by Guest » Fri May 11, 2012 02:13 am
Back in September my mother was parked on the side of the road near our home. It's off a two lane road and there was more than enough dirt that she was parked on the side of the road, parked, car off.
She was on the phone, and a man strayed off the road going about 50mph and ran into her.
Car was totaled (bent frame). Her car was valued at near 12,000 at the time.
She had a joint loan with her boat and car with the bank. The bank ended up only giving her 3000, instead of the full 12000. So she went from having a nice car, to having to buy a 12 year old car.
On top of that, her medical bills are roughly 17000, no lost wages, rental car paid, and the car being totaled but bank gave her 3000.
She partially tore her rotator cuff in her shoulder and partially tore her bicep and her back came out of alignment. She was required to visit a chiropractor for 7 months.
The first 3 months, she would visit 3 times a week. The second 3, 2x a week. And the last month, was once a week.
Also factor in, that my mother lives 50 miles from the closest chiropractor. Which would not what she would have to pay in gas come into some kind of factor for every visit ?
And, then, while her lawyer is currently dealing with the other guys insurance, we were just wondering what the possible claim could be worth?
Other smaller factors, my father passed just 6 months before the accident, mother is going through bankruptcy as well. (Emotional factors)
Thanks for any input.
She was on the phone, and a man strayed off the road going about 50mph and ran into her.
Car was totaled (bent frame). Her car was valued at near 12,000 at the time.
She had a joint loan with her boat and car with the bank. The bank ended up only giving her 3000, instead of the full 12000. So she went from having a nice car, to having to buy a 12 year old car.
On top of that, her medical bills are roughly 17000, no lost wages, rental car paid, and the car being totaled but bank gave her 3000.
She partially tore her rotator cuff in her shoulder and partially tore her bicep and her back came out of alignment. She was required to visit a chiropractor for 7 months.
The first 3 months, she would visit 3 times a week. The second 3, 2x a week. And the last month, was once a week.
Also factor in, that my mother lives 50 miles from the closest chiropractor. Which would not what she would have to pay in gas come into some kind of factor for every visit ?
And, then, while her lawyer is currently dealing with the other guys insurance, we were just wondering what the possible claim could be worth?
Other smaller factors, my father passed just 6 months before the accident, mother is going through bankruptcy as well. (Emotional factors)
Thanks for any input.
Posted: Fri May 11, 2012 02:16 am Post Subject:
And, she still has to see the chiropractor once a month for the next two years.
Posted: Fri May 11, 2012 04:38 am Post Subject:
And, then, while her lawyer is currently dealing with the other guys insurance, we were just wondering what the possible claim could be worth?
Someone needs to ask the attorney (who you are going to be paying 33% of what is collected) this question. I'm guessing your mother hired this attorney for his good looks? Or perhaps because your mother was under the impression that he was the best person to know what her claim was worth.
Posted: Fri May 11, 2012 09:06 pm Post Subject:
The attorney is also the same attorney handling the bankruptcy. He wont say what the claim is worth or what he thinks its worth.
Posted: Sat May 12, 2012 12:10 am Post Subject:
The attorney is also the same attorney handling the bankruptcy. He wont say what the claim is worth or what he thinks its worth.
Time to get another attorney with a brain and a mouth.
The bank ended up only giving her 3000,
This makes no sense. Did you mean "the insurance company"? (You make this same statement twice.)
Posted: Sat May 12, 2012 08:09 pm Post Subject:
No the bank, not the insurance company.
Because my mother still owed on the car, the insurance would not pay her the value of the car, they paid the bank first.
And since she combined her loan a few years ago with her car and boat. She owed more on the loan, than what was paid out from the insurance company.
In theory the bank could of kept it all and my mother would of been without a car.
Posted: Sun May 13, 2012 07:14 am Post Subject:
Because my mother still owed on the car, the insurance would not pay her the value of the car, they paid the bank first.
And did your mother think the insurance was for the purpose of buying her a new car? That's not how it works.
How could your mother have financed a car and a boat in the same loan unless she refinanced all of her debt into a new loan?
Now here's my question: The insurance company pays the bank $xxx, The bank then pays your mother $3,000. What exactly is the problam? If the insurance company paid the bank $15,000 and your mother owed the bank $12,000 for the car and boat, she in entitled to a $3000 refund, which is what she received.
What else do you believe your mother is entitled to receive?
Posted: Sun May 13, 2012 10:00 am Post Subject:
My mother just combined the two loans. To have two collateral's on the loan.
During the time of the car, she only owed about 7k, before combining it with the boat.
That was a few years ago, that payment would be around 2-3k at most if she had not.
No one expected the insurance to pay for a new car, but Im merely pointing out that would this not play a factor into the claims, that my mother wouldn't be in this worse position, had she not be hit.
