Anybody Totaled a Car and Got Close to Replacement $ back from Insurance? [Archive]

Andrew More

06-06-2022, 10:21 AM

Used car values are always a bit variable. Kelly Blue Book can also be a bit tricky, since most people just look at the highest value, and it depends on whether you sell it yourself, or trade it in at the dealer. So with all that, your insurance company is probably going to try to get the best deal it can, which usually isn't as good for you. You can then argue a bit with them, but I wouldn't expect much.

Personally I don't carry collision, but I also don't like insurance for relatively low values, and I drive old cars. Insurance to me should be about hitting the "jackpot", ie something that would otherwise be catastrophic, not little payouts.

Robert Engel

06-06-2022, 10:35 AM

My one son who lives in Denver had a 2001 Honda CRV that I gifted to him, which had the catalytic converter stolen.

The insurance paid for the replacement, 3 days later it was stolen again.

They totaled his car, and I was shocked to learn they gave him $3500 for it, which was probably 3X what it was worth according to the book.

With the replacement costs of vehicles now, I would have collision unless it was an out'n'out beater. Comprehensive covers more than collision, as in the catalytic converter theft, vandalism, cracked windshields, etc.

Lee Schierer

06-06-2022, 10:38 AM

Book value for a car you own and retail value for the same car are never going to match even if you can find the exact same model car from any car dealer new or used. In a private sale you might get close.

Mike Henderson

06-06-2022, 10:39 AM

I believe most insurance companies use another company who does a "valuation" of your car - pre accident. They look at sales of cars of your model and year and do some adjustments. If you keep your car in excellent condition, you'll probably get shortchanged because they go on the "average" car of your model and age.

Regarding dropping collision, the question is can you withstand the loss of the car? If you have an accident that's your fault, you will not get any payment. If the other person is at fault, their insurance company should pay you, but collecting can be a problem.

We have two old cars (2005, 2007) and have dropped collision. The cars don't have a lot of value as used cars and I feel we can withstand the loss.

Also, if you have an old car, even if the damage is minor, the insurance company will declare it a "total loss" and want to take your car. The cost to repair only has to be about half the blue book value for them to declare it a total loss - so even a minor "fender bender" can total loss your car (you would be amazed at how much it costs to repair a fender these days). If you refuse to let them take the car (which is your right), you get a reduced payment for the damage and you have to deal with a "salvage title" on the car. If you don't carry collision, you can do what you want with the damaged car - you can pay to fix it, or sell it to a salvage yard. If you pay to fix it you don't have to deal with the salvage title problem.

Getting a salvage title in California is a challenge, and after you get it, it seriously reduces what you'll get for the car when you go to sell it.

Mike

[The reason you purchase insurance is to protect yourself from debilitating loss. For example, you purchase insurance on your home because if it was destroyed you'd have a life changing loss. You carry collision insurance on your new car because if it was totaled in an accident, you'd have a serious financial loss. Once you can stand the loss - when your car gets old and is worth only a few thousand dollars - it's not unreasonable to drop collision insurance. Carrying collision on an old car can be a losing proposition because the insurance company will just declare it a total loss, even if it is repairable at a reasonable price.]

John K Jordan

06-06-2022, 10:40 AM

Andrew More

06-06-2022, 11:45 AM

With the replacement costs of vehicles now, I would have collision unless it was an out'n'out beater. Comprehensive covers more than collision, as in the catalytic converter theft, vandalism, cracked windshields, etc.

Sure, but it's not cheap. Let's be really clear about what insurance is, it's a form of risk management* and the people selling the insurance come out ahead by design. (I'm hesitant to call it outright gambling, though it has it's roots in the gambling houses of Europe) The issue with all these additional "services" that are covered is that the rates go up, and so you really don't come out ahead, IMHO. Also depending on the converter that would be enough to total my cars, neither of which I'd consider an out n out beater, but they are pretty old (2003 and 2006). There are a lot of variables, but usually a few months of premiums would be enough to pay for these services, since the insurance companies know they're much more likely to payout for them.

Also I should be honest and say that I'm likely to do my own work, which makes a lot of these lesser problems potentially even cheaper. Given this is a DIY forum, I'd guess people here are more likely to do their own work than other places.

Jim Becker

06-06-2022, 12:22 PM

There was a time when it was more common for folks to drop collision coverage on older vehicles. It's not as popular anymore I suspect because of both the cost of repair and the cost of replacement. So much of the repair scenario involves assemblies rather than just parts and that impacts repair costs, too. Personally, I don't drop the coverage, but we rarely will keep something more than about seven years, too.

