Give me some advice about auto insurance

In My Humble Opinion
1

Last night as I was getting ready for bed, I heard that kind of sickening crunch from outside that presages hours, days, weeks wasted – in other words, the sound of some idiot plowing into my parked car. So this morning I’m off on a merry dance with the police, my insurance carrier, the repair shops, the rental agencies, blah, blah, blah.

The particular point I’m worried about is having my car declared totaled. To me, the damage isn’t that bad – the left rear corner is smashed up, so the lights are gone, the bumper is gone, the tailgate and the rear panel are damaged (of course, there could always be hidden damage to the frame). However, that damage, fixable as it is, could well be more than what the car (a four-year-old minivan with relatively low mileage) is deemed to be worth. That to me would be the worst possible outcome – I’d get a check for six or seven thousand to buy… what?

So is there anything I can do to mitigate the chances that the insurance company will declare the car totaled?

Another question: is it possible to sue the culprit in small-claims court? It’s not impossible that all the running around I’ll have to do on account of the car will cause me some actual financial losses. The cops told me the guy is 100% responsible, and so his negligence as a driver is a given. Why should I have to take financial losses because of his negligence?

More generally, any useful advice from the teeming millions would be appreciated.

2

The other insurance company will make you an offer. This is one you can refuse. Right now you should go to a reputable garage and get an estimate for repair and a reputable dealer and get an estimate for replacement. This will give you bargaining power. One thing they may try is to say that they can find you a replacement for less than you want. Call their bluff: say, “Well, if you’ve found a suitable replacement, and you can guarantee it’s in the same condition as my one was, please have it delivered on Monday.”

3

As I recall, in my jurisdiction, you can get the check for the value of the car as it was undamaged, and then the car becomes property of the insurance co, but you can buy it back for its damaged, wrecking yard value, and use the cash surplus to make repairs yourself. It’s up to you to decide whether this cash difference is economically viable or not.

4

As it is in Australia, so in the US. Dunno about Massachusetts specifically though. Here’s the general dope on what to expect.

This doesn’t have to suck, and you don’t have to lose anything at all. Except maybe a little time and some inconvenience if you need to replace the car, but hey, life contains a particle of risk and stuff just happens sometimes. If enough people felt it was a big enough deal then there would be laws requiring you to be paid for the effort of replacing your car when you’re not at fault. To the best of my knowledge, there are no such laws. Find something to be grateful for and keep that in your thoughts.

The value of your car is central to its fate right now. Laws vary from state to state but generally you are owed the lesser of: fair market value of your car OR the cost to restore it to its pre-loss condition. Determining whether or not your car is totaled, however, is a little more complicated than that. In Nevada, for instance, your car MUST be totaled if the damage (not including paint labor & materials) exceeds 65% of the car’s value. Some other states give more discretion to the insurance company and let them make the determination according to the expected net cost of totaling the car (market value + rental expenses - anticipated value of the salvage) vs. the expected cost to repair it properly. What all this means to you is–know your car’s value. Do a bit of research (NADA, Autotrader, etc.) and try to determine what you’d have to pay someone if you wanted to buy YOUR car from them. Use multiple resources.

If the car is repairable, cool. You are typically owed a rental car while yours is in the shop. If it’s totaled you’re going to get an offer from the insurance company to buy the car off you. As TheLoadedDog noted, you will have the right of doing what is known as an “Owner-Retained” total loss settlement. You get less money, but you get to keep the car. In Massachusetts you will be required to get a salvage title and the value of the car will be hurt as a result. So it’s a good deal if you don’t mind having a branded title, a wrecked car and not enough money to fix it. You’ve got a 4 year old minivan? Just bite the bullet and take the total loss settlement.

Well, you’d get a check for the cost of a four-year-old minivan with relatively low mileage; presumably you’d go out and get yourself a four-year-old minivan with relatively low mileage. Unless it’s one of the rare Maserati minivans this shouldn’t take much more than 5 minutes to find.

There really isn’t anything you can do to sway the total loss or repair decision one way or the other unless it’s a close call. Numbers is numbers and more often than not the decision is an economic one.

You probably don’t have to sue anyone either. If you can demonstrate a real financial loss, you will be compensated. Ask the claim rep about “loss of income.” If you can present a reasonable argument for why you’ve lost a specific amount of income as a result of losing the car then you’ve got a good chance of getting paid for it. But if you’re just bent because this has put you out and by God someone’s going to recognize that your time is worth something … well that’s not enough to get the law on your side. The loss of income needs to be tied to your vehicle. A dump truck is a good example. Not a lot of rental dump trucks, so the driver is losing money every day he doesn’t have a truck. If your car is just a commuter though, you’ll be put in a comparable-sized rental so no loss.

5

Inigo, thanks. That’s the straight dope right there. Putting in for loss of income as part of the settlement is an interesting angle that I had never heard of. It’s kind of conjectural at this point (I’ve got an apartment to show that depends on my having a car to get there). However, it looks like I can get a rental that will probably mitigate that problem.

And how I dearly wish I could be reimbursed for the vast amount of time I know I’m going to spend on this. The other hellish thing about having your car totaled (and I just know it’s going to be touch and go) is then having to buy another car. Damn it, I just went through that a few weeks ago!

6

That’s what I did after a huge hailstorm, and drove around in a paid off truck that looked like a golf ball. IIRC, the check was around $4.5k and I bought it back for 100, so they wrote the check for $4.4k.