Repair or total, who decide it?

Posted: Wed Sep 02, 2009 05:16 am Post Subject:

I've seen that a car is generally considered to be "totaled" following an accident, only when the repair charges are equal to 70-80% or more depending on the state it belongs to.

If the at fault insurance company want to "total" your car, your insurance company can repair it.

Posted: Wed Sep 02, 2009 11:46 am Post Subject:

Who decide that?

If the at fault insurance company want to "total" your car, your insurance company can repair it. Can you repair it through your own insurance and then claim "diminished value" from the at fault party?

Posted: Wed Sep 02, 2009 02:30 pm Post Subject:

I mean in this case, usually your insurance company come first. They decide that the car could be repaired and sent you a check for repair.

You actually want to go through the other guy's insurance. However, the other guy's insurance want to finish it with a "total loss".

Do you have the right to use your insurance to fix the car and neglect the "total" issue?

Posted: Wed Sep 02, 2009 02:30 pm Post Subject:

When a company totals a vehicle varies from insurer to insurer. Just yesterday, an appraiser for a major insurer stated that all his company claims go to a review department if the repairs approach 65 percent. A first party insurer always has the policy and contractual rights to total your car at any time of the claim and you have the right to retain your property. This does not mean that your vehicle will be claimed a total loss by the state. This is a calculated move on the insurers part to remove themselves from as much liability with as severe a repair as possible. Paying for repairs instead of taking control of repairs removes the insurer from any liability and places it directly on the repairer of the car. Totaling a vehicle ensures removal of all future liability with that damaged vehicle.

If the at fault party offers to total your vehicle and make you whole, it hardly seems ethical to use your policy to repair your vehicle and then claim dimunition of value and ask them later to make you whole. A judge, if litigated, may look at the situation as an unjust enrichment possibly.

As a collision shop owner, I am inclined to help people get severely damaged vehicles totaled as I am familiar with the long term effects of repairs in the aftermarket even if those repairs are completed to the best of human ability and workmanlike standards with as little third party interference as possible. No severely damaged car will ever reclaim the quality that of an undamaged one and most certainly will not return the value to that vehicle. The quality and completeness of collision repairs have been hampered and diminished over recent years where third party payers have forged agreements for the cheapest and fastest repairs so as to maintain profits for company shareholders in mine and other collision consumer advocate's observed opinions.

Insurance companies base their costs on projected expenses and must seek approval with various state inurance commissions for those rates. If memory serves me correctly approximately 97 percent of those premiums were returned to policy holders in the form of indemnification or refunds from mutual companies. In the mid 1990's insurers began a pattern of denying more claims and profiting from the claims side which was not the intended purpose. Insurers have recorded excessive profits from the mid nineties until recent years even in light of excessive disasters.

It makes sense that insurers would base their indemnification closer in line with their projections and that policyholders and claimants alike would benefit from indemnification which would restore their vehicles to best of human ability with the best of available parts made by the manufacturer of the cars instead of poor quality imitation parts which devalue vehicles and enrich insurers and shareholders at policyholder's expense. They would not encourage working faster and cheaper and in volume which only lead to some collision owners and techs taking short cuts and possibly making mistakes or sacrificing quality at the vehicle owners expense.

It is for this reason that the rise in dimunition of value has increased and the public awareness that it is owed in certain cases. The notion that a wrecked car will never be as good as new or repaired to the quality it once was occurs all to often in this speedy gonzalez get it done fast mentality. Good repairs aren't cheap and fast repairs only lead to poor quality which lead to the public stigma that is attached to wrecked and repaired cars and their resale and trade in value AND POTENTIAL SAFETY OF THE DRIVER AND THEIR PASSENGERS.

Posted: Wed Sep 02, 2009 02:46 pm Post Subject:

Two things need mention: No.1, the car is new, with only 6000 miles on it. If it will be totalled and the amount they decide is far below the market price from blue book, do I have to agree with that?

Also, if I use blue book as reference, which price should be used? Trade in? Private party? or Retail price?

Thanks.

Posted: Wed Sep 02, 2009 03:28 pm Post Subject:

If you are looking for payment for the loss from the at fault driver you are owed what is necessary to put you in a position you held before the loss. (non legal opinion and observation). You are not bound by terms and conditions of a policy or contract of insurance that you are not a party to. They are required to make you whole. What makes you whole? To be in the position you were in with regard to that vehicle with one of like, kind, and quality or the value of one and the associated losses with registering, titling, relicensing, inpections, sales tax, etc. If you paid too much for a vehicle or are upside down in the note, the at fault party is not liable for your decision to place yourself in this predicament. They only owe for the fair market (Retail sales value) of the loss in property.

If you are dealing with your own insurer, they either owe the cost to repair to the terms defined in the policy or to pay you for the loss in money for the fair market value of the car; not what is owed on it. If they repair the car they must return it to it's preloss condition but not value. The at fault insurer's policy holder could be held liable for the loss in value and the insurer in turn would be come liable under tort law. (again I am not an attorney and this isn't legal advice)

You should be using nada or edmunds or blackbook or an average of the three to ascertain the vehicle's value as near you can. You can go to nada.com and edmunds.com to put your mileage, location, and options into their data bases to come up with a reasonably close appraisal of your vehicle value.

Your options would be to repair if it is repairable and hope the repairs last the life of the car. If you intend to trade immediately or soon after repairs, you will take a huge hit on trade in value with the accident history. As the car ages, the loss in value diminishes in time. You could offer the vehicle for sale if repairable and take the proceeds and insurance check to pay off your note and retain any money left to place on a new vehicle. Or if totaled and you receive a fair market value that is high enough to satisfy the debt still on the car, you may have money left to place a downpayment on a new vehicle. If you come up short or upside down on the note and you do not have gap insurance, you could be out of pocket those expenses.

Seek policy advice from your agent if you have one and legal advice from a trusted attorney that can advise you on property damage. If you do not agree with the amount of loss in damages or the value of your property loss, you may have the right to appraisal if it is in the policy. The appraisal process was meant to be a cost savings measure when you and your insurer disagree as to the amount of the loss. Some insurers have eliminated this process from the contract and your only remedy may be to file a small claims lawsuit or seek legal action against your own company if you disagree to the amount of the loss.

The appraisal clause simply mean you select an appraiser to assess the value of your loss and the insurer must select a disinterested independent appraiser to represent them. Those appraiser seek an umpire in advance to use if they are unable to agree on the value of the loss. The process may or may not be binding on the insurer depending on the policy language or their motivation. If the difference is 300 to 500 dollars difference it may not be feasible or logical, but if the difference is in the thousands of dollars, the umpire and appraisers fee for your portion may be worth the expense.