Lee DeRaud

06-06-2022, 10:04 PM

Also, if you have an old car, even if the damage is minor, the insurance company will declare it a "total loss" and want to take your car. The cost to repair only has to be about half the blue book value for them to declare it a total loss - so even a minor "fender bender" can total loss your car (you would be amazed at how much it costs to repair a fender these days). If you refuse to let them take the car (which is your right), you get a reduced payment for the damage and you have to deal with a "salvage title" on the car.
How does the car end up with a salvage title if you don't let the insurance company take it? There is no change of title in that scenario.

Mike Henderson

06-06-2022, 11:36 PM

How does the car end up with a salvage title if you don't let the insurance company take it? There is no change of title in that scenario.

I wish that was true, Lee. What happens is that the insurance company informs the DMV that they have declared the vehicle a "total loss". If you keep the vehicle, you get it repaired and then you have to go to a company that is licensed to inspect the vehicle for lights and brakes (about $150). Then you take your vehicle to the DMV, with your old title, the inspection report, and they inspect it. If all is okay, they issue you a "salvage title" and you can keep using the vehicle legally.

If you give the vehicle up, the salvage company auctions the car off. Then the buyer can repair the car and go through the same DMV procedure to get a salvage title.

The thing that initiates all this is the insurance company reporting that the vehicle is a "total loss". And the repair cost only has to be about half the blue book value for them to declare it a "total loss'.

Don't ask me how I know this. It's a pain.

Mike

[That's why I dropped the collision insurance. If I have an accident, the insurance company is out of the loop and does not report the vehicle as a "Total loss". I can get it repaired (if I want to) and there's no salvage title. If I sell it to someone else, they can repair the vehicle and there's no salvage title. If it really is a "total loss" I can sell the wreck to a salvage company.]

Jason Roehl

06-07-2022, 5:21 AM

My son's used car was totaled (by someone who ran a red light and died in the wreck, son didn't have a scratch) and he got back more than he paid for the car, enough to buy a newer model.

I have argued with an insurance company about a motorcycle (hit by someone pulling out in front, friend using it broke his leg). It was the other guy's insurance and they made an offer, I rejected, after some "discussion" they met what I thought was reasonable.

I have also found that good written documentation might help when a wreck is another person's fault. When a guy fell asleep at 2am and clipped a power pole, his insurance company was initially not agreeable to paying any of the $6000 repair bill on my vehicle. (a very exciting few seconds, I had five in the car, fortunately no one was hurt.) I provided six pages of printed documentation, complete with diagrams, photos, and witness statements and they decided to pay. I happened to be wearing a suit when I delivered the document, on my way to a wedding or something. The agent told me later he thought I was a lawyer.

JKJ

A few years ago, my daughter was backing out of angled parking in a parking lot, when she got clipped by an unlicensed (but the vehicle was insured) driver going the wrong way, and way too fast. The cops wouldn’t let the other driver leave in the car until someone with a license could drive it away. Anyway, the other insurance company was a rag-tag operation out of Illinois, and kept dragging their feet on the $700 that it would cost to fix my daughter’s bumper (which we had no intention of having a shop fix—my son jerry-rigged it back on), which was about 1/3 of what we paid for that car. Finally, I wrote a neat, little, formal letter to that company that included something along the lines of, “I’d hate to have to get a lawyer involved, as your costs will go up significantly.” The check arrived a few days later.

roger wiegand

06-07-2022, 7:58 AM

My daughter recently totaled her car (#3? I'm trying to forget-- no one hurt in any of the instances), insurance (in CO) paid out about $5K more than she paid for the car a year earlier. She complained about how long it was taking and they gave her $500 of Uber credits to use. This is not how I grew up thinking about insurance companies.

Looking at the used market she should readily find a similar replacement with the payout. I think the high price of used cars has also increased the value of the wrecks. Someone will fix her car and resell at a tidy profit, no doubt.

Ron Selzer

06-07-2022, 11:20 AM

December of 2021 wife and I t-boned a guy who ran a stop sign. 2015 Ford Mustang 110,000 miles, v-6, automatic got around 20k for it after arguing with our insurance company who claimed it could be replaced for that. Could not be replaced for less than 22-24k, however wife wanted a SUV, so settled. Guy had General Ins, who has refused to pay anything claiming he was delivering for Door Dash. So far, my company has been paying for car and medical, do have a lawyer working on this case. Will see how long it takes and how it turns out.
Definitely advise all to have uninsured/underinsured protection, property and bodily injury, on all of your vehicles
Ron

Maurice Mcmurry

06-08-2022, 9:08 AM

I crashed my girlfriends Dads new Volvo on a snowy morning in Ithaca NY. The Insurance company proceeded to try to steal the car from him. They insisted it was totaled and offered a very low pay out. He had a huge struggle getting a second opinion and estimates. He did finally get his car back and paid the deductible plus some.

