So about a month ago my wife hit another car. The other guy was responsible (she turned in front of my wife, who had the right of way), which is a good thing because there is no collision/comprehensive insurance on that car.
There didn’t seem to be any damage to mechanical components, but the front bumper assembly and hood need to be replaced plus frame straightening, and it’s an older car (2001 Prizm) so the other guy’s insurance declared it a total loss and paid for the car minus $100 for salvage. Meanwhile a collision place has been repairing it, and he said upfront he would take whatever the insurance paid, so it would seem that all is well and I’m back where I started from.
But a few years ago my SIL had someone rear-end her car, and the insurance refused to pay for the damage, saying that (unbeknownst to my SIL) the car had at some point been declared a total loss and that it had no value and they were off the hook. So I’m concerned that should there be a future accident involving my car, that the other guy - who will undoubtedly be at fault in that hypothetical incident - will have their insurance refuse to pay.
But it’s hard to imagine that an insurance company has the right to not cover damage to something which has genuine value just because someone at some point declared it a total loss.
There are several points I’m unclear about as to my SIL’s story. One is which insurance company declared it a total loss, the one that covered that car or the one that covered the car that hit it (as in my case). Second, which insurance refused to pay, again either the one covering the car or covering the one which hit it. Third, whether the car had been registered with a “salvage” title or not. (In my case, I don’t anticipate the title changing, partly because I wouldn’t think someone else’s insurance’s declaration could impact my title, and partly because the collision guy told me the salvage title stuff doesn’t apply to cars which are older than 8 years.)
So I intend to speak to my SIL, but I’m not sure she has a comprehensive knowledge of the matter anyway, and figure I might get the straight dope here.
State law is going to impact this. In my state (Kansas), the insurance company that declared a vehicle a total loss is required to inform the Division of Vehicles of that fact, and you’d be getting a letter from them canceling your existing registration and requiring you to retitle the vehicle as salvage or rebuilt salvage within 60 days; failure to do so is a misdemeanor. (Kansas Statute 8-198, sect. d(2) and (3) ) Your state may well have very different rules.
I drive a vehicle with a rebuilt salvage title, and while I have full coverage on it, I had a long discussion with the insurance agent before they’d write the policy, and they won’t pay out at the same rates they would on a non-salvage vehicle of the same type, because a rebuilt vehicle is not considered to have the same value. Your insurer may or may not write policies on salvage vehicles, and they will most definitely want to know what they’re writing on. If your SIL’s insurance company didn’t know they were covering a salvage vehicle, they may have declined to pay under a fraud or misrepresentation clause. Somebody else’s insurance declaring the vehicle valueless sounds like an adjuster trying to low-ball a claim.
I friend of mine right after the hurricane seasons of 2004 - 05 got into the business of buying these ‘total-loss’ vehicles, fixing them up, retitleing them and selling them at a nice profit … took about five years for the competition to catch up and so he quit doing it …
The Porsche I bought a couple of years ago for about half Blue Book had a salvage title. It was bought from a German car recycler in Sacramento who had photos of the car before repair. Panels on 3 sides of the car were damaged and the insurance company required OEM parts for repair. The parts cost + labor was more than 75% of the value given the cost of Porsche parts, so they wrote it off as per policy. There was essentially no structural damage and the car tracked perfectly.
So I would say to others who are understandably shy about a salvage car find out the history and buy from a business if possible. I hear that some states will even require a salvage title if a car is stolen and then recovered intact. Don’t know if this is true though.
Salvage title, what in my country is a flag on the registration of the vehicle as a "repairable writeoff ", is there only to warn a potential buyer that they’d better check its repaired properly and the repair is long lasting… very thoroughly. Also check for things like airbags which are very expensive and can’t be obtained from the wreckers. (since wrecks have had them consumed.) And that is all it is.
If the SIL’s insurer said they don’t cover it, that might be be due to failure to disclose the status as “salvage title” to them ???