The loan had two collateral's on it. Like I said before, the bank in theory could of taken all 12,000 the insurance company paid and left my mother with nothing.
Im merely pointing out that if the bank decided to take it all, she could be without a car at this moment. And how would that factor into the claim?
Essentially this car accident has made things quite difficult for her life.
Posted: Sun May 13, 2012 01:43 pm Post Subject:
The loan had two collateral's on it. Like I said before, the bank in theory could of taken all 12,000 the insurance company paid and left my mother with nothing.
Your mother would not have "nothing." She would still have a boat and an unpaid loan balance $12,000 lower than it was the day before. Her situation is improved. She just doesn't have a car to drive.
No one put your mother in this position except your mother who decided to refinance multiple loans into one -- ostensibly to get a "lower payment" -- without carefully considering the possible consequences. I don't know what you are arguing about, except . . .
Im merely pointing out that if the bank decided to take it all, she could be without a car at this moment. And how would that factor into the claim?
So who's responsible for your mother having a car? That's not the only way to get around town, you know. There are buses, taxis, friends, sons and daughters, skateboards, bicycles, scooters . . . oh, don't forget FEET!
You are mixing several different issues unreasonably, and I think that's the problem, because it's confusing the whole issue. Let's try to unravel the mess your mother created.
When a vehicle is the security for a loan, the lienholder generally wants to be an "additional insured" in the sense that if there is a total loss, they are compensated for the security that no longer exists. They are entitled to 100% of the unpaid loan balance -- that's their interest in the vehicle. (It works exactly the same with any property insurance, such as homeowner's.) And, guess what? If the insurance doesn't pay off the whole loan, you still owe the balance. And if you have no car, too? Well, life can be inconvenient, can't it?
Nothing in the insurance contract promises to pay off a loan -- except that in auto insurance, there is an additional coverage called "GAP" -- Guaranteed Auto Protection -- that serves to increase the coverage in the event of a total loss, and that increase usually, but not always, covers the difference between the Actual Cash Value of the vehicle ("ACV" = replacement cost minus depreciation) and the remaining loan balance.
BUT . . . even GAP coverage in this case would not do that, because the total loan amount is not based on the original value of the vehicle, but that of the car PLUS a boat.
OK. Now we don't have all the details provided to us here, so we have to make up some for the sake of illustration. But what it seems to me you are asking would fit the following scenario:
If the car is worth $12,000 and the boat is worth $12,000 and the unpaid loan balance is $20,000 on an original loan balance of $24,000, you are apparently under the belief that the amount of the loan attributable to the car should be less than $12,000 ("The bank in theory could of [sic] taken all 12,000 . . . and left my mother with nothing.").
And here's the problem. Loans and insurance as you would have it in this situation are like oil and water. You have one loan but two DIFFERENT securities for that loan. And you have two DIFFERENT insurances which each cover different securities. The two insurances COMBINED might cover the debt, but neither by itself will cover the whole debt.
The bank makes no promise that in the event of a total loss to either the car or the boat that it will make sure you still have money to buy another car or boat. The bank's only concern is that it gets its $20,000 one way or another.
There's no "theory" about it. That's where your problem lies.
And how would that factor into the claim?
It has NOTHING to do with the claim. The bank is not the insurance company, and the insurance company is not the bank. Each considers its own interest only. They don't get together and ask, "How are we going to do this so that Travis's mom comes out in the best possible way." They could care less.
If the car is totaled and the insurance company pays $12,000 as the value of the vehicle, the bank may apply that entire $12,000 to the unpaid balance of the loan, unless there is a provision in the loan contract that would prorate the bank's interest in the car and/or boat as the loan balance is declining. I've never seen a provision like that in a loan contract.
Take a close look at your credit card contract for a similar situation. You apply for a new credit card with a "teaser" rate of 0% interest for 6 months on new purchases and a 0% interest rate for 12 months on balance transfers. You transfer a $12,000 balance. Over the next 6 months, you purchase $12,000 worth of stuff, and make $600 worth of payments.
When the first 6 months is up, the interest rate on the new purchases is 12%, and you don't make any new purchases in the next 6 months. But you keep paying $100 per month on your bill. At the end of the next six months, the balance transfer interest rate jumps to 18%. You make a payment of $10,000. But you didn't pay much attention to the balances due.
You look at the next month's statement (month 13) and see that you owe more than $1,000 on the "new purchases" balance and you owe almost $13,000 on the "balance transfers" balance. You call the bank and want to know why they didn't use the $10,000 to reduce both loan amounts.
That's when you learn how credit cards work. The loan contract says, "We will apply your payment to the outstanding balance with the lowest interest rate first. If all of your outstanding balances have the same rate, we first apply your payment to the "new purchases" balance, then to any other balance of our choosing."
