Need Advice on Car Wreck

[radelow]

Hi everyone. I have a 2005 X5 that was t-boned by a 17 year old driving his mom's minivan. He is insured by AAA here in California. He has accepted fault (there were four witness). I just received the cost estimate from the body shop and it came out to $12,000. This included replacing the entire right rear suspension, right rear door, right rear quarter panel, rim, tire, etc. I am none to happy and ideally would like the car totalled. The value of the car is probably on the order of $23,000 so from first glance it does not appear to qualify for being totalled.

With all this said I would like to still ask for the car to be totalled based on the following. Repairs never end up costing what the original estimate is. Assuming it ends up costing 15% more that means $14,000. On top of that they are renting me an "equivalent type" vehicle with is a SUV. That is costing them $100 a day (I verified with Hertz). The repair will take at least 45 days so that is another $4500. For a total of $18,500. On top of that I am going to go after diminished value (I know it is difficult to get this). But regardless if I use the $18,500 number. The alternative is to write me a check for $23,000 and sell the X5 for say $8000 salvage (they probably could get more). That would net them $15,000 in cost versus $18,500. Seems like it makes economic sense to me...Do I have any chance of making this arguement with them???

 

[Josh]

How a loss is paid can vary state to state, but in general here's what you're up against. In order for a car to be totaled cost of the damages has to exceed 75% of the retail value of the car with taxes. So if the car retailed out for $25k and with taxes it'd be another $2k, you're looking at $27k. The cost of the rental car is a non-issue, either the car is totaled or it's not. The insurance company can't simply claim it was totaled in order to save a few bucks if the vehicle in fact was not totaled.

You also need to have an adjuster take a look at it (if they haven't already). The adjuster will decide what the damages are and that's the number they'll go off. They'll probably suggest that you use on of their shops (which is likely to be 50%-70% of the cost of a dealer) and depending on the way the policy reads they also may only pay for used parts as opposed to new (not sure what the dealer quoted you).

The bottom line is that the adjuster will be the one making the call as to whether the car is totaled or not and that will not take into consideration the cost of the rental which is a separate matter altogether. Odds of you winning this argument I would put at slim to none.

 

[radelow]

How a loss is paid can vary state to state, but in general here's what you're up against. In order for a car to be totaled cost of the damages has to exceed 75% of the retail value of the car with taxes. So if the car retailed out for $25k and with taxes it'd be another $2k, you're looking at $27k. The cost of the rental car is a non-issue, either the car is totaled or it's not. The insurance company can't simply claim it was totaled in order to save a few bucks if the vehicle in fact was not totaled.

You also need to have an adjuster take a look at it (if they haven't already). The adjuster will decide what the damages are and that's the number they'll go off. They'll probably suggest that you use on of their shops (which is likely to be 50%-70% of the cost of a dealer) and depending on the way the policy reads they also may only pay for used parts as opposed to new (not sure what the dealer quoted you).

The bottom line is that the adjuster will be the one making the call as to whether the car is totaled or not and that will not take into consideration the cost of the rental which is a separate matter altogether. Odds of you winning this argument I would put at slim to none.

I was unaware of "rules" regarding paying out on a loss. My insurance company told me that they either pay out if the cost of repairs is more than the value of the car OR if the cost of the repairs PLUS the value of the car as salvage exceeds the value of the car prior to the accident. That doesn't sound like it is dictated to them.

How does what the policy reads have anything to do with the repairs on the car and what parts are used? It isn't my policy. The insurance company paying to fix the car is the other person's. I am not a party to that policy.

 

[Josh]

I was unaware of "rules" regarding paying out on a loss. My insurance company told me that they either pay out if the cost of repairs is more than the value of the car OR if the cost of the repairs PLUS the value of the car as salvage exceeds the value of the car prior to the accident. That doesn't sound like it is dictated to them.

How does what the policy reads have anything to do with the repairs on the car and what parts are used? It isn't my policy. The insurance company paying to fix the car is the other person's. I am not a party to that policy.

Again, the adjuster will be the one making the calls on this, but to give you as best an answer as I can to your questions:

Unless your company is the same insurance company that the liable party has, the rules will vary slightly. That being said, the determination as to whether the vehicle is totaled or not is going to be determined based off of the actual damage to the car, irrespective of the rental claim.

