My wife just got rear-ended. Please help!

Factual Questions
1

So yesterday my wife was rear-ended in her car. Totally the other guys fault. She was not seriously hurt, just a little sore. But the car is totalled. Fortunately, a police officer happened to witness the accident and gave the guy a ticket. But herein lies the problem, the insurance company is only going to give us the value of the car. The loan amount is well above that at this point. Even if we did get that money, how are we supposed to buy a new car? Are we on our own?

Basically my question is what do people do in this situation? I guess we can press the insurance company to fix it. Or can we take the other driver to small claims court? What does the collective mind-power of the doper masses have to offer? I’m starting to go into panic mode. Thanks everyone!

2

  1. Go to a doctor NOW and get tests done. Many people don’t feel the hurt until a few days later and then wonder why they have such pain. You need to get it documented as soon as possible.

  2. See a lawyer as soon as possible, especially if he or she specializes in auto accidents. Your problem is a pretty common one, and without someone looking out for you, you are likely to be screwed by the insurance company, who doesn’t have your best interests at heart. It probably won’t cost you anything, and most lawyers will work on a contingency fee basis, especially when liability is clear as it is here.

Seriously, the longer you wait, the less powerful your case. Don’t go into this thinking “Hey, I can make some money!” but go in thinking “I need someone to look after my interests and make sure I get at least enough to cover the cost of a new car and the doctor bills that may accrue.”

Michael A. Ventrella, Esq.

3

The same thing happened to a friend of mine recently, and the general consensus was, “that sucks.” I know, it’s harsh. Without knowing any of the details of your financial situation, I don’t have any immediate advice, but I would like to clarify an assumption in your post: when you ask, “how are we supposed to buy a new car?” I assume you mean a replacement car, and not necessarily a new one. Given the amount of financial loss here (I’m guessing on the order of $5,000 - $10,000, depending on the car) you should

(a) Call up the IRS and ask if you can claim the difference between the payment and the debt as a loss in income on this year’s taxes. If the loss is great enough, you could get bumped down a bracket, and save potentially up to a third of the loss in recouped taxes this year. I’m no accountant, though, and I use the 1040EZ, so look for an expert to answer this. Something is itching in my brain that says payments on the principal, but not the interest, are deductible.

(b) Look at a used car with a reputation for reliability (Honda, Toyota, Volvo). You have been forced by fate to abandon some of the luxuries of a new, loaded car. I don’t know how the car situation is in your family–if this was the only car in the household, you might spring for a dirt-cheap new Corolla, no options. Military bases often have a used-car lot where soldiers heading overseas sell their wheels rather than pay for storing them during a long tour. These cars are well-maintained, occasionally obsessively maintained. Because the military stresses integrity, you will probably–but not definitely–be buying from someone who will be honest with you about any problems the car has.

© Ask your insurance company what people normally do in such a situation, and talk your way up the chain of command there–get a manager to talk with you, or even a manager’s manager. Tally up the insurance you’ve paid on this car and explain that you paid them $SUM to insure that you wouldn’t get the shaft if and when the car was totalled, and now they’re going to give you $SMALLER SUM and walk away? If the difference between the two is larger than the amount you have left to pay on the car, you might be able to get them to pony up a little bit more cash. I don’t hold out a lot of hope for this method: my friend is now stuck making two car payments, but the second one is very small… just like her new (used) car.

(d) Take your wife out to a really nice dinner this weekend, and spend the evening enjoying the blessing that is her company, being thankful that she’s okay.

4

Thanks for the great, practical advice so far. Good stuff. As I write this, my wife is at the doctor. My wife has back problems as it is so this didn’t make things better. She had a lot of pain this morning. It’s just not clear whether this is new injuries or old ones that are irritated.

5

Unfortunately, this is a risk of being “upside down” – owing more on a car than the fair wholesale market value of the car. The insurance company is responsible for paying you what the car was worth, not necessarily what you owed on it.

