When an insurance company totals a car for economic reasons

[JustAPal00]

The insurance company has the good fortune in being able to total it and claim loss of salvage income. It seemed to us that they *were* deducting the salvage income from the settlement, because they subtracted it from the baseline value.

Am I wrong in assuming that if no insurance companies were involved, that we would not even be discussing loss of salvage income? If the other driver had no insurance, and we had no "uninsured motorist", wouldn't we be able to sue the other driver in small claims court for the fair market value of the truck, then that would be that?

I don't think you understand how it works. When your car is totaled, the insurance company is saying that it will be more cost effective to buy you another one than to fix your damaged one. So they take your old car and give you enough money to go out in your area and find a similar car. Since you can't find the same car (no two used cars are exactly alike), you may have to pay more to get a nicer car, or save a little and buy a worse car. Now the insurance company owns your old car, and you bought a new one. In your case, you want to buy your old car back, and they are willing to sell it to you for $458. It doesn't matter if the other guy has insurance or not (for the sake of how the numbers work). If you sue him for $5000 in damages to your vehicle, and he can prove that the average price in your area for a similar vehicle is $3500, you will get $3500 and he will get your car. Then if you want to buy it back, he might sell it to you to recoup some of what he just paid you!

 

[ecmst12]

Small claims court is easy and inexpensive. In my experience, the insurance companies hate it when you sue their insured in small claims court. The insurance company can not come in and defend their insured, the negligent driver. No attorneys are allowed in small claims court.

That depends on your state. The states I work with DO allow attorneys in SCC and we will send one if our insured gets sued.

Even with no attorneys, all the other driver has to do is produce a copy of the paperwork from the insurance company showing the value of your car and the salvage value, and your case is lost.

 

[moburkes]

Yep, some states allow attorneys in small claims court. I was sued, as an insurance agent, for about $100 or so, over the customer's bill from the rental care agency, when he kept it longer than what his policy would pay for. An attorney from the company I represented, drove 2 hours each way to defended me. The plaintiff was off his rocker, literally. His case was dismissed within a few minutes.

But, yes, you STILL have the burden to prove that your vehicle is worth more than you say. And, yes, vehicles are totalled because of economic decisions all the time.

 

[curious100]

That depends on your state. The states I work with DO allow attorneys in SCC and we will send one if our insured gets sued.

Even with no attorneys, all the other driver has to do is produce a copy of the paperwork from the insurance company showing the value of your car and the salvage value, and your case is lost.

I'm in California, and attorneys are not allowed in small claims court.

...and my case is lost? So you're saying a judge won't even look at any data or proof I have and consider it? Sounds like you work for an insurance company.

 

[JustAPal00]

I'm in California, and attorneys are not allowed in small claims court.

...and my case is lost? So you're saying a judge won't even look at any data or proof I have and consider it? Sounds like you work for an insurance company.

NO! What she's saying is that when you go to small claims court against the other driver, all he has to do is show the judge the paperwork showing the ACV of your vehicle and what the insurance company is offering and that should be enough. The burden of proof is on you. He will look at your case but you will be fighting an uphill battle. I'm guessing that the discrepancy between your two values is coming from condition. They are probably giving you the “average condition” value, and you are probably focusing on the “excellent condition” value. Most people who have had a vehicle along time tend to get a little emotionally attached to their vehicle and look at it through rose colored glasses!

 

[curious100]

NO! What she's saying is that when you go to small claims court against the other driver, all he has to do is show the judge the paperwork showing the ACV of your vehicle and what the insurance company is offering and that should be enough. The burden of proof is on you. He will look at your case but you will be fighting an uphill battle. I'm guessing that the discrepancy between your two values is coming from condition. They are probably giving you the _average condition_ value, and you are probably focusing on the _excellent condition_ value. Most people who have had a vehicle along time tend to get a little emotionally attached to their vehicle and look at it through rose colored glasses!

Yes, I realize the burden is on me. I don't believe the discrepancy between us has to do with condition, as the software they're using for their estimate has a boilerplate paragraph saying condition is not considered in this ACV figure. So, I will ask them to provide the report showing how they came up with their ACV figure.

The reason we feel their estimate is too low is for a number of reasons. We've gone online to Kelly Blue Book, Edmunds.com, NADA, and Ebay finding four final sales. Also, we have a few classified ads from two different newspapers. Every single one shows higher value. And, I'm using average condition for my figuring, just to be safe. (I woudn't dream of saying it was in excellent condition.) When the adjustor looked at our truck, he said he thought it was in very good condition, even though his estimate says it doesn't consider condition.

