting the car back, they *might* have told you a value, which would be subtracted from the $28K. Let's say the salvage is worth $14K, in that case you would get the car with a salvage title and a check for $14K.


I guess that almost all people do not want the salvage title and the wrecked car back, where they have to fix it. In your case with my numbers above, the repair estimate was $13K, so you would basically break even on money, but then have a salvage titled repaired used vehicle in the end. It would make sense if you could do a lot of the repairs yourself and save money, or had a lower cost repair facility that could do the work for less.

 

[teetee]

About 10 years ago, we bought a Subaru Legacy which cost about $24k including extended warranty. The car was t-boned and totaled 15 months later and the insurance company wrote check to us for about $22K. Subaru resale value has always been amazing. We filed an extended warranty cancellation since we no longer had the car. We got a check back for about $2K. We drove the car for free for $15 months...

Or only about 4k out the door after considering the extended warranty cost (minus the 2k refund), loan interest, tax, registration fee, doc fee, insurance prem. and gasoline.

 

[RetiredHappy]

Or only about 4k out the door after considering the extended warranty cost (minus the 2k refund), loan interest, tax, registration fee, doc fee, insurance prem. and gasoline.

No loan. $24k was all in for the car, tax, registration fee, doc fee and warranty. The only items that were not included in the $24K was auto insurance premium and gasoline.

 

[pb4uski]

Another odd development...

• 10/22 The initial online claim said based on your input the car is a total loss, but our adjustor will take a look to confirm. I assumed once he looked at it certainly they'd opt for a repair.
• 10/25 The car was moved to an auction lot, and the adjustor told me he'd look at it the next day, but I should start looking for a replacement car now.
• 10/28 The adjustor made it official, gave me final instructions (POA, title, etc.) and disclosed the settlement amount $28K.
• 10/29 As soon as I surrendered the title, the adjustor sent me a link to direct deposit the $28K settlement amount.
• On my own I had noticed in the online documentation that the repair estimate was $13K I didn't understand why they were giving me $28K vs taking on a $13K repair. I felt a little guilty, seemed unfair to all policyholders in general.

Then yesterday I get a letter from the adjustor stating "This letter is to verify that the below vehicle was declared a total loss as a result of Collision loss which occurred on October 22, 2021. The owner chose not to retain the salvage, and GEICO took possession on 10/29/2021."

HUH

I am grateful for the settlement and how GEICO handled the whole situation. It's too late to change the decision, but at no time did anyone from GEICO give me a choice. I would rather have had the car repaired instead of buying a new car in the current market. But I don't want to irritate GEICO, they've been more than fair...

But, if you chose to have the car repaired then I think that they would have also needed to pay you for diminished value (difference between the $28k value of the vehicle just before the accident and the value of the vehicle after repairs but with a salvage title) in addition to $13k of repair costs.

A vehicle receives a salvage title when it's damaged so severely that the insurance company declares it a total loss. ... Even after being rebuilt, the car will retain its salvage title, which substantially lowers its market value — by 20% to 40%, according to Kelley Blue Book.

So that would be another $3-6k that they would have had to pay in addition to the $13k in repair costs... so a total outlay of $16-19k.

 

[VanWinkle]

The Insurance will not pay diminished value on a totaled vehicle you choose to repair. In many first party claims, the Insurance will not pay diminished value on a repairable vehicle unless dictated by state law. Florida and Vermont do have statutes requiring Insurance to pay diminished value on vehicle deemed repairable. This would not apply to a totaled vehicle, but may enter into the equation of repair vs total loss.

VW

 

[pb4uski]

Interesting. It looks like it does get more complicated. See https://www.coverage.com/insurance/auto/diminished-value-claim/

It says:

... More states allow diminished value claims these days, especially since a class action lawsuit in 2001 (Mabry vs. State Farm) caused Georgia to change its rules. To see if your state allows diminished value claims, contact your state insurance commissioner.

The following states are known to allow drivers to file a diminished value claim with the at-fault driver’s insurance company:

• Arizona
• Colorado
• Florida
• Georgia
• Illinois
• Indiana
• Iowa
• Kansas
• Louisiana
• Maryland
• New Mexico
• New York
• Oregon
• South Carolina
• Virginia ...

 

[pb4uski]

The Insurance will not pay diminished value on a totaled vehicle you choose to repair. ...

I wonder why that is as they still come out ahead of what they would pay out for a total loss.

IOU, whether it was a wise decision or not, if OP had decided to repair and the insurance company had paid for the $13k of repairs and then say another $5k for diminished value of OP's repaired car having a salvage title, it is still better than paying out $28k for a total loss.

 

[VanWinkle]

Interesting. It looks like it does get more complicated. See https://www.coverage.com/insurance/auto/diminished-value-claim/

It says:

Many states allow diminished value claims as part of a liability claim against the at fault driver. Fewer states allow Insureds to recover diminished value from their own Insurance company. No fault states would be the most likely to allow first party diminished value claims.