At least in the US, insurance companies can “total” a car that has been in an accident, treating it as a total loss. If this happens, the owner might be able to obtain a “salvage” title to the vehicle that comes with onerous restrictions on usage.
I may have the opportunity to purchase a now-classic muscle car once owned by my grandfather. If I end up buying it, I most likely would not use it on a day to day basis to drive to work but would save it for holidays and hot dates. What is fairly clear is that the car would have a lot of sentimental value that goes above and beyond the book value of the car.
If I ended up being in an accident with that car (whether or not it is my fault), could I prevent either my insurance company or the other insurance company from totaling it by agreeing to pay enough myself to make at least some of the repairs?
E.g.
<ring ring>
Me: “Hello?”
Agent: “This is John calling from Insure-U insurance, calling for robert_columbia.”
Me: “This is he.”
Agent: “Yes, I’m calling about the accident you were in recently. The driver that hit you was insured with us and we are letting you know that we are totaling your Charger.”
Me: “Umm, that car has sentimental value for me. I can put up some of my money to help out, its worth that much to me, it doesn’t need to be totaled. My grandpa took grandma to Makeout Point on Lovers’ Lane in this car and made my aunt right in the driver’s seat!”
Agent: “You don’t understand, sir. We don’t care about that, all we care about are numbers. I know that the only damage was a dent in the door and a knocked-off bumper with no frame damage, but my book here says the car is worth 50 and that means that, in our book, any damage means it's totalled. If you do not turn over the car to Joe's Junkyard within 30 days, we will notify the DMV who will take enforcement action against you."
Me: "!@#% I’m taking you to court! I’m not losing this car!”
What the insurance company would actually do is offer a cash settlement, or a slightly larger cash settlement if you turn your car over to them. You are always welcome to take the cash and keep the car. The difference is the scrap value of the vehicle.
Well, firstly, a salvage title carries no restrictions on usage in any locality I’m familiar with. It will make your car worth significantly less, and may make getting financing or collision insurance impossible but in the situation you describe where the car isn’t worth much and you probably wouldn’t sell it anyways, a salvage title shouldn’t be a big deal.
Furthermore, although it varies from state to state and insurance company to company, usually if you buy back a jalopy that’s just been totaled for cosmetic damage, that won’t automatically give it a salvage title. In my state anyways, I think the damages have to exceed 10 grand (or something like that) before they require a salvage title.
Also, if the car is actually a “classic” from the 70’s or earlier, there are whole other books that are used to assess their value and they are usually pretty generous. I’ve been hit a couple of times in my “classic in name only” cars and was pretty surprised at how high the “totaled” value was (like my $500 truck would have totaled out for $5k). A friend and I jokingly talked about buying a bunch of $500 “classics” and parking them at the bottom of hills during winter as a money-making scheme!
TBH, go for just liability to keep legal. If you are not interested in claiming money for repairs [which is when they decide total out or pay for repairs] then don’t put in for additional coverage. That way if you do a crunch and dent, the other person in the accident gets covered and you tow the charger home and bang on it til it works again.
I think you may be totally mistaken about that. If the damage to your car is more than they think the car is worth, they can give you a check for that valuation amount, minus its value as scrap ($300 in my case a few years ago) and let you keep the car. The title never gets affected in any way, although it will surely show up on your CARFAX report, and I suppose you’ll need a new car insurance policy.
A few years ago, my car was totalled in two separate accidents. I posted my story on the SDMB, and you can read it here.
I’ve had several cars totalled out and never had to change the title. They just deduct the “scrap value” of the car from the total value and give you the difference. IIRC, the last one (about 10 years ago) was 20% for scrap value.
My wife drove a “salvage” title car for years. There were no restrictions on usage. However, as others have said, we couldn’t get collision of comprehensive insurance on it. Just liability. But that was fine with us – it wasn’t worth much, she just used it for a short commute.
ETA: She did have to get a mechanical inspection to make sure it was safe before the DMV would allow it to be driven, but it passed.
I’m pretty sure no insurance company can compel you to surrender your car. The most they can do is offer you a settlement in which having your car junked is a condition of the settlement. If you don’t want your car to be junked, you can refuse the offer.
I had a 1967 Karman Giha. I was hit by someone running a red light. His insurance company wanted to total out the car. They began asking me questions about how much I had paid for the car and how long had I owned it. I asked why they wanted to know that and then they told me they lthought the repairs were going to be more than what I paid for the car. My answer was that I wanted my car running. I was assured that I could have the car. That was when I informed them that I wanted my car in the condition it was in before the accident with no bondo front end or another 1967 Karman Giha in as good or better condition then mine was.
They paid me about $200 more than I paid for the car 5 years earlier. And I was able to restore my car.
The NADA guide includes 60’s and 70’s muscle cars.
My experience: I have a '71 Corvette in excellent condition. A few years ago I was rear ended. The adjuster from the other ins co came out and admitted he had no idea what it would cost to get it fixed. His computer didn’t go back to '71.
I showed him 2 estimates I had gotten from local Corvette shops. They averaged $9K. Adjuster said he would have to check the book value to see if they would total it. Next day he called to say the check for $9K was in the mail. I checked the book value and my car listed at over $40k!
You want to insure the car through a classic/special interest insurer. They will give you an agreed value policy which will be more appropriate for a car like that. As a bonus, they usually cost dramatically less because they require proof that you have a daily driver. I like Hagerty for my 67. $15000 agreed value, 200 mile flatbed towing, only $250 per year.
If the damage to the car is $XXXXX, and
If(The fair market value)-(estimated salvage value)+(othre claim expenses like car rental) = less than $XXXXX
Then: your car is a total loss. In other words, it is more cost-effective to replace your car than it is to embark on the repair process. Note, a comparable vehicle does not actually have to exist to replace yot car. Legally, your car is just a bag of money. The only real question is how much money was in the bag before the accident.
If your car is a total loss you have 3 options.
surrender the car and take the money
keep the car and accept $XXXXX - (estimated salvage value), insurance company will require your assistance in complying with your state’s title branding laws–which vary wildly from state to state
withdraw your claim entirely. You are personally still required to comply with your state’s title branding laws. Whether you choose to do so is entirely up to you.
Disabusing:
No insurance company will pay less than the complete estimate, even if that’s what you want, simply to avoid totaling a car. Doing so would allow someone to accuse them of knowingly underpaying a claim and that can create a shitstorm.
Agreed value/stated value policies are not always an option and obtaining them is not as simple as saying, “I wanna insure my '72 Pinto rust-bucket for $20k.” Often a professional appraisal is required as part of the application to ensure the value of the policy is reasonable. Also, such policies often have restrictions on how much the car can be driven and under what circumstances (fewer than 1500 miles/year and only to, from and in parades, car shows, and other special events). This is NOT an option for finding cheap insurance for your 1980 Lamborghini Diablo.
Salvage Title = Not roadworthy and cannot be licensed for use on public roadways
Branded Title = Formerly salvage, but has been made roadworthy through repair and inspected by the State Patrol.
Not all Salvage vehicles can be upgraded to Branded. Flood vehicles, especially those flooded by seawater or brackish water, are examples (depending on your state). For instance, Texas titled vehicles immersed in seawater (perhaps from a hurricane surge) up to the rocker panel must be salvaged and may not be rebranded in any state (legally). That means you can’t take the '72 Corvette that was immersed to the rockers in salt water during a hurricane and do a complete strip-down restoration and call it roadworthy. The VIN was killed when it flooded.