Look, I'm in no way trying to rip the insurance company, or anyone, off. I'm not emotionally attached to this truck--I just want the fair amount. But, I also know the insurance company is going to try to keep the figure as low as they can. We realize we will have to buy our truck back for the salvage amount, but that has nothing to do with the ACV we believe our truck is worth. I will have to pay that $458 amount no matter what the ACV is determined to be.

Thanks again to everyone for your advice.

 

[moburkes]

Sure, insurance companies want to keep payouts low, HOWEVER, they are not in the business of lowballing. They wouldn't keep many customers if they offered their customers consistently low payouts.

Insurance companies don't use KBB or Edmunds or ebay.

 

[curious100]

Sure, insurance companies want to keep payouts low, HOWEVER, they are not in the business of lowballing. They wouldn't keep many customers if they offered their customers consistently low payouts.

Insurance companies don't use KBB or Edmunds or ebay.

OK, but that doesn't make KBB or Edmunds any less valid. And, the best evidence of what something is worth is whatever someone is willing to pay for it. Next time you try to refinance your house, pay attention to how appraisers focus on all the closed sales of similar homes in your area when determining the value of your home.

I'm not bashing insurance companies. I know they're in the business of making a profit, and I also know there are a lot of scam artists out there. But, they're not above making mistakes. Just taking the attitude that they are 100% correct, though, is wrong IMHO. We will have to agree to disagree on that point.

Thanks to everyone for the time they've taken to answer me. I will post an update when this is all said and done to let everyone know how it turned out.

 

[ecmst12]

ADS do not prove value. SALES prove value. Just because someone is asking a certain price for their vehicle doesn't mean it sells for that much. The reports that insurance companies use track actual sales in your area, not advertisements.

 

[moburkes]

KBB doesn't tell you what someone has paid, or will pay, for a vehicle.

I've bought a house, thanks. And, know that, you may have received an appraisal for a house 2 years ago, that is no longer valid, because the market has gone down. Apples to oranges.

I never said that insurance companies were 100% correct. Since they are run by people, and people make mistakes, that would be a stupid thing to assert.

 

[curious100]

ADS do not prove value. SALES prove value. Just because someone is asking a certain price for their vehicle doesn't mean it sells for that much. The reports that insurance companies use track actual sales in your area, not advertisements.

I know ads do not prove final sales, but its something to use in addition to the other info. However, FINAL SALES on Ebay prove value. And, I have the pictures to go along with each final sales figure.

 

[moburkes]

I know ads do not prove final sales, but its something to use in addition to the other info. However, FINAL SALES on Ebay prove value. And, I have the pictures to go along with each final sales figure.

And these ebay sales were in your local area?

 

[curious100]

KBB doesn't tell you what someone has paid, or will pay, for a vehicle.

I've bought a house, thanks. And, know that, you may have received an appraisal for a house 2 years ago, that is no longer valid, because the market has gone down. Apples to oranges.

I never said that insurance companies were 100% correct. Since they are run by people, and people make mistakes, that would be a stupid thing to assert.

Don't know what the 2 years ago comment means. Lenders will only consider an appraisal valid for up to four months, so why would anyone try to use one from 2 years ago?

Anyway, the point I was trying to make is that the best way to determine the value OF ANYTHING is by what others have recently paid for the same, or similar, thing. Appraisals are appraisals.

No, you didn't say that insurance companies are 100% correct. However, every time you answer, (and ecmst12, too) your answers have been very pro insurance companies. I mean, you haven't even once acknowledged that, perhaps, they DID offer a low figure and suggest any method that I may be successful in defending my position. Maybe that's because you both work(ed) for insurance companies. And, I mean that respectfully.

Thank you again.

 

[moburkes]

My only point was that you are comparing apples to oranges. And, yes, I've worked for insurance companies, and have NEVER had an unhappy customer in a claims situation. I, do not, however, currently work for an insurance company.

Based on the age of your vehicle, you have an 89 degree angle, uphill battle to climb. If any of us thought you would prevail, you would have been told that.

 

[curious100]

And these ebay sales were in your local area?

One is from Southern California, which is where we live. The others are in Northern California, Nevada and Arizona. Both of the California sales are for the exact same truck--year and model. The other two are for 1991's--two years older than ours. All of them sold for more than the insurance company has offered.