Total Loss Claim Question

[mlj678]

Hi everyone,

My car (about 93,000 miles) sustained some hail damage this summer, so about three months after it happened I decided to take it to my insurance company so I could file a claim. Literally on the same day, my engine started acting up, so I had the car towed home.

So, the next day I get a call from the claims adjuster. He told me that my car was a total loss due to the hail damage, and that I had two options: 1) The insurance company gives me a sum of money, and I keep the car with a salvage title, or 2) the insurance gives me a larger sum of money (42% more than what they would have given me to keep the car with a salvage title), and the insurance company takes the car off of my hands, possibly to sell it at auction.

I want to get rid of the car, because if I keep it with a salvage title I will not get as much money, and I would be stuck with the car.

Should I keep the car or get rid of it?

Thanks!

 

[SmartWorker]

I would say take the higher offer as the insurance company will understand the purchase is with caveat emptor. The risk of mechanical failure would have to be considered on a vehicle of that age and mileage.

Anyone purchasing a salvage is going to make an offer with the understanding they may need to make repairs on it.

 

[djs]

Its a bit complicated, but I would just sell the car back to the insurance company (take the higher amount).

In general, they should pay for the car as it was on the date of the total loss event, which would mean the engine was running.

but, at the same time, you should turn the car in as it was on the day of the loss, not with a busted engine....

but....

The engine was known to have 93000 miles on it, nobody expects it to be perfect anyway.

Take the check, they will send a tow truck for the car (engine running or not). Done deal.

Worse case, a non-performing engine will lower the salvage value of the car by maybe $1000, if that. Technically, they could hold you responsible for the difference in salvage value between a totalled car with a running engine and a totalled car with a engine that needs work. The difference between these is real, but minimal since you are already talking salvaged cars.

Dan

 

[hesse]

A total loss to an insurance company shouldn't be subject to gradation should it?

Meaning if it was in a roll over 15 times vs hail damage they should pay the same.

 

[djs]

Correct, a total loss is a total loss. The value of the loss doesn't change, but the value of the salvage value can.

So, in this case, the loss was calculated with a particular salvage value, let's say $2000. With a blown motor, that salvage value is now worth perhaps $1500. There is a loss here, after the calculation of the payment.

Is the insured, who was still using the car at the time, responsible for the salvage value degradation due to additional usage? Legally, very likely but I doubt they pursue it at all.

Again (because this point gets lost easily), it isn't a case of the value of the used engine it had vs a replaced engine, its the value difference of the engine it has, running vs not running. On a car that is totaled, without being repaired from the total, I can't believe this is that much of a difference. Now, if the car only had 20K miles on it, then this might be a significant difference, but probably not in this case.

Anyone who wanted to use that engine would have pulled it and rebuilt it anyway.

Dan

 

[Newby]

What kind of car is worn out at 93,000 miles? New engine? That's crazy.

Cars

 

[stevegonzales]

It's a standard total loss. If you don't want to keep the car, just ask for the bigger check. In fact, some insurance company will just offer you the bigger check unless you ask the adjuster to buy back the car. A tow truck will take the car, and dump it at an insurance auction lot. They don't even know or care if your car run or not.