Auto Insurance Claims: Substantial Damage to Auto - Diminished Value, 2006 lexus gx470, lexus gx470

Question
QUESTION: Hi,

Our 2006 Lexus GX470 was hit by a tree last week. The car was rarely driven and has only 39000 miles. The adjuster came out and told us that their estimate was 6,000 but they were not able to see underneath the roof for electrical repairs to the entertainment system, etc so there are more repairs. The SUV has been towed to a certified lexus body shop. My question is at what point does one decide to trade in for a new vehichle because the damage is substantial. Liberty Mutual states that it is not a total loss and the value is near 30k. We have a loan on the car for $22,000 but we don't want the headaches of a repaired car with so much damage. Could we trade in the damaged vehicle to dealership and give them the insurance check and get a new car? Or if we do have it repaired can we get diminished value from the insurance company?
What would be the benefits? We are located in Maryland.

Thank you for any assistance.
Natasha

ANSWER: Hi Natasha,

The decision to repair or total a vehicle out is solely up to the insurance company. The vehicle owne has no say in the matter. The vehicle will be declared a total loss only if te cost of repairs exceeds 70% of the value of the vehicle. You stated tate vlue of the vehicle is $30,000.00 so the repair cost would have to be more than $21,000.00 before the insurance company would consider totaling the vehicle.

If the tree that fell of your vehicle was on your property, then you are dealing with your own auto insurance company. In the state of Maryland you can not receive paymment for diminished value from your own insurance company. Only if someone else was responsible for the damage, then you could pursue payment fordiminished value directly from the responsible party or their insurance company.

I hope this helps
Richard Hixenbaugh  

---------- FOLLOW-UP ----------

QUESTION: Hi Richard,

Thank you for your prompt response. So, would it be worthwhile to look into trading the vehicle into the dealership and giving them the insurance check? Would a dealership do this? I'm just thinking that they would be able to fix the car at a better cost and we wouldn't have to deal with other problems in the future.
Your thoughts are appreciated.

ANSWER: Hi Natasha,

You can certainly ask the dealership if they will do this. However they will likely deduct much more than the cost of the repairs from the trade in value due to the damage history. Even though I said earlier that you can not collect diminished value from your own insurance company, that does not mean that your vehicle will not suffer a diminisihed value due to the damage history.  You will just have to ask. You should be prepared to negotiate vigorously.

Also keep in mind that $6,000.00 in repairs to your vehicle is really not very much. The parts are expensive which drives up the cost. The body shop should provide at least a 5 year warrantee on their work if you decide to have the repairs done.

I hope this helps
Richard Hixenbuagh   

---------- FOLLOW-UP ----------

QUESTION: Hi Richard,

Lastly, the insurance company is asking me whether we want them to issue the payment for the damage to us and the lien holder or directly to the body shop. What would be the advantage or disadvantage?

Thank you so much.
Natasha

Answer
Hi Natasha,

If the check is made out to you and the lienholder, you will only be able to sign the check and send it to the lienholder who will apply it to your loan.

You should select the body shop that you want to complete the work and have the insurance check made payable to them but the check should be mailed to you. That way you can hold the check until you are satisfied with the quality of the repairs.

I hope this helsp
Richard Hixenbaugh