Need Help from P&C Folks on an Accident

[sman]

My daughter's car was rear-ended and it didn't appear to be that much damage. Bumper knocked off, back of car pushed in some and overall seemed like a quick fix. Initial estimate by adjuster was $3,800. Now that it's at the body shop, they are sending another adjuster to look at it because the floor pan is damaged as well and there is talk of it being a total loss. To buy the car today would be about $7,000 (prior to tax, tag and title). So my questions are as follows:

1 - Do I have to accept this being a total loss since the estimate is now somewhere in the $5,800 range? I'd prefer to get the car fixed because it's in great shape mechanically and other than this damage is in great shape cosmetically.

2 - If I must accept it as a total loss, any advice on making sure I get a fair offer from the insurance company? Do I include tax, tag and title in the amount if they do total it since I'd have to pay those amounts again to purchase another car?

My son was hit by a wrong way driver last year and his car was totaled and the other insurance company was Progressive. They were HORRIBLE to deal with. Had to fight for everything and still feel like we got the short end of the stick. The carrier we're dealing with now is Safeco and they have been good thus far, but I'm just leery since the experience last year.

3 - One last thing, I haven't reported this to my insurance company since my daughter wasn't at fault. Should I? I guess the real question is am I required to and will it cause my rates to increase even though she wasn't at fault?

Thanks to all the P&C experts here.

 

[Josh]

1- You do not need to report this to your insurance company. Because your daughter was not at fault it shouldn't affect your rates even if you do, but it only opens the door for confusion.
2- The majority of the time (if not all the time) the insurance companies will base the total loss off of what similar cars in the area are selling for plus tax and tags. There might be some state variation on tax and tags, but they are going to usually even be able to give you a list of comparable vehicles and their prices so you could literally take the money and go buy one that is nearly the same.
3- Again, I think this is going to vary by state, but typically once it hits 75% of the value of the vehicle in repairs it's a total loss and they will opt to pay it out as a total loss vs repair. On that same point, I got t-boned years ago and it should have been a simple enough fix, but to this day I have problems with the door and trunk closing right depending on the temperature. If you're car's frame has been messed with (floor pans needing work is not a good sign), they might be doing you a favor if they call it a total loss and you find another one in similar condition.

I'm sure Dan will be along shortly to shed some more light on this as well.

 

[djs]

Josh pretty much nailed it. I guess I have taught him well

In todays world, bumpers falling off is NEVER a good sign. What costs $20 to replace when I was a kid (when a bumper was designed to be 'bumped') is now easily $3000 due to the sensors, impact zones, painting, labor, etc.

My question is, did the airbags go off? If so, from what you are describing, this will end up as a total loss. I could be wrong, but airbags are a decent indicator of the amount of damage that you don't see. Floor pans are a bad sign unless you ran over something.

Usually an insurance company hires a 3rd party to do the valuation of the car. They compare it to other cars in your area (no, they don't use NADA or KBB or whatever) and try to come up with a reasonable valuation and then make adjustments for the condition of your car compared to the other cars sold, if known.

After this, they add in taxes, title, registration, document fees, whatever you normally pay to buy a car in your area.

You can always take the check and keep the car. They deduct salvage value out of the check they give you. If you have someone who can do the work, its sometimes a viable option. The car will have a salvage title at that point though.

Dan

 

[sman]

Thanks for the info guys. Just waiting for the field adjuster to go take another look at the vehicle and give the final verdict.

No airbags deployed on either vehicle. That's what amazes me is the fact that the other vehicle rear-ended my daughter's vehicle and the at fault driver's airbags didn't deploy. If she hit my daughter with enough force to total the vehicle I would think her airbag would have gone off.

Once I speak with the adjuster and the body shop, I may see if the salvage option is something worthwhile. It really is a good vehicle for my daughter and I hate to have to go shopping for a new car. But I certainly don't want to have "issues" with the car if I were to go that route.

 

[Josh]

Airbags are typically set off by a sensor in the front bumper, so a lot of times you could get rear-ended pretty hard without it tripping anything. On the flip side, you can go to change your headlight (slight exaggeration) and hit the bumper funny and have them go off. It really has more to do with that one sensor going off from being bumped (even at very low speeds >5mph) vs speed.

