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Collision Coverage Policy not being followed

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kds

Junior Member
What is the name of your state (only U.S. law)? Michigan


I was recently in a auto accident. I have standard collision coverage which states
“If you purchase standard collision insurance for the vehicle described on your renewal notice, the Company will pay collision damages to the insured vehicle, regardless of who is responsible for the accident. You must pay your selected deductible amount for each accident.”.

No where does it state in my policy book about any limits or total loss. Yet the insurance company is saying they are totaling out my vehicle because the said the vehicle amount it less then their repair amount plus what they get to salvage it. What are my right’s here? They are not following their policy as stated. Also their repair estimate is very inaccurate, it has wrong components that need fixed listed and the field adjusted misrepresented my car condition and didnt check some things she claim to have checked.

Also they are way undervaluing my car value.
 
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Country Living

Senior Member
Read the section of your contract that explains Total Loss to Your Covered Auto. The company's limit of liability is the actual cash value of the vehicle at the time and place of the accident. Actual cash value means the cost to buy a comparable vehicle (similar mileage and similar body condition) - same make, model, model year, options.
 

Country Living

Senior Member
A total loss is an emotional thing for a young person. You've worked hard to get and keep your car and then something terrible happens and it's damaged beyond the market value of the car. I understand that completely.

Let's say the value of your car right before the accident was $6,000. It would take $10,000 to repair it. Think about that for a moment. It just doesn't make good business sense for the company to spend an extra $4,000 on a $6,000 car.

Here's another way to look at it. If you go to a friend's house and break her $1,000 stereo, and the repair place she takes it to says they can fix it for $1,300, and the current value of the stereo is only $600 (technology depreciates!), which number do you want to pay?

ecmst12 should wander by shortly and she can explain more about how the value of a car is calculated. You just can't take KBB or NADA and say "that's my number". There's more to it than that.

Good luck. Hopefully you'll be able to replace the car with the settlement amount. Did you have rental reimbursement?
 
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kds

Junior Member
Cannot find any limitations

There is nothing in it about it, nothing about total loss or limiting liability. I don’t have a copy of any contract. Just this policy book that doesn’t have any limitations as described. I believe my mother called the insurance and told them that I wanted full coverage years ago and this is what I have. My parents have all the vehicles through them and their home owners insurance with them.
They did send me a comparable vehicle report and none of the vehicles have nearly all the options my car has. My car has almost every option available and they aren’t valuing even near these others they sent me. The accident happened in Indiana and the vehicles listed are from my home state of Michigan where I am still a legal resident.
 

kds

Junior Member
They valued my vehicle at about $3600 and repair at about $3250. Other vehicles with much less options and lesser condition are going for between $4500 - $6000. My car has almost every option that was available. Plus my vehicle is very low mileage for its year.

P.S. I’m not that young - 34. Purchased the vehicle new - I’m the original owner.
 
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You Are Guilty

Senior Member
Take your evidence of the value of the options, and the different location, and present them to your adjuster. They are only able to make decisions from the information they have available, so give them more information! (Just keep in mind that they are under no obligation to automatically accept your numbers).
 

Country Living

Senior Member
You need a copy of the contract. Nothing else matters except what's in the contract.

You're confusing "full coverage" with what you perceive will make you whole. You cannot get more than the market value of the car. That would be what we refer to as "betterment". "Making you whole" is the market value of your car.

You need to call the adjuster and, in a calm rational tone, ask him/her to go over how they calculated the value of the car. Listen to what is said, and then you have the opportunity to give additional information that may increase the amount paid.

Let me also give you a short lesson on full coverage. It doesn't mean anything. I really hate that term.

I'm assuming you're carrying the minimum liability for the state. Let's say the minimum is $25,000 per person and $50,000 total bodily injury and $50,000 property damage. Those coverages are for people you hurt or property you damage for which you're legally responsible.

You cause an accident. The driver is hurt and incurs $100,000 in medical and rehab expenses. All your policy is going to pay is the $25,000 per person. You're liable for the other $75,000.

All full coverage means is you're carrying at least the minimum limit under each coverage. It does not mean you're fully protected in case of an accident. That's why anyone who buys and finances a new car should be responsible enough to carry GAP insurance in case the car is totaled.

As I said earlier, ecmst12 should wander by shortly with a better explanation of how insurance companies calculate the market value of a car.

This bites - I understand that. My daughter went through this whole thing a few years ago and it took awhile for her to calm down and accept the fact that a total loss absolutely stinks (she had another word for it) and that replacing her car was going to cost her money (which it did.) She wanted to sue the kid who hit her for the difference between what the insurance company paid and what she thought was the value of the car. Once she finally accepted that was not (could not) going to happen, she got on with her life. Oh, she still grumbles every now and then. Total losses are very emotional. And costly.
 

ecmst12

Senior Member
I don't have the energy right now to contribute very much. But collision coverage pays UP TO the fair market value of your vehicle, always, all collision coverage on every single car. Liability coverage works the same way. If the cost to repair a car is greater then the value, or even up to 80% of the value, they will total it out and pay the value. 80% because once repairs start, additional damage is usually found that would take it over the value. You are not owed more then your car is worth.

And unless your car has been garage kept and detailed once a week, cars at dealerships are worth a little more, because they have been cleaned and buffed and prepared for sale. Also what they are advertising as the price isn't necessarily what they are selling for, and value reports go by sales not ads.
 

kds

Junior Member
Ok I contacted the insurance agency about getting a copy of a contract. They don’t have no such contract. And the policy that they faxed me is a simple break down as in my policy book they gave me. That’s it. No limitations are declared what so ever. They didn’t tell us any limitations or anything when we got the insurance.
 

ecmst12

Senior Member
No insurance company EVER has to pay more to repair a vehicle then it's worth. That's regardless of whether it's a collision claim or a 3rd party liability claim, that's basic tort law. Insurance is obligated to make the claimant WHOLE, not better then whole. In the case of a collision claim, they're obligated to make you whole less your deductible. That means they pay the cost to repair, OR the fair market value of the vehicle, WHICHEVER IS LESS, then subtract whatever your deductible is.

If you like, you can buy your wrecked car back from the insurance company for the salvage value, then pay to fix it yourself. But this almost never makes financial sense, since the repairs will likely end up being more then you got from the insurance company, plus the car will then have a salvage title, which will cut the value in half at least. Makes much more sense to accept the money from the insurance company, pay off the loan (if there is one), and use the remainder to replace the vehicle.

If you don't believe your car was described correctly in the valuation report (missing options etc) then you can ask them to fix it. It might make a couple hundred difference, but most likely won't make so much difference as to not total it out. Most people think their cars are worth much more then they really are.
 

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