Malcolm McLeod

06-08-2022, 1:27 PM

... The Insurance company proceeded to try to steal the car from him. They insisted ...

Reading thru this there seems to be a fairly strong consensus about the nature of insurance companies, so here's a bit more...

I was rear-ended on an interstate in Sept. '21 - - I was at ~10mph, with walls or stopped traffic on each side, the lovely lady behind me was on cruise-control at 75mph ('failure to control sleep' per the TX DPS). Totaled my car (and the other one too). She was a bloody mess, and I was in Lala-land for a few minutes. DPS, Fire, EMS, ERs, .. the whole gang was there. She had Allstate Insurance for her car. I had Allstate Insurance on my home; they'll want to take care of a customer. Right? ....So we'll let Allstate Insurance handle this. Rrrriiiiiight!

They offered a fairly quick and (IMHO) a fair settlement on my car - mostly to get me out a rental. Bravo! But they have now dragged the medical/lost time/etc settlement out for 9mo. The medical claims went to collection, so I finally paid them myself!! This has never been an issue with the $$ amount - just their sloth.

USAA has provided my auto insurance since I got a license, and has bent over backwards for every claim I've ever had - no matter the fault.

Allstate Insurance will never provide coverage for me for so much as a toothbrush.

Mike Henderson

06-08-2022, 2:59 PM

Lee DeRaud

06-08-2022, 3:42 PM

Reading thru this there seems to be a fairly strong consensus about the nature of insurance companies, so here's a bit more...

I was rear-ended on an interstate in Sept. '21 - - I was at ~10mph, with walls or stopped traffic on each side, the lovely lady behind me was on cruise-control at 75mph ('failure to control sleep' per the TX DPS). Totaled my car (and the other one too). She was a bloody mess, and I was in Lala-land for a few minutes. DPS, Fire, EMS, ERs, .. the whole gang was there. She had Allstate Insurance for her car. I had Allstate Insurance on my home; they'll want to take care of a customer. Right? ....So we'll let Allstate Insurance handle this. Rrrriiiiiight!

They offered a fairly quick and (IMHO) a fair settlement on my car - mostly to get me out a rental. Bravo! But they have now dragged the medical/lost time/etc settlement out for 9mo. The medical claims went to collection, so I finally paid them myself!! This has never been an issue with the $$ amount - just their sloth.

Being in an accident with someone with the same brand insurance is pretty much a worst-case scenario: "your" insurance company is basically negotiating with itself for any claim or settlement. All things considered, I'd rather be hit by an uninsured driver.

Lee DeRaud

06-08-2022, 3:51 PM

I've had USAA for 53 years. In the early days, it was a great insurance company. Recently, not so much. When I first joined them, they only took military officers. Then they opened to all military. Now, they take just about anyone.
For some very low value of "anyone": it's still just active military, veterans, and their spouses/children. I've never had USAA insurance, but I have a membership through my dad. They helped quite a bit with some logistics when my mom died, since all of her banking was also done through them.
https://communities.usaa.com/t5/Money-Matters/USAA-Membership-Eligibility-for-Family-Members/ba-p/176724

Malcolm McLeod

06-08-2022, 5:14 PM

I've had USAA for 53 years. In the early days, it was a great insurance company. Recently, not so much. When I first joined them, they only took military officers. Then they opened to all military. Now, they take just about anyone.

I realize they want to grow, but the quality of their customer service has not kept up with their growth.

Mike

Similarly, Bad Dad was the officer - and qualifier for my coverage via USAA CIC ('Civilian Insurance Co.' - IIRC).
USAA is still only officers and retirees (again, IIRC); not sure about enlisted personnel?
The CIC 'arm' covers former dependents - I know it extends to children & grandchildren, but not sure how far they will extend that relationship? (Never asked; not that old.)
I cannot report the same service deficit; I hope it was just that you caught them on a bad day.

Being in an accident with someone with the same brand insurance is pretty much a worst-case scenario: "your" insurance company is basically negotiating with itself for any claim or settlement. All things considered, I'd rather be hit by an uninsured driver.

Only my homeowner's WAS Allstate; my auto policy has always been USAA CIC - - and I will never make the mistake of 'protecting' them from having to deal with an accident that was somebody else's fault.

And I've had to type 'A!!$#%@^' 5 times ... I need to take a shower. Now.

