Getting Screwed with State Farm After Harvey

[laziebug73]

My husband and I have full coverage with State Farm. Our cars are being used as collateral with our credit Union. We have a $6,400 payoff on the loan. Both our cars received the minimal damage during the storm Harvey. They were parked in our driveway and got water on the floorboards nothing major just a little bit but enough to get carpet wet. I filed a claim with State Farm. My husband and I wanted to know what it would be to get the carpet replaced. Now State Farm wants to write off our cars as total loss. The guy told me it would be considered a level 2 with brackish water. There is no brackish water I don't know how he gets that. They don't send their inspector to my house they want me to take pictures of everything in my car and upload it to their claims which I did. My car is a 2005 the value is about 3500 they want to give me 2700 thats with the minus deductible. They hadn't told me about my husbands but he has an older car 2001 and I know they wont give him crap for his. They wanted to come get my car today telling me to hand over the title to them and keys. I told them that is not enough money to pay all the loan with my bank and I don't want to be stuck with another car note. I'm happy our cars are driveable and I tore out the backseat carpet in my where that was the only damage area. Now they're saying later on down the road there could be potential electrical hazards such as my car catching on fire, airbags deploying, getting stranded somewhere. They said they sent it to the state and now I will not be able to register my vehicle or get another insurance carrier. Has anyone had this problem with their car getting water and the insurance company wanting to total it saying that they send it to the state with a bad title? I mean a little bit of water. My husband thinks we should have it looked at by a mechanic. One state farm person said the repairs would probably outweigh what they want to give me for my car. I'm better off totaling it? I don't know. Right now I'm unemployed and I cannot afford another car with a new payment. Then I have the loan with credit union to pay off. I was able to cancel my husbands claim. I said he was looking at selling it to a friend. Later on I called state farm and told them that is what I'm going to do to just so they will leave me alone. They are in a big hurry to close out this claim. I said I'm selling it to a friend and he will use it for scrap. That finally got them off my back but the man still gave me a hard time saying it's going to cause you problems and you cant drive with with it being a loss and you can't sell the car being a loss. I'm in tears. I wish I didn't set up these claims but how was I suppose to know how they were going to treat this. Maybe they are right but I'm not ready to let go of our cars. Tomorrow I'm dropping state farm and going with someone else.

 

[chaseman]

I am sorry that you are having to deal with this stress. The hardest part about what you said is the fact that you still owe money on the vehicle. If you didn't have payments on it, it would still be stressful as any situation that causes a claim can be. The anxiety would just be less if you had no payments to make. If I were in your shoes, I would NOT immediately switch to another carrier. It doesn't sound like they necessarily "screwed" you. First of all, you now have a recent claim on your CLUE report. If you try to switch and a new carrier gives you a quote, it will be a higher premium due to the recent claim. Another thing that could happen is, they may not be able to offer you insurance at all, you would be declined. Think about it. If you owned an insurance company, would you want to insure a vehicle that has had some flooding in it? Technically, when the agent does the application for you, with every carrier there is a question somewhere on the application that asks if there is any prior un-repaired damage to the vehicle. If the agent answers "No" (because you didn't disclose it), or if you disclose it and the agent answers no to this question, you have just provided false information on the application that you sign with your signature. This is called insurance fraud. Now, in some cases you may be able to buy back the vehicle from the insurance company, but the vehicle now has a Salvaged Title. Very few insurance companies will insure a vehicle with a salvaged title, but some do. The rates are typically higher though, and some of the companies that do accept it are not preferred carriers. Dairyland is one that comes to mind. They are non-preferred, so you would be in a risk pool with other people who have salvaged titles, DUI's, reckless driving records, etc. I'm not a huge State Farm person at all, but they are a preferred carrier. I would stay with them and stick it out until the claim falls off at least (typically 3 years with some carriers, and 5 years with others). It's never a good idea to make a financial decision because you are upset or emotional about a situation. With some products, that is okay, but not with something as important as insurance. Those are my two cents but others may have a different opinion.

 

[VolAgent]

I am very sorry for your financial situation.

