I learned today that my '79 BMW, which was recently in an accident, may be declared a total loss. The damage, by the way, is almost entirely cosmetic, but because of the car’s age and low value, it looks very likely to be totaled.
If this is the case, can I nonetheless insist that my insurance company contribute the same amount of money toward its repair as they would given me for the total loss? If I choose to keep driving the car regardless and fix it later out-of-pocket, would my insurance company be willing to continue covering it? What would be the usual outcome of
a situation similar to this?
I don’t know if they’ll reinsure you fully. They should be at least able to cover you for liability and you should be able, if they total the car, to buy it back from them.
If you insist that your insurer contribute the amount of the repair, be prepared to take a deduction from that amount for the salvage value of the vehicle. When an insurers declares a vehicle a total loss they retain the salvage and sell it in an effort to recover some portion of their payment.
The theory behind this is if the insurer totals the vehicle, then they are paying the value of a like, kind, quality vehicle. You have been just indemnified or brought back to your economic position prior to the loss. If you also have the totalled vehicle, then you’re in a better economic position because the vehicle has value. Payment + salvage value = more than what you had before. Insurers don’t like that equation.
You can reinsure the vehicle with a salvage title. You didn’t indicate your state of residence and I’m too lazy to check your profile if you updated that, but your state of residence may or may complicate the salvage issue. Regardless of the state you reside in, they do have a process to retitle the vehicle as a salvage vehicle. With a valid title you can now insure. Each state requires insurance to be available in some form to their residents.
I worked in claims for an insurance company for three years (too long).
Anyway, my first piece of advice is to haggle over the total loss price the insurance company gives you. Never accept their first offer. Do your own research, look through newspaper ads, search the Internet, and get prices for vehicles comparable to your own. Present them calmly and completely to your claims representative.
Usually insurance companies use services to determine the total loss price. These services rarely have any justification for the price, and they will lowball you practically every time. Ask a lot of questions of the claims rep as to how he/she derived at the settlement offer. Ask for lots of details, and don’t settle on “it’s in a database” crap. Databases are only as reliable as the data put into them and most of the ones insurance companies uses are worthless.
If you reach an impasse on price, ask the claims rep for them to have their appraiser to estimate the value. Often a human estimator can do you a lot better than the services used.
If you think your insurance company is being grossly unfair, contact your state bureau of insurance commonly called an Insurance Commissioner. Let them know if you are unhappy with your insurance company’s settlement of your claim and why.
I know that you are attached to your car. However maintaining a totaled car may be more problems than what it is worth. As galyean stated, there is the salvage title issue and the deduction for salvage value. Also your current insurance company can deny covering the once totaled car. Titles vary from state to state, and coverage varies from insurance company to insurance company.
BTW… Salvage Value is a rough estimate at what the car could bring at a salvage auction.