Darling wife’s car (she is fine) was hit by a recycling truck on Tuesday.
The other driver’s insurance company (Chartis/AIG) has totaled the car and wants us to release it and title to them Thursday morning. Currently they are paying for a rental and I assume that will end when we release the vehicle to them.
This feels a bit rushed because of the holiday tomorrow and our insurance agent is out of town for the rest of the week. So, no advice from him.
Car is a 2011 Fit Sport Automatic in Silver with 13K on the odometer - very clean, garaged car. Purchased 15 months ago.
So, all you dopers out there who have dealt with this situation - what was your experience and what do you wish you had negotiated differently. General advice from insurance types also accepted
IANAL but I’m pretty sure you should not give them the car or the title. They are trying to get the salvage on it, which should be a lot of money for such a new car. Make sure you hold out for not just the trade-in value or the amount you owe, but the full replacement value of the vehicle.
I work at an insurance company. My advice is to look at how much comparable cars with comparable mileage are selling in your area to see if their offer is reasonable, or whether they’re lowballing you. You CAN negotiate, just back it up with screen prints or printouts of comparable vehicles for sale in your area. Look on Craigslist, eBay, and at local used car dealerships.
Are you happy with the dollar amount they are offering? Are you happy titling the vehicle to the insurance company, or would you rather retain the salvage? If you want to retain the salvage, tell them that. If you go that route, your settlement would be a bit smaller (since they can’t keep or auction off the parts like they would if you titled it over), and you won’t get much resale value out of the vehicle. But if you can dump some of your own money into making it driveable, and are okay with having a salvage title, that’s an option. You might not be able to insure it at a reasonable price ever again. You probably won’t be able to get collision coverage, but that depends on your state.
After you’ve done some research and soul-searching, if you’re still not happy with their offer, call them and tell them you would like to discuss the matter with your agent before settling. Or, at this point (given that tomorrow is a holiday and it’s already fairly late in the business day) just wait to call them back until Thursday or Friday.
They are not entitled to replacement value, but the cash value. That is, the amount their car *would have *sold for, if they’d sold it a second before the accident happened. And, if the ins. co retains the salvage, they compensate for that. If they don’t retain the salvage, the settlement is decreased by that amount (as I explained above).
Also, settling the property damage aspect of a claim is not the same thing as settling the entire claim. If she is thinking about getting checked out, she should tell the adjuster that and ask them to leave the medicals open for now.
Oh I forgot to mention another option, if you choose to retain the salvage: you can decide not to repair the vehicle, and sell off the parts yourself. But this is a huge pain in the patoot unless you are a mechanic or have a good mechanic friend.
I operated a “high-end” salvage yard for ten years. We purchased newish “insurance-totaled” vehicles at auction for parts sales and sometimes rebuilding.
My experience is that even a (newer) vehicle that looks like it was rolled down a cliff will fetch 20-40% of the market price of an equivalent undamaged vehicle. That is because if you bought a car by purchasing every one of its individual parts, the cost would be well over a million dollars. Thus, good used parts from newish vehicles are quite valuable–and even the down-the-cliff vehicle will usually have many usable parts.
Thus, the insurance company that takes your car and settles with you for its ostensible market value is recouping a fair amount of that settlement when the “totaled” vehicle is sold at auction. This is fair, since what you have suffered is not a total loss of your car’s value, but rather, (undamaged market value)-(salvage value). This does mean, however, that the insurance company has no valid reason to lowball you.
Also be aware, that depending on your state’s laws, you can compel the insurance company to “make you whole,” which means replace your car with its exact equivalent, or repair it even if it is “totaled.” While you may not want to carry out this threat, it may give you leverage to make it, and get a better cash settlement.
One question about ‘replacement value’. I live in an area with fairly high sales tax. If I were to use the CarMax example above - roughly $18K for an equivalent replacement - should I expect the offer to include the sales tax I will have to pay to purchase a replacement?