Unfortunately, it’s all too common – car dealers love to slip in the line about “negative equity will be applied to new loan balance” as they happily take your trade-in and give you a new car.

You may be able to negotiate more out of the insurance folks, but, sadly, I think you’re out of luck here.

  • Rick
6

Can you amplify this? With down payment and typical loan terms, it’s generally the case that the value of a car exceeds the loan amount remaining. (Indeed, banks tend to set things up so this is so - that way, they can recover their money in case of a loan default.)

7

Getting on the phone and cussing out the adjustor don’t work, I tried that one time. But I did get them to give me the sales tax on what they were giving me. If you have an outstanding loan on the car that is a reasonable amount you will get it paid off and you should get a little equity for a down payment. If the person at faults insurance won’t pony up just go thru your company. the fact that you have a loan out for the car most likely means you are supposed to have sufficient coverage to cover a loss. Since you know who caused the accident you likely have a waiver of any deductables.
Just don’t make any quick settlements untill you are happy you are getting the best deal possible.

8

Such CYNICISM…and much of it coming out of ignorance. Lemme help yas.

  1. Have the wife keep a journal–a very descriptive one–in which she documents any pain or lack of mobility resulting from the accident. Do this for the duration of the claim.

  2. If you do enlist the services of a lawyer, make sure you do as Mike Ventrella advises and do it on a contingency fee basis–there’s no sense in promising 1/3 of your settlement to someone else when you don’t even know you’re going to get “screwed.”

  3. As far as the car goes:
    a) Forget trying to “press the insurance company to fix it.” If it’s declared a total, it’s done for. There is no way an insurance company is going to let you talk them into creating an appearance of forcing you to accept a repair on a standard, garden variety total loss.
    b) By statute, you are owed the fair market value for your car. Not a penny more, not a penny less. KELLEY Blue Book will give you an inflated value for your car. Don’t even consider using it as a reference. Go with NADA, Cars.com, Autotrader.com, etc. to see what the real world sells your car with similar mileage for. Then you’ll know if the insurance settlement for the car appears fair, and what to say when/if it appears low. I’m sure I know what you’ll say if the offer is higher than what you are expecting, so let’s not start screaming “Thief!” just yet.
    c) If you owe more on the car loan than the car is worth, look at it this way: The day before the accident you had a car worth $5,000 and a loan for $8,000–you were in the hole $3,000. The insurance company will pay the loan down by $5,000 leaving you with an unsecured $3,000 debt. If you finance another $5,000 car (for $5,000 please!) guess where you are: $5,000 car with $8,000 debt. If you manage to get the dealer to roll all $8,000 into one car loan GET GAP INSURANCE. They know what that is if you don’t.

  4. Jurph gives good advise except for “Tally up the insurance you’ve paid on this car and explain that you paid them $SUM to insure that you wouldn’t get the shaft if and when the car was totalled, and now they’re going to give you $SMALLER SUM and walk away? If the difference between the two is larger than the amount you have left to pay on the car, you might be able to get them to pony up a little bit more cash.” If YOUR company is handling the claim, all they are legally and ethically bound to pay you is, that’s right, the fair market value of the car. Insurance policies are NOT investments, they are insurance policies: renewable contracts to ensure that you are indemnified for the loss of a piece of property (car) for a certain value (fair market value) for a certain period of time (6 months usually). The payments that you make go to cover other peoples’ claims, just like theirs are about to do for you. And I think Jurph’s brain itch refers to interest, but not the principal, on home mortgage payments being deductable.

"likely to be screwed by the insurance company, who doesn’t have your best interests at heart" this is simply an assinine thing to say. An insurance company can lose its right to exist in a state if even gives the appearance of making it a policy/habit of behaving this way. More often people who get “screwed” were ignorant of their rights (translate: thought they were entitled to more than the law provided) or just didn’t understand what they were told by the claim rep–which is the customer’s fault for not demanding clarity.

most likely means you are supposed to have sufficient coverage to cover a loss. Since you know who caused the accident you likely have a waiver of any deductables. No (nobody owes you anything but the fair market value) and No (they are bound by your contract to charge you the deductible)…

9

I’m confused; how do you owe more on the car than it’s worth? Does it depreciate that quickly?