If the other vehicles insurance said that, thats bogus. what isn’t bogus is that the other party only has to pay out the value of the car… not the cost to repair it. While the insurers are generous and pay $3000 to repair a $2000 car…if its clearly of no value, then they can hope your SIL would pay costs if he took it to court… they know that if at court they can show its a vehicle worth $0, what do they have to do to make amends ?
I had that argument with my employer. He said I owed him for a tyre. I said "ah but the damage to the tyre was to 1. a tyre worth nothing due to its flat spots, 2. only happened because the flat spot let the damage occur. (and 3, he had no contract which said that I was responsible in anyway for any damage, when arguable he didnt provide me a safe work place by leaving sharp metal objects in the yard.)
With your SIL, the issue seems to be one of insurable interest and, did she have any. In this situation, your SIL must have an insurable interest in the vehicle in the event of a loss in order to collect. Normally, simple ownership constitutes this interest but here we have the insurance company claiming a previous total loss to the vehicle which presumably renders the vehicle valueless. Here, your SIL has 100% insurable interest in a vehicle the insurance company feels has a value of zero and zero is the loss.
Unless your state has specific laws to the contrary, your SIL should demonstrate she has suffered a monetary loss as a result of the incident. Even though her vehicle may have been declared a total loss, it doesn’t appear she was the beneficiary of any payment and it’s difficult to imagine a third party’s interest or payment is binding upon her.
The above is based on the understanding that your SIL purchased the vehicle as is and that when she initially insured the vehicle did not misrepresent its condition or history.
I’m pretty sure your sister in law is getting something about the story mixed up. I have had more than one car “totaled” by insurance companies. And by “totaled” I don’t mean anything to do with a salvage title or a junk title - I mean the insurance company that was liable for the damages decided “the damages will cost $5000 to fix, but the car is only worth $2000 so here’s a check for $2000 and sign the title over to us”. As it happens, the cars had expensive but not structural damages,so there was no issue with safety and I wanted to keep the cars. In order to do that, the insurance company deducted the salvage value from the check -" the car is worth $2000, the salvage value is $500, here’s a check for $1500 and you can keep the car." I can then do what I want with the car- I can leave the cosmetic damage and the car will be worth the $500 salvage value or I can pay my cousin Tony to do $5000 worth of work for the $1500 cost of parts and have the car again worth $2000. How much I am paid in a subsequent accident will depend on how the assessor values the car before that accident- they don’t just look at book value , they also look at pre-existing damage.
I also had a car that was “totaled” by the insurance company. I had to send a letter to the agent promising them I wasn’t going to sue or anything. Took the pre-accident value - wrecked value check and had it fixed up. That was over 9 years ago and I’m still driving it.
Note that this sense of “totaled” is a purely economic one. There was no reporting to the state or anything.
Changed insurance companies a couple times since then. So our current insurer has no way of knowing it was “totaled”.
What if it gets wrecked now? We no longer carry collision coverage on the car. And haven’t in some time. The extra cost of that insurance is not worth it for a car its age and value.
Which makes me wonder what’s going on with the OP? A 2001 Prizm shouldn’t have collision on it. Not for many years. You should get a check one way or another. Either for the value of the car or for the extra insurance payments you’ve been making. If they refuse, report them to the state’s insurance agency.
Even if your state does not require reporting, how certain are you that your previous insurer did not report to one of the industry databases, such as CLUE? Have you ever run a CarFax, for example? They get reports from police departments and repair shops, too, so there is an excellent chance your current insurer either already knows or could find out quite easily.
I don’t understand this part, could you clarify. What do you mean it ‘shouldn’t have collision on it’ and they should get a check back from the insurance company?
If the car owner chooses to carry full coverage/collision, that is their decision and they should pay the premiums for it. Or, if the car is financed full coverage is often required. Are you saying they somehow got hoodwinked by the insurance agent and paid for something they didn’t intend to get?