Lee DeRaud

06-08-2022, 5:40 PM

USAA is still only officers and retirees (again, IIRC); not sure about enlisted personnel?
The CIC 'arm' covers former dependents - I know it extends to children & grandchildren, but not sure how far they will extend that relationship? (Never asked; not that old.)
Enlisted (active or with honorable discharge) yes, spouse/children yes, grandchildren no.
('CIC' is Casualty Insurance Company, BTW.)

Mike Henderson

06-08-2022, 6:19 PM

From the USAA website:

Generally, USAA membership is open to active, retired, and separated veterans with a discharge type of “Honorable” and “General Under Honorable Conditions” from the U.S. military and their eligible family members. Here is what you need to know about USAA eligibility for family members.

USAA Membership Eligibility for Family Members - USAA Community - 176724 (https://communities.usaa.com/t5/Money-Matters/USAA-Membership-Eligibility-for-Family-Members/ba-p/176724)

Mike

Malcolm McLeod

06-08-2022, 10:14 PM

Enlisted (active or with honorable discharge) yes, spouse/children yes, grandchildren no.
('CIC' is Casualty Insurance Company, BTW.)

Thanks for the clarifications.

ETA - quick search says that since my father and I have USAA policies, they will cover my children…..might have to call HQ and confirm when time arrives for them to ‘fly solo’.

Lee DeRaud

06-08-2022, 11:57 PM

Thanks for the clarifications.

ETA - quick search says that since my father and I have USAA policies, they will cover my children…..might have to call HQ and confirm when time arrives for them to ‘fly solo’.
Can't hurt to ask, but that's not how I read it. If so, the membership could be "inherited" in perpetuity, as long as no one breaks the chain.

Malcolm McLeod

06-09-2022, 10:19 AM

Can't hurt to ask, but that's not how I read it. If so, the membership could be "inherited" in perpetuity, as long as no one breaks the chain.

Call to USAA confirms that so long as I maintain my coverage thru USAA, my children are eligible as well.

Andrew Joiner

06-12-2022, 3:00 PM

Thanks for your replies.

Zachary Hoyt

06-13-2022, 11:09 AM

I was driving a 1998 Outback in December 2008 when a pickup ran a stop sign and hit the front corner, totaling the car. Because of the holidays it took about a month for his insurance company to pay out, but in the end they gave us enough to buy a 2004 Outback with about the same miles on it (~120k or so). Because we don't drive a lot and live in a rust haven it's better to have a newer car with higher mileage than an older one with lower, usually.

Milt Hardine

06-29-2022, 2:37 AM

Volvo, 2004, C70, Black with Saddle interior March 2016, 73k miles. I was forced to the right by a car coming from the left lane into my lane. In the right lane was a heavy equipment trailer made of 1/2 inch steel plate. Corner of trailer contacted right fender, wheel and door. Front right wheel, fender, and passenger door damaged. Door was peeled back 12 inches, alloy wheel was shaved about 1/4th of an inch. Insurance company totaled it. Estimate to restore was $4700. Insurance company said they would give me $6700. When I ask them how much it would be to buy it back, they said they would take $500 and write me a check for $6200. I took the car and check, found a body shop, and they made it new again for $3900. After restoration, Insurance company would not cover collision on it, saying they already paid for the car once, they won't pay for it again. Because it was not my daily driver, I did not think much about it, but concerned me if I got into a similar situation. I found a classic car insurance company that would insure it for full coverage and if the car got totaled, they would write a check for $4000. Better than nothing, so I insured with them.

Milt Hardine

06-29-2022, 2:49 AM

In Arizona, when an insurance company totals a vehicle, the title immediately goes to salvage status. Upon restoring and State inspecting proper restore, title goes to salvage/restore status. Most insurance companies will not allow collision coverage on a salvage/restore vehicle. Look for a classic car insurance company. They deal with classic car restores all the time and you will probably get a lower insurance bill than prior totaling and you get to provide what the cars value is to you. My Volvo got full coverage at $150 per 6 mo less than before total, and I got to pick a fair market value for the car.

Myk Rian

06-29-2022, 9:27 AM

With car prices so high, I'm concerned. I'm getting insurance quotes soon and may drop my collision coverage.
Thanks
I did, way back in '74 when a kid in a Vega smashed the back of my 1971 Pinto. It cost me $300 to run the car for 3 years due to the gas shortage making the car quite valuable.

Both our vehicles are 10 years old. A 2010 Taurus, and my 2010 Ranger pickup. We discussed your question with our insurance agent and decided to keep the comprehensive coverage due to the condition of both vehicles.