Can someone throw some sample numbers to clarify this for me?

10

It’s not uncommon, especially if you finance 100% (or more if you are trading in a car with, let’s say $4,000 owing on ITS loan and the dealer does you a favor by rolling all the debt into one big loan) of the purchase price.

Also: some cars can depreciate as much as 20-30% in the first year; others, like Daewoo lost 80% or more of their value when the company went bankrupt (taking any warrantyies with it).

11

Again, fabulous advice which I appreciate. What if I asked the adjuster for the value of the car and paid the difference between that and the estimate? I think that would be about $800 which would be much cheaper than the $2500+ I’d be out otherwise. I’m not sure if they would do that though! This is my first experience with car insurance. I have a squeaky-clean record! :slight_smile:

12

A. It’s a Saturn. (Which I understand don’t hold their value well)
B. It’s a dime a dozen car. No extras. No flash.
C. I’m in Minnesota and our winters are not nice to vehicles.

My wife purchased this before we were married so I’m not sure what she put down on it, if anything. Sucks though, I can tell you that.

13

Y’know, from the title I expected this thread to be on a totally different topic, and WAY more exciting.

BTW the best of luck with it all.

14

Did I mention the other guy was Elvis? :wink:

15

[slight hijack]

Is this always true? Because I got Blue Book value for my car when it got totalled. Just curious…
[/slight hijack]

16

I’ve been an insurance adjuster for 25 years and I know from whence I speak. Some good advise by Bricker and Matchka. Some of you don’t have a clue.

The insurance company, whether it’s yours or the other guy’s, is only obligated to pay you the Actual Cash Value of your car immediately prior to the accident. No more, no less. Most states also allow you to collect sales tax from the insurance company but that’s about it. To pay a lawyer anything to help you collect on your property damage claim is just not good sense. If the value of your car is $6000, that’s all you’re gonna get. To pay a lawyer 1/3 of that is just a waste of money.

The insurance company does not consider the amount of your loan in it’s settlement. You could spend $10,000 for a car that’s only worth $5000 (not likely but possible) and you’ll only get the real value of the car.

They should be able to provide you with the basis of their evaluation. How did they arrive at that figure? The absolute best way to show the adjuster that their value is low is to find a comparable car in your area for sale. You can subtract a few hundred dollars from it’s advertised price to come to the actual selling price. The best the books can do is a regional value.

Kelley Blue Book is usually about 20% higher on the value than reality. Edmunds.com has a good article about why KBB is not a good resource when trying to establish the value of your car. NADA is my favorite because it is actual sales of similar vehicles and the database is from reporting dealers, not just some yahoo’s opinion as to value.

You can hire a lawyer if you want, but remember that they will take a percentage of your settlement. People hire lawyers for a lot of different reasons. Some don’t feel qualified to negotiate with the insurance company. Others just are too busy to be bothered. Still others think they won the lottery. :rolleyes:

Liability is clear in this case so the only argument is the value of your wife’s injury. I’ve suggested to my clients that if they want to try to negotiate with the adjuster directly, they may get a better settlement than going through a lawyer. If, however, the adjuster is a flaming ass now, you can pretty much figure that s/he won’t be very cooperative when it comes time to settle your injury claim.

Best of luck to you and the Mrs. This is a tough situation to be in.

17

Don’t know if this will help, but I"ve been in enough accidents to have learned some things. (Not saying how many, none were my fault, I swear I have a bullseye painted on my butt -no comments please haha)

If the insurance company gives you a number you do not like, you have the right to ask them to tell you where they got that figure. If you feel that figure is inaccurate you can supply your reasoning for a higher figure. In my case, the other person’s insurance company was smoking crack and offered me an amount that was “unacceptable”. I said ante up or find me a similar car at that value if you think I can find one for that amount. They called me for a week with older cars with much higher mileage before adjusting their figures to a comparable value.