I think he/she was saying if I had been paying premiums for collision coverage and the issuer of that policy then declined to pay on it because the car had been declared a “total loss”, then they should refund the premiums because they weren’t intending to honor the policy.
[Would make a lot of sense, other than the fact that I didn’t have collision coverage and the insurance company in question is that of the other driver.]
GA works similarly. The totaled vehicle would have to be retitled as “Salvage” (regardless of who keeps it). If it is rebuilt it would have to pass a pretty stringent state inspection and be retitled as “Rebuilt”. Even if rebuilt, though, this site says:
How all this relates to an insurer covering damage by their insured on a 3rd party salvaged/rebuilt vehicle is not as clear, at least to me. It could very well be that your sister would have to sue the other driver, directly or via her own insurance company, for the damages. Just because their insurer doesn’t pay does not let them off the hook for damages. Even then she would have to first establish the value of the salvaged vehicle, not an easy thing to do.
(bolding mine)
I’d seriously reconsider keeping the car. From what I understand, if the frame is damaged, the car is NOT as strong, and will not protect the occupants as well if there is another collision.
Our first Civic had frame damage, and was declared totalled. We could actually see a very small crimp in the roofline just above the driver’s seatback - it had been rear-ended at high speed and pushed into another car. We were terrified the insurance company was going to try to force us to repair and keep it.
Seems clear enough although I agree it’s awkwardly stated. Writing from a consistent POV would do wonders for many posters, myself too often included.
I read it as this …
The OP’s wife’s car did not have comprehensive insurance. Fortunately for the OP & wife, the accident is the fault of the other driver, so that driver’s insurance must pay for the OP’s wife’s car’s damage. The OP’s & wife’s lack of comprehensive insurance is immaterial.
Decades ago I used to deal in salvage titled cars. The details then varied widely state by state. A consequence of which is that a salvage vehicle was (is?) a bitch to sell across state lines. Depending on where the OP lives this may be a significant consideration.
Back when cars were essentially bolted together, some folks would buy wrecks and build up a car from parts scavenged from various wrecks.
A good paint job and matching upholstery = “good car”.
This is where the “junk” title comes from.
Now, at least in CA, there are people who do replace body panels, put in new airbags, etc.
And sell the cars with a Salvage title.
If you don’t care for Comprehensive coverage, and expect to keep it in CA for life, they can be a good deal for booth the rebuilder and the buyer.
I would not be surprised if an insurance company considered a salvage car as having no insurable value - it was an insurance company that labeled it as “worth nothing” - that is, after all, what “Totaled” means in the industry.
No, that is not what “totaled” means. Totaled means a constructive total loss, but that’s not at all the same thing as “worth nothing.” The interplay of insurance company rules, state regulations, and statute decide when a vehicle is a constructive total loss. For example, in my state a late-model vehicle that has been damaged to the extent that repairs would cost more than 75% of the fair market value is a constructive total loss and must be declared as salvage, by state law. In Iowa, they use 50% of fair market value as the threshold; in Oklahoma, 60%; in Missouri, 80%.
That means a vehicle that is legally totaled in Iowa may be deemed repairable in other states. Moreover, even a vehicle that is legally totaled may be repairable, depending on exactly what is wrong and what parts are available. For example, consider a car whose fair market value pre-crash was $20,000. If restoring it to pre-crash condition (at full shop rate and retail parts markup) will cost $10,001, it is a constructive total loss in Iowa. However, somebody able to do work themselves, shop for parts, and live with paint that doesn’t quite match all the way around may be able to get a serviceable vehicle for substantially less, and drive a rebuilt salvage car/truck for many years to come. (One of my relatives got 20+ years and 200,000 miles out of a totaled car.)
A car that runs is never “worth nothing,” a car that is repairable has value, and chunks of twisted metal that don’t even resemble cars anymore are still worth some value at the scrapyard ($110/ton with tires removed and gas tank punctured, as of this morning in Kansas City).
- will have their insurance refuse to pay.