For your own sanity, don’t go into this transaction with the expectation of getting screwed. Insurance companies have plenty of reasons to play fair, and it’s really not worth listing them all here. And don’t worry about what they do with the car after they buy it from you because it’s none of your business. Your business is limited to being compensated for your damaged property.
Your job is to decide how much you would pay someone for the car you just lost. You find that from lots of different places–quick and easy resources for a newer car are Autotrader.com and cars.com and understand those are ASKING prices. the real value is likely to be a bit less. Once you know what your car is worth, compare that to the offer you’re getting. If you don’t like the offer, be prepared to explain why. If they tell you “tough noogies,” don’t give your arguments any consideration and don’t explain why their offer is lower than your research suggests it should be, go through your own carrier and file a complaint with your state’s insurance commissioner. You don’t have to agree with them, but you are entitled to understand their point of view.
To settle the claim, you’re eventually going to have to surrender the car and title (I would strongly advise against keeping a totaled 2011 car). If there is a loan on the car, that gets paid before you do which can leave you upside down this close to the purchase date. Not much you can really do about that, the value of a car kind of is what it is.
Holy Shit! What state does this happen in? That’s a collossal can of worms if it’s true.
I’ve never heard of this either, but laws can be really weird in some states (Michigan, you rogue! :p). If this *is *true, though, I would expect the insurance company to “make whole” every single claimaint on every single claim they handle in that state. Failing to do something so basic would be a series of bad faith lawsuits waiting to happen, meaning settlements and financial penalties, which could lead to bankruptcy.
And, although less-ethical insurance companies might fuck around with other things to make a buck (understaffing, insufficient training, ambiguous language in policy documents, denying claims on *exceedingly *minor procedural technicalities, never giving policyholders the benefit of the doubt), you just don’t fuck around with state requirements.
[insurance geek]FWIW my company identified KBB as the one source that was not considered credible. NADA or comparative database companies with actual current examples pulled from the marketplace were the go-to resource. KBB…please. It happens that, as regards the 2011 Honda Fit Wagon KBB is lower than NADA, but that is not typical of my experience. The methodology of the companies is very different. KBB is about as accurate as anally extracting random numbers.[/insurance geek]
Yep. KBB is used as a tool by used car salesmen looking to either lowball you on your trade in (with one set of books) or show you how much that heap they are trying to sell you is “really” worth. Or as said- by insurance co trying to lowball you. Once a dude whips out a KBB- run!
But you’re correct in that NADA is pretty damn good, but not that easy for a layperson.
Reporting back - it is all done but for the FedEx of title and check (out of state adjuster)
Their first offer was almost $860 below my research at NADA, Edmunds and KBB. Their Audatex evaluation had local asking prices $650 below my estimate of local prices at cars.com.
They came up $400 from the first offer when I pushed them, so I got close enough to feel ok. It actually came out within $200 of replacing with a new 2012 model.
One twist that came up, perhaps a negotiating ploy, was a last minute “My boss has approved the repair of the vehicle if you want that.”. I declined since the collision shop had convinced me that having the car totaled was a good thing.
Not so much a negotiating ploy as an extraordinarily bad idea. If your 2011 has been smacked so hard as to be almost totaled, you as the owner will always wonder if any subsequent problem is part of the accident. That means you’re gonna keep coming back asking for me to repair every little rattle and loose knob for as long as you own the car. If it smells like a total, I’m getting your car from you for both our sakes.
If this ever happens again, ask them what type of title the vehicle would have after the “restoration” and if their company would insure such a vehicle and how much extra they would charge to do so.
The car can never have a “Clear” title again. A “Rebuilt/Reconstructed” title will scare off many future purchasers but should meet safety standards (hopefully). A “Salvage” title would also mean the vehicle had sustained severe damage costing more than 75% of the vehicle. Check with your State to see what titles they issue and what those titles indicate.
A good rule of thumb is to never take the first offer. The insurance companies quick search probably found a comparable vehicle(s) close by and offered you the middle vehicle price. They, and you, can expand the search to 100, 200, 300 miles looking for higher value vehicles.