Auto Insurance Claims: DAMAGED TITLE, salvage title, diminished value claims

Question
QUESTION: MY 2003 TAHOE WITH ONLY 61,000 MILES ON IT WAS DAMAGED TODAY. THE OTHER DRIVER IS AT FAULT. THE TAHOE HAD A DAMAGED TITLE. THE DAMAGE IS BAD ENOUGH TO TOTAL IT AGAIN. WILL HIS INSURANCE COMPANY PAY LESS BECAUSE OF THE PREVIOUS DAMAGED TITLE.

ANSWER: Short answer, 99% yes.

If the title reflects a salvage title, then the carrier will almost always deduct quite a bit from the ACV, (actual cash value) but there is no rule of thumb for this.  Frankly, most people just accept that their vehicle is less valuable when it has a salvage title, but in my opinion, actual market data should be utilized.  

I can definitely expand on this question, but it may become complicated.  Vehicle values and damages are what my company specializes in.  The fact that the carrier will reduce the value of your vehicle based on the accident history is striking evidence for the existence of diminished value claims.  I am expert on diminished value and vehicle value in general, so let me know if you have any further questions.

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

QUESTION: Thank you for your answer. But can you tell me why we have to pay full premium price for our insurance? If its worth less when totaled, why don't I get a small discount for that reason? Also, shouldn't I have received more money from the insurance company when the first person wrecked it for me. It wasn't our fault that time either. It didn't get totaled, but the state said it was enough for a damaged title. Finally, what is todays average deduction for a marked title?

Answer
Normally you will not be able to get full coverage on a salvage vehicle.  You should have received a settlement for diminished value when the first person wrecked it.  The premium you have to pay is completely up to your insurance company, but I know in Texas, insurance companies will not insure a vehicle that has been previously totaled.  They will insure the driver, but not the vehicle.  The average deduction is hard to pinpoint.  It is different based on the claims adjusting policies set forth in the company.  All the companies that I worked for deducted 50% from the actual cash value if the vehicle had a salvage title, but I have seen some companies reduce by only 25%.  I'm sorry I could not give you an average, but it would be useless.  The average would not be a reflection of the true value deduction.  If I knew the State and insurance carrier information, I might be better able to speculate.

I hope this helps.