Auto Insurance Claims: Total loss dilemma, repair estimate, rear frame

Question
Claims Guy,

I was rear ended 1/22 and reported the incident with my insurance that day. The car caused me to bump into a third party. The at fault party provided their information and I also spoke with their insurance.

My insurance gave me an estimate of 4,000 for the repair. I have collision coverage so it would cost me 1,000 dollars (my deductible) and they would repair my car in 8 days. They do not pay for a rental and I would be without a car for that time, which unfortunately is not an option. I don't exactly have the funds to pay for my deductible or a rental.

Considering I did not want to pay out of pocket and I was not at fault, I thought it would be best to go through the at fault party's insurance. Their insurance was very helpful at first. I took my car to the shop, and they began the estimate. The same day, they gave me a rental, because they covered it and they let me know that as long as the car is in the shop I am covered. Repairs were set to begin as soon as the estimate was complete. The repair estimate was $9348.71. I was then called and asked to return the rental because the car was deemed a total loss. They told me that the at fault party must be contacted to see if they would not want to make a claim as the at fault party is only covered up for 10,000. The value they gave me was $14,606.30 for the total loss.


My car runs fine. The rear frame has some damage and they explained to me they would rather not risk repair and that they have to confirm that the third party does not want to make a claim.

I would like to know what I could do to fix my car. I can't quite afford to pay my deductible and get a rental (and I certainly can't miss work for 8 days). What could be some options I could pursue?

Answer
If I understand correctly, the at fault party owes claims to both you and the 3rd party.  Your t/l claim is worth $14,600 and they do not yet know the amount of the 3rd party's clam, if any.  The problem is that the at fault party's coverage has a 10,000 limit, which is insufficient to cover your loss, let alone the 3rd party's loss.

In this is the correct scenario, then you should definitely make your claim with your own insurance carrier.  They will handle your claim as a total loss and pay you the actual cash value minus your deductible.  This will likely be roughly $13,600.  You can then use this money to buy a new or used car.  (the actual amount may vary depending on their evaluation method)  You will sign the car over to them.

If you do not like this option, you could tell your insurer you want to "retain the salvage."  If you do this, you will keep the car and they will pay you the total loss value, minus your deductible, and also minus the salvage value.  The salvage value is the amount they could sell the wrecked car for.  You could then use the amount they give you to make repairs on your own.  You won't be able to fully repair the car with this amount, but you may be able to repair it enough to your satisfaction.

Regardless of how you settle the claim, your insurer will make a claim against the at fault party's insurer for your deductible plus the amount they pay out.  And so will the 3rd party's insurer.  But the most the at fault insurer will pay is 10k, and they will split this between both insurers on a pro rata basis.  So you will get some of your $1k deductible back in a few months.

It makes no sense to settle with the at fault insurer now.  You will definitely get less money if you do this.  Work with your own insurer in this scenario.

Good luck!