Similarly, the bank in your mother's situation does not have to apply loan payments to the equal reduction of the debt against two securities. It absolutely could have said, "Well, now your loan balance is only $8,000," and the monthly payment -- which will not change -- would actually pay off the loan earlier and save your mother a few dollars worth of interest. Confused? You should be.
Because the whole debt is confused with multiple securities. People do this to their homes by refinancing cars and boats and credit cards and student loans all into one new debt with "a lower payment" -- and wonder why they aren't getting out of debt.
But, charitably, it appears that the bank actually did something like prorating the security. Instead of keeping the entire $12,000 insurance payment as it could, it released $3,000 to your mother. Why?
So she would have money available for a down payment on a new vehicle, and . . . lo and behold . . . they would be happy to refinance her boat AGAIN along with another car, keeping your mother in debt for another 4 or 5 or who knows how many years.
Having a car to drive is not an entitlement. Neither the bank nor the insurance company cares whether you will have a car to drive tomorrow. They don't promise you anything of the sort. Each is only interested in its own affairs, and its own profitability.
On the other hand, our government in the past 3-1/2 years has upped the ante on entitlements and now millions more people believe they are entitled to all sorts of "free" this and "free" that -- and we're being told, "The insurance company will pay for it." No one has to work, you just get whatever you want.
When it comes to borrowing other people's money to own a car, boat, or home, or buying insurance to protect those things, WE DON'T MAKE THE RULES. The banks and the insurance companies do, and the rules are: "You take the contract as it is written, or you don't take it at all." It's called a contract of adhesion.
Most people take those contracts without ever reading what they have to say. In some cases, we don't even get the chance to read the contract in advance -- which is a detriment to us. If we later discover something in the contract we don't like, we have no ability to change it.
But even if we discovered it before we signed the agreement, we still couldn't change it. Because it's not our contract. If we don't like it, we have to leave it on the table and go looking for another one with the provisions we like. Do most people do that? NO. They want the car, boat, or house NOW!
I want, I want, I want. And I want it all NOW. Fast food, easy money. But let's get back to the issue at hand and look at it the way I think you want us to.
What if the insurance company pays your mother the $12,000 instead of the bank. What will your mother do with the money? Buy a new car, buy a new boat? How about taking a $5 bus ride to the Indian "gaming establishment" and putting it all on RED in the hope of doubling her money so she can pay off the bank?
And what if BLACK comes up instead? Now she has no money at all and no car. And she still owes the bank $20,000. Do you see where this is going?
You are trying to make the insurance company the solution to your mother's problem. Her problem is not NOT HAVING A CAR to drive. Her problem is being in debt. The debt on her car might as well be $20,000 and the debt on the boat $0. The bank gets to decide that because BOTH securities are pledged to one loan. That's why the insurance company doesn't pay the money to your mother.
You say she doesn't gamble? Of course she does. She gambled big time when she put the car and boat into the same loan. And she lost all but $3000 on this bet.
Don't want this to happen again? Don't combine debts. Better yet, don't have any debt. That one's harder for most of us, but it's not impossible.
Posted: Mon May 21, 2012 02:17 am Post Subject:
To nicely answer this quote
So who's responsible for your mother having a car? That's not the only way to get around town, you know. There are buses, taxis, friends, sons and daughters, skateboards, bicycles, scooters . . . oh, don't forget FEET!
--- She lives in a rural area. There is no bus, there is no family. There is no walking. The closest grocery store is 40 miles away. She can't wait that, and no bus comes through and she cant afford a taxi every day.
Posted: Mon May 21, 2012 03:58 pm Post Subject:
She lives in a rural area. There is no bus, there is no family. There is no walking. The closest grocery store is 40 miles away. She can't wait that, and no bus comes through and she cant afford a taxi every day.
OK, so mom lives in rural America. That still does not answer the question,, "Who's responsible for your mother having a car?"
It's not the insurance company, and it's not the bank. Mom chose to live where she does, and now life is a bit inconvenient.
In the longest sense, life is hard and then you die. It is what it is.
Our conveniences (or inconveniences) are a result of _______________ ?
(A) our own making
(B) our own choices
(C) the fault of others
(D) all of the above
(E) none of the above
If life in rural America, however blessed it may be, is now inconvenient for want of a car, there are two choices:
(1) buy a car
(2) move into town
Don't like either choice? Then, what's true is still true: life is hard and then you die.
The situation your mother is in is one of her own making. Someone damaged her car and now she doesn't have one. But she was compensated for the damage to her car, and she still doesn't have one. You want someone else to take responsibility for her not having a car. Unless you do, no one else will, because no one else, including you, should.
On the other hand, if you want to be a good son, like my wife "encourages" me to be to my 88 year old mom, then you'll buy her another car. Or not.
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