QuestionHey Bennie, I put a Jeep of mine in the body shop last Wed. the 17th. I called the body shop, hoping it would be done, but they informed me my adjuster told them not to start work on it because he may total it. Its been a week and the I'd figured I would have heard something by now. So my question would be, How can it be totaled if it is still driveable. Most of the damage is cosmetic and what would happen to my vehicle? Would they help me get another vehicle or not repair it & drive my Jeep? I don't know what to do, this is my 1st accident since I've had my license and I am not sure of the process. He gave me an estimate to give to the body shop & now they are telling me he said he has authorized it yet? What to do Bennie? Can you please help or give me some advice? Thanks so much & have a wonderful day.
AnswerHi John,
There are many reasons as to why a car could be considered a total
loss even though it is still driveable.
In some states, the insurance law requires that a car be totaled if the cost of repair equals 70% of it's current market value. In other states the law is 80%. Even if your state doesn't have a law covering
this issue, the insurance companies have their own set of rules.
Many use the 70% or 80% rule, while others base their decision on whether or not the cost of repair plus the salvage value equals or exceeds the car's fair market value. The bottom line is that the
insurance company wants to settle the claim for the least amount possible.
If your own company is handling the repairs and you really desire to "save" the car, many companies will work with you to do just that.
If your Jeep is a total, the insurance company will NOT help you get
another vehicle. They will purchase a list of cars from an independent company that has run a survey within 25-50 miles of
your home showing what "supposedly" as vehicles of like kind and quality with similar equipment and mileage. This independent firm
will call dealers to learn if they have a similar vehicle and ask
them for their lowest "willing to sell for" price. If the dealer
doesn't have a similar vehicle they will ask his lowest willing
to sell for price if he did have such a vehicle. They will provide the insurance company with a list of approximately 15 vehicles. The company will then total up all the prices and divide by the number of vehicles to get an "average" selling price and this will be their first offer to you. This is a low-ball offer because if you go to see the vehicles on their list (they will freely provide you a copy), you will find that half of them never existed because they were simply valued at the "if you had one" price and most of the other vehicles are not of like kind and quality.
The settlement now becomes a negotiation issue, so you need to start right now building your own list from dealer quotes, private party
sales, kelly blue book (kbb.com), national auto dealers assocn.
(nada.com), auto trader and other magazines that are published
monthly so you will have ammunition to combat their low offer and
make your own demand for the highest amount possible.
Negotiating a settlement is almost an art form and the process
will continue over 3-5 discussions with the adjuster, He will
slowly increase his offer while you slowly lower your demand
until you find a dollar amount that both can agree on.
You may desire to keep the vehicle and just do minimal repairs
and keep driving it. The insurance company is willing to sell it
back to you for it's salvage value, which they have already
determined based on past experiences. They will subtract that
amount from their offer and provide you a check for the difference.
Be forewarned that if you do decide to keep the Jeep, you must
first sign it over to the insurance company and they must process
it through the motor vehicle department and have the title changed
to "SALVAGED". This is both a state and federal law to protect future buyers by letting them know that the vehicle was once considered a total loss. Once you get the new title back, you will be required to take the vehicle through several different safety
inspections (at your own cost).
The fact that the vehicle carries a "Salvage" title reduces it's
fair market value by 50% as opposed to the same vehicle with a clean title. This means that you will no longer be able to carry comprehensive and collision and if the vehicle is totaled again by
someone hitting you, you will only be paid about 50% of the fair market value for the same vehicle with a clean title.
I hope that you find this information to be helpful. Your feed back by rating my response will be appreciated.
Sincerely,
Bennie
San Francisco Bay Area