And whiplash tends to hit about the end of the 2nd day…third day is brutal. It goes away but is a hideous headache nonetheless.
Best of luck!

18

One key question here is that the OP said “the insurance company…” – which insurance company: yours or his? While your collision coverage may be tied to the value of your car, his liability insurance should (in any fair settlement) make you good for your losses as a result of the accident. No fault/at fault laws in your state will definitely affect how this works.

But you have every right, absent some oddity in your own state’s laws, to sue him (not the insurance company) for whatever losses you have incurred due to the accident. And changing from having a functional car with a liability of X amount more than its fair market value, to having no car and still owing the fair market value plus X amount, is a definite loss to you.

I’d suggest consulting a good lawyer, or making arrangements with your own insurance company to invoke a good lawyer, to determine what you are actually and legally entitled to. Sometimes just the threat of a lawsuit will be sufficient to get the adjuster off the dime and settle for an amount that compensates for your losses.

(And don’t forget whatever expenses you’ve incurred as a result of the accident – if you had to rent a car or take a cab or whatever, that’s a valid loss.)

IANAL, and what I write above is based on my own experience with an accident with a major claim in excess of fair market value of car involved. But I’d definitely consult with an attorney. Many will offer a first consultation free; it can be highly profitable to them to get a case, and they’ll offer you a free first consultation as a “loss leader.”

19

I spoke with a couple lawyers today and none sounded real interested. “If your wife decides to pursue the personal injury, let us know!” Great. Thanks. I don’t think this is a real lucrative case. The driver of the other car got an “inattentive driving” ticket. A lawyer told me that this type of ticket means he will have to go to court. He told me to ask the prosecutor to roll the cost of our losses into the restitution. So that is an option. My wife is real upset about this. The adjustor was nice enough to give us the value of the vehicle plus a refund on the vehicle tabs not used. We figure that’ll be another $20. She was so enthusiastic about it. But hey, it’s not her fault.

The insurance company of the other driver is Geiko. When I told my agent this, he laughed and said “This should be interesting.”

20

I don’t have any legal advice, but i can speak from vicarious experience. My girlfriend was in an accident about a year ago, and it sounds lke the situation was very similar to your wife’s:

[ul]
[li]totally the other guy’s fault[/li][li]she was rear-ended (while stopped dead at a red light)[/li][li]she got a fair amount of whiplash-related pain over the next few months[/li][li]the insurance company wrote her car off[/li][/ul]

The first thing that happened was that her own insurance company paid her out for her car, and i assume they then went after the other guy’s insurance company to make up for this (?). I don’t know how close to the Blue Book value her payout was, but it was exactly the amount that similar cars were going for in the local market (internet, newspaper, etc), so we felt that the payout was fair.

She had to make a fair few trips to the doctor and physical therapist to deal with the pain of the accident. She contacted the other driver’s insurance company about covering the costs of that medical treatment. They stalled and treated her like shit, so she did something she didn’t want to have to do–she went and got a lawyer.

This was the best move she could have made. He took her case on a contingency basis, and went to work. All she wanted, when she decided to retain this guy, was to get the at-fault driver’s insurance company to pay for her medical bills. One of the best things about having the lawyer was simply the fact that she no longer had to worry about calling people, arguing on the phone, worrying about compiling records of correspondence, etc. Every time she got a bill for medical service, she just passed it on to the lawyer. Every time the hospital or the insurance company wanted to discuss the case, they had to speak to the lawyer. It was a real burden off her shoulders.

In the end, after much to and fro between the lawyer and the insurance company, a payout amount was agreed upon. After the lawyer covered his expenses and took his contingency fee, my girlfriend received the cost of all her medical treatments, plus a little over $2,000 in damages. If the dumbasses at the insurance company had paid up in the first place, they would have saved themselves the lawyer’s fee plus the two grand, 'cause all my girlfriend wanted was to cover med expenses.

So i certainly second the advice of those who suggest that you get a lawyer.