 

[sman]

Airbags are typically set off by a sensor in the front bumper, so a lot of times you could get rear-ended pretty hard without it tripping anything. On the flip side, you can go to change your headlight (slight exaggeration) and hit the bumper funny and have them go off. It really has more to do with that one sensor going off from being bumped (even at very low speeds >5mph) vs speed.

I understand why my daughter's airbag didn't go off. What I don't understand is how the airbag of the person who hit her didn't deploy. It was pretty much a straight on hit (her front to my daughter's back).

 

[sman]

So now the offer stage begins. Safeco had been great to deal with up until this point. The first offer was VERY low. As soon as she said it I said no. She explained how they get to that figure and I explained that there is no way I can buy the same vehicle for that price. After emailing her some comps of cars in the area they raised the offer 27%. Better, but still not good enough.

So today I emailed them copies of receipts for items that have been repaired on the vehicle in the last 20,000 miles. I will wait and see what the new offer is.

Man I hate dealing with adjusters.

 

[djs]

The dollar value of repairs is not a determining factor on the value of the car. It might get you a little bit, but not near as much as people ever want.

Look at it this way. Think about buying a car.
You are looking at 3 cars, identical make and model.
One has a broken transmission. They want $8500
One is in good shape. They want $9000
One just had a new transmission put in for $4000. They want $15000.

Which would you buy?

When people have cars totalled, this is how they look at things. They don't want to deduct for problems, but they do want to add for repairs. When you buy a car though, you expect it to just work.

If you are in line with the comps, the only thing you are dealing with is betterments on the condition of things. Thats a good thing, just don't expect every dollar of repair work to be reimbursed, or even close. The assumption in the settlement is that it worked in the first place.


Dan

 

[sman]

The dollar value of repairs is not a determining factor on the value of the car. It might get you a little bit, but not near as much as people ever want.

Look at it this way. Think about buying a car.
You are looking at 3 cars, identical make and model.
One has a broken transmission. They want $8500
One is in good shape. They want $9000
One just had a new transmission put in for $4000. They want $15000.

Which would you buy?

When people have cars totalled, this is how they look at things. They don't want to deduct for problems, but they do want to add for repairs. When you buy a car though, you expect it to just work.

If you are in line with the comps, the only thing you are dealing with is betterments on the condition of things. Thats a good thing, just don't expect every dollar of repair work to be reimbursed, or even close. The assumption in the settlement is that it worked in the first place.


Dan

I completely understand that, but I'll take every penny I can get. Surely you aren't suggesting me not to send them the receipts? If I can get 10%-20% of what has been spent on it in the last year added to the offer I will be happy. Their initial offer was $2,100 less than a comparable vehicle currently for sale. Now they are $700 away from the price of the comparable vehicle.

I think it's only fair that they restore me to the position I was in before their insured hit my car. As it stands right now, I can't buy the same vehicle for what they are offering to give me.

 

[AutoInsuranceExperts]

Again, good comments. I do enjoy this forum!

My 2 cents from a former claims manager's perspective:
I am going to assume you have collision coverage on your policy. If not, my apologies!

In these scenarios, where your car is a total loss and it appears there is going to be issues with a value as soon as the negotiations begin, is why I suggest going through your own company. The claimant carrier does owe you to either return your vehicle to its pre-accident condition or replace it. However, they don't have a contractual obligation to you like your insurance company does.

Some carriers will make you an offer (as the claimant carrier or company for the other driver) and if you don't like it they will suggest you go through your own company. Now, if there are injuries, they will likely not take such a hard stance...

In addition, if they have you or your daughter in a rental car, they will likely cut that rental off within a few days of making you an offer.

Also, as rough as it sounds, I do agree with Dan in terms of the repairs. It is assumed that repairs & maintenance are done on your vehicle to keep it in good working condition. Things wear out... Basic repairs due to normal wear & tear won't really help much. The real advantage comes if your car is in very, very good condition as the valuation will have a condition rating (poor, good, dealer, etc...) and this can add significantly to the value.