However, by the sounds of it, State Farm is trying to do right by you. With flood water in the car, that is a potential for serious damage. Whether it was brackish or not really doesn't matter, either way it can cause damage to any electrical component or wiring it reaches. There is a real risk of an electrical short for anything electrical that was underwater.

And I suspect the adjuster is quite right, the cost to repair your vehicles more than exceeds their value at this point. It sounds like you feel your vehicle is worth 3500 and you have been offered 2700 after accounting for your deductible? Assuming your deductible is 500, then they aren't far off. If it is smaller than obviously the difference is larger. State Farm will give you tax, title and registration fees on top of the value of your vehicle. You need to see the exact value State Farm has placed upon your vehicle, if it is less than what you believe, then you need to be able to document the value you have found. Kelly Blue Book, dealer transactions, etc. State Farm will probably adjust their value if you can produce evidence they have under valued your car. I had the exact opposite situation with them recently when one of their insureds hit me. They offered me more than what I thought my vehicle was worth so I gladly took it.

And yes, State Farm is correct. You are going to have a hard time titling or selling the car at this point. If they have reported it to the state, then everyone is aware of what happened, or can easily find out. Also, you will find it very difficult to find insurance, even just liability only. Until it is repaired, no one will knowingly give you "full coverage", and if you lie about your vehicle's condition then you open yourself up to insurance fraud.

Finally, the reason they want the title and keys is that once the vehicle is totaled and you have been given a check, they own the vehicle. They are going to send it to a scrap yard to ensure it does not end up back on the market as a flood vehicle, at least I hope they do.

Again I am sorry to hear of your financial situation. I have a friend in Houston who is waiting to see if he still has a job, I know it can be rough. State Farm really is trying to do right by you and I hope you can make things work out. Whatever you do, do not lie to State Farm, that will only make your situation worse.

 

[laziebug73]

I greatly appreciate both of your advise. I have decided to stay with state farm for now. I understand I don't want a salvage title and I sure down want to be upside down on a loan. My dad kept saying get legal advise and fight it. I have a hard time believing there is something wrong with the vehicle. I can't see how they say it was "brackish" water because it wasn't. How come if your house floods say 1" water flood insurance company doesn't say we are going to condemn your house turn in your keys get out. This is crazy. You guys have shed light on my situation. Thank you.

 

[VolAgent]

I greatly appreciate both of your advise. I have decided to stay with state farm for now. I understand I don't want a salvage title and I sure down want to be upside down on a loan. My dad kept saying get legal advise and fight it. I have a hard time believing there is something wrong with the vehicle. I can't see how they say it was "brackish" water because it wasn't. How come if your house floods say 1" water flood insurance company doesn't say we are going to condemn your house turn in your keys get out. This is crazy. You guys have shed light on my situation. Thank you.

Simple, because even if it was a foot, as long as you get in the home and dry it out quickly enough, the cost to repair generally does not exceed the value of the home or the cost to rebuild.

A car is a depreciating asset. In general, cars loss value constantly (specialty cars, collectibles, and such excluded). In general, a home will maintain its value or even grow in value as long as it is maintained. Yet the cost to repair a car does not go down, so every vehicle hits a point where it would cost more to repair than it is worth. And then yes, it is turn in the keys and here is a check.

And for the record, homes can be a complete loss as well. It just takes more damage as they are worth more. Whether an extensive fire, windstorm or tornado, flood or other cause.

Also, do not be surprised if State Farm does not renew your policy. I seriously doubt they will continue to insure these vehicles past policy renewal. As far as they are concerned, they are total losses. Additionally, if they are otherwise damaged, I doubt there will be any coverage as they have already been totaled out. Finally, since you told State Farm you were going to sell the vehicles, are they still on the policy? Is there any coverage at all?

These are questions I can't answer for you, but I doubt this will play out the way you think it will at this point.

 

[Chazm]

You are not being screwed.

Even that little amount of water damage can cause issues in the future, near or long term.

As far as the $3500 valuation goes, where did you come up with that number? KBB excellent condition? Edmunds? Normal condition?

Like someone mentioned, if you can show their valuation is off you may be able to get more.