by august1251 » Mon Mar 23, 2015 09:17 pm
Can my insurance company force someone else's car to be totaled? Isn't that like stealing it from them?
I was driving my GF's car and got in a minor accident. I was using her car because someone had totaled mine and I ran out the rental allowance before finding a new one. I was still paying for my insurance, so my comprehensive covered her car. The damage to her car is mostly cosmetic, but it's an '89 and they said it was totaled. We have been negotiating with them. They sent a check that we did not cash and told them so. Then when it was registration time, turns out her car is now listed with the DMV as salvage. They stole ownership of her car from her. I'm their customer, I had a contract with them, but she did not. They had no right. All I did was file a claim for them to cover my responsibility to her and ask for a settlement offer. She did not sign anything. What can I do to bust them for this and reclaim her clean title?
I was driving my GF's car and got in a minor accident. I was using her car because someone had totaled mine and I ran out the rental allowance before finding a new one. I was still paying for my insurance, so my comprehensive covered her car. The damage to her car is mostly cosmetic, but it's an '89 and they said it was totaled. We have been negotiating with them. They sent a check that we did not cash and told them so. Then when it was registration time, turns out her car is now listed with the DMV as salvage. They stole ownership of her car from her. I'm their customer, I had a contract with them, but she did not. They had no right. All I did was file a claim for them to cover my responsibility to her and ask for a settlement offer. She did not sign anything. What can I do to bust them for this and reclaim her clean title?
Posted: Tue Mar 24, 2015 01:53 am Post Subject:
In many states an insurance company is required by law to consider a vehicle a total loss when the cost to repair is close to the value. It's not steal as the owner is _always_ within their rights to keep the car. Your girlfriend still has the car and she still owns it. I fail to see how this is stealing the car. In addition, most states require that an insurance company change the title to a salvage title if they consider it a total loss. Don't like it... blame the State, not the insurance company. These laws were put into place to protect the next buyer of the car. It's so that they know there was enough damage to the vehicle to make it a total loss.
Comprehensive is a first party coverage. It's _only_ paid to the party with the insurance and, usually, who owns the vehicle.
The insurance company is only responsible for paying for the loss and either pay the repair cost or the value of the vehicle. If the owner keeps the salvage than the insurance company can deduct it's value from their offer.
Again, no one "stole" to car and no one took over ownership of it. So you are incorrect. They followed state law and reported to the state that it was a total loss. The _state_ then changed it to a salvage title.
Posted: Tue Mar 24, 2015 09:40 pm Post Subject:
Thanks for your thoughtful reply.
Is there any way to reverse that salvage status? She can't renew the registration, even though it's still drivable. So she has no car because they said so. It seems like just because we reported cosmetic damage to them, they have taken the car off the road. That's what seems like theft.
The insurance declared it a total loss because the hood and grill repairs were more than 75% of their estimated value for the car. But we think they valued it low. If we can argue a higher value on the car, and the repairs are less than 75% of the new value, can we get them to "untotal" it? Or can we accept a lower repair estimate for the cosmetic damage so that it's under the "totaling" limit for the value?
Thanks.
Posted: Wed Mar 25, 2015 02:55 am Post Subject:
Contact the DMV. I'm pretty sure they can do an inspection to see if it's safe to be on the road and if it passes then she can register it. It's still going to have a salvage title.
You can argue it's worth more and should not be totalled but it appears that they already changed the title so I doubt they are going to do much at this point.
Posted: Wed Mar 25, 2015 03:46 pm Post Subject:
You're talking about a vehicle that's 24 years old. On paper, even in pristine condition, it wouldn't be worth very much to begin with unless it had collector's value. And in that case, an ordinary auto insurance policy is not going to provide proper coverage for a total loss.
As tcope said, the insurance company does not have a responsibility to pay for repairs which will cost about what the vehicle is worth on paper, so the insurer is within its right to declare the vehicle a "total loss". But no one has "stolen" anything from anyone if the vehicle is still in the possession of the registered owner. To have something stolen means it is no longer in your possession.
One person's estimate of "cosmetic" damage is subjective -- the insurance company is simply looking at the cost to repair or replace with like kind and quality parts which are not going to be easily located for many vehicles 24 years old.
The issue for the DMV is, as tcope also mentioned, the safety of the vehicle on the public highways. Chances are some vehicles 24 years old really aren't mechanically roadworthy to begin with -- collision damage or not. The states just don't have the money to inspect them all, so they wait for situations such as this to arise. If the vehicle can pass the safety inspection, then there's no problem. You just might not have enough insurance company money to complete the repairs, that's all.
Then when it was registration time, turns out her car is now listed with the DMV as salvage.
it appears that they already changed the title
On this point, tcope may be incorrect. Only the registered owner can change the title to a vehicle. What most likely happened is the salvage loss was reported electronically to the DMV which places a "hold" on the registration renewal as an "other than salvage" title. The hold will be lifted as soon as the vehicle passes inspection and the title is changed to salvage.
Depending on the state, there may or may not be an inspection fee, and there will probably be a nominal fee for the title change.
If your friend wants to keep the vehicle running, feel free to spend as much money as it takes to do that. Just don't expect the insurance company to pay for it. That's not what they promised to do according to your contract. Their promise is to "indemnify" a person for their loss -- to restore them in whole or in part to the condition that existed prior to the loss, but without gain or profit.
Indemnity is rarely perfect. In this situation, we have a vehicle of limited value, and the promise is to cover "Actual Cash Value" (ACV) which is defined as "Replacement Cost" minus "Depreciation". A 24 year old vehicle probably has as much value as scrap metal for recycle or more as individual junk parts than as a running auto, which is why the repair cost would be high. It was fully depreciated years ago, so the ACV is only several hundred dollars relatively speaking.
If the ACV of the vehicle was $1000 prior to the loss, and the salvage value is $800, if your friend wants to keep the vehicle, the insurance company will pay $200.
$200 + $800 = $1000 -- your friend has been made "whole" in terms of the amount of value she had the moment prior to the loss. She has an $800 lump of metal plus $200 in cash. She may do with the lump of metal as she chooses, because she owns it, not the insurance company.
Posted: Wed Mar 25, 2015 10:59 pm Post Subject:
On this point, tcope may be incorrect. Only the registered owner can change the title to a vehicle.
I've seen this done many times. The insurance company reports to the state that the vehicle was considered a total loss and then state automatically changes the title to a salvage title.
Add your comment