Second, it's the insurance policy that is paying out which is the one that matters. So even though it's not your insurance per se, if they are the ones paying to have your car fixed then that is in effect your insurance. Some policies will only pay for used body parts on a used car, so they might want to use a fender off a low mileage x5 rather than buying a new one, which would save them some coin. If you'd like to fight that one with them you're more than welcome to, odds are they'll win considering that the body panels they'd be using are as good or better than what you had originally. They might go ahead and pay for brand new ones, but it's common for them to not. If you got an estimate from the dealer for $12k, odds are the carrier is only on the hook for around $9k or less and the dealer will eat the difference.

Again, there are a ton of moving parts on this, but that's the gist of what you're looking at. The one key point in answering your initial question is that it's extremely unlikely they'll take the cost of the rental car into consideration when determining what they'll pay for the damage to the car and your odds of winning that battle are about the same as us leaving Iraq next month.

 

[djs]

Good luck with this.

Why is the repair going to take 45 days? This is beyond (way beyond) any normal repair time.

It's highly doubtful the insurance company is paying $100 a day for your rental car. That sounds like what you would pay, but insurance companies have negotiated some pretty decent contracts. They are probably paying closer to $50. Of course, they are on the hook for this anyway, even if it is a total, so this doesn't matter at all. It will not be added to the cost of the damage.

Estimates are usually pretty close nowadays. Yes, sometimes further damage exists once the car is taken apart, but not as often as you think, definitely, not where I would say 'usually'.

Salvage value is nowhere near $8000. I'm assuming you made that number up to make your numbers sound good. Salvage value is probably $2-3000. If the insurance company sold it at salvage, somebody would buy it, fix it, and then sell it for $8-12K as a salvage title. Not the same thing.

In short, you can push for the car to be totalled, but from your description, you won't get very far. Not near enough damage to justify it.

-----

Here's the real problem. You need to find out what limits the driver had for property damage on his insurance. Many drivers only have $5K or $10K in coverage, which can come up short in this situation. If that happens, it will then roll to your insurance to cover the balance.

Dan

 

[AdjusterMan]

Odds of you winning this argument I would put at slim to none.

I put it at NONE.

Yes, the adjuster will make the call.

The salvage potential of the car vs repairs argument will only come up if the car falls outside of local state "branding laws"

For instance, in Wisconsin:
1. Vehicle within 7 years of current model year is totaled when repairs exceed 70% of ACV
2. Vehicle outside of 7 years is totaled when the ACV - salvage potential exceeds repairs

Some states (Montana or Wyoming, I forget) have NO branding limits and can consider repairs up to the ACV

 

[markschneider86]

Keep in mind that it is cheaper for an insurance company to total a car(most of the time) then fix it. So there is a reason why they are fixing it. Sounds like, and looks like there is a big enough gap between, the totaled actual cash value of the car, versus what it will take to fix it. This really does come down adjusters call though. But if there is a big enough difference, they will fix it and no more. According to the Indemnity law, there is no loss or no gain on a loss(e) covered by the insurance company.

So the settlement will be no more then they have to pay.

 

[jlove]

One thing that you could possibly do is to get the estimate from the adjuster then get some local salvage buyers to go and look at what the vehicle would be worth "as is". The adjuster may give you some suggestions as they normally deal with certain salvage yards that give them really good quotes. The salvage yards are more likely to give a higher bid to get a vehicle with a clean title vs. a salvage title. Both checks could be close to the value of the car. You could also ask them to pay an amount for anticipated rental as they would owe you a rental if they repaired it to help with any gaps. Hope this helps.

 

[hojord]

I am not quite sure if you can make the argument with them but nevertheless I think you should definitely try it. It is hard to say if the car qualifies to be totalled but as I said I would at least try it. I actually did a research about car insurances and I have found out that German auto insurances would at least pay in your case so maybe you are lucky and will be qualified.

 

[Josh]

I am not quite sure if you can make the argument with them but nevertheless I think you should definitely try it. It is hard to say if the car qualifies to be totalled but as I said I would at least try it. I actually did a research about car insurances and I have found out that German auto insurances would at least pay in your case so maybe you are lucky and will be qualified.

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