QuestionMy car a 94 cadillac was recently totaled while parked in driveway ! Vehicle has a rebuilt title history and Progressive is trying to deduct for that heavily ! My vehicle was in pristine shape and they did agree, I also recently (within past 3 months spent $2,600 on vehicle in new tires, a.c. compressor, power steering pump, and a few other repairs to bring vehicle to top condition as I was looking to enjoy many years to come from this vehicle ! They did not even want to look at repair reciepts claming that was regular maintenance and did not affect acv ! The only way they came up with their offer price was to call 3 local Cadillac dealers and ask them what they would give for the vehicle due to a rebuilt title ! Since their is no "real" way to come up with value ! All the research I see says deduction can vary anywhere from 0 to 60 % acv. They are hitting me with full 60 %, what can I do to better value this great vehicle ?
AnswerHi Kevin,
Dr. Settlement, J.D. KNOWS insurance adjuster tricks, and how to make the best insurance claim settlement by turning the adjuster’s tricks back on them! I will show you below why you should be MOST thankful for the low value the insurance adjuster placed on your Cadillac.
First, though, thanks for buying American: you are an economic patriot. Yes, the Caddy is a good ride, and with the money you put into it, there would be many good trouble free miles left for you to enjoy. Hence, I am going to show you how to keep your vehicle.
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Three Ideas When the Insurance Adjuster Undervalues Your Vehicle
• First, consider lowering the repair cost by repairing with USED and/or NON-Original Manufactures' Equipment (OEM) PARTS and stipulating to ignore some cosmetic damage; that will allow the insurance company to do the repairs within the percentage of allowance of actual cash value that it has already specified; OR
• Second, buy back the car from the insurance company as salvage, repair it, re-title it, re-license it, and KEEP YOUR CAR; OR
• Third, fight the actual cash valuation with your own research and communicate in writing.
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Lower Repair Costs With USED and/or NON-OEM Parts
SAVE YOUR CAR FROM BEING TOTALED BY REPAIRING WITH USED and/or NON-OEM PARTS and STIPULATING TO IGNORE SOME COSMETIC DAMAGE.
Before we get started, have you thought about keeping your car? Many times people have put a lot of money into maintenance OR EXPENSIVE REPAIRS (just as YOU have done) in a high mileage vehicle, and they KNOW what they have will work as reliable transportation for them.
Have you considered whether or not YOU want your car "totaled"? Do you know whether or not the money you will receive will buy you anywhere near the same quality of transportation that you enjoy with your present vehicle?
It sounds like your vehicle is a good one to keep, Kevin. It has good maintenance work, and it is in good shape. Will you have to incur a loan payment to get adequate transportation if you were to let them total your ride?
You put a lot of money into repairs and new parts in the past 18 months. You will not get that money back in actual cash value of the car, but the repairs may have made your vehicle desirable to continue operating.
So, rather than taking the low offer of cash and trying to find a vehicle that will be reliable, others in your position have elected to put the money into fixing the wreck with used parts, leaving aside cosmetic damage (who cares if you drive a thirteen year old car with some bumps and bruises -- especially when that will reduce the repair bill a ton??).
So the first thing, if you are happy with the performance of your car, or if you have put a lot of money into maintenance or repair, would be to explore ways to keep the Cadillac.
Ask what the body shop would charge to repair your vehicle with USED and/or NON-OEM parts. You can negotiate to leave some cosmetic damage showing to save money. I would not be surprised to see up to 45% come off their repair bill in that case. If you have a car that was running fine, why not keep it, even if you have to drive around with some dents showing?
Find out the maximum amount that the insurance company will pay for repairs before they elect to total your vehicle. Then arrange for your repairs to be done within that limit. This is my first choice and better if you can make it happen. If the adjuster still wants to total your car, then you have to go to the next step.
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BUY BACK CAR FROM INSURANCE COMPANY, REPAIR IT, RE-TITLE AND RE-LICENSE IT, AND KEEP IT. YOU GET YOUR EQUITY, LESS THE SALVAGE VALUE THAT YOU PAY TO BUY IT BACK AND THE COST OF REPAIRS PLUS INSPECTION AND RE-LICENSING COSTS.
Here is one way to get the insurance adjuster at her own game of low actual cash value. Let's say that you value your car at $9,500, but the insurance adjuster, after considering the latest documentation you have to offer, values it at only $2,165. Don't forget, that is her value BEFORE THE ACCIDENT. Hence, the value of your car now is A LOT LESS, and we call this the salvage value.
You will pay the salvage value if you want to buy the Caddy back from the insurance company. Hence, ask about the salvage value: it should be VERY LOW. She thinks she has made a good deal for her company by proving a low actual cash value. THAT IS HER TRICK: but here is how we are going to turn it around to YOUR ADVANTAGE. If, after reading this and trying the first idea above without success, you are forced to go to salvage, THEN DO NOT UTTER ONE WORD ABOUT HIGHER VALUE since the salvage value is going to be dependant upon what the insurance adjuster establishes as the actual cash value.
Salvage value should be no more than 20% of her actual cash value. Hence, if you are going to try for this method, then do not fight one bit on trying for a higher actual cash value inasmuch as all you will be doing is raising your salvage value. Let’s say that salvage value here will be around $450. Let’s say that the repairs per the original estimate is $3,900, BUT YOUR DISCOUNTED REPAIRS with used and/or NON-OEM parts is around $1,400. Why not work a deal with the adjuster to BUY BACK YOUR CAR for $450, and then work with the body shop to do the repairs for $1,400?
NOW, if you were to let them total the vehicle and then they would pay to you their $2,165 actual cash value, AND THEN YOU set up the repairs to be done with USED and/or NON-OEM PARTS, and perhaps forgoing some of the strictly beauty finishing items, you could get repairs done for a lot less than the estimate given to the insurance company: $1,400, as we noted above.
You will have to take your salvaged and repaired car to the state patrol to be inspected as a salvaged vehicle. You will need paperwork from both the insurance company and the auto body shop that confirms both the amount you paid for the salvage, the fact that you are authorized to title the vehicle, and a receipt for the work and parts from the auto body shop. The auto body shop owner knows how to do this. You pay for the inspection and then the re-licensing through the Department of Licensing. So leave aside around $100 for the state inspection, plus the cost to get new title, license plates, and tabs. The cost for the latter will be the same for any other vehicle of the same price as your salvage buy-back price PLUS cost of repairs, perhaps $160 in this case.
In summary, you got $2,165 cash for the car, and you paid out $450 to buy it back and $1,400 to get it repaired and ready for inspection and licensing, which are $100 and $160, respectively. Thus, your total out-of pocket outlay will be the $450 plus the $1,400 plus $100 plus the $160, for a grand total of $2,100.
Even if you did not come out even, as in my example, but instead had to pay a few hundred dollars more, it STILL would be the best way to go since you MUST CONSIDER also the recent investment you made in repairs and the fact that this is the ONLY WAY you are going to see the value of that money.
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Fight Actual Cash Value and Present Your Own Research, and COMMUNICATE IN WRITING.
Now, changing topics back to how to get that value up for the insurance adjuster, let's get started for you. The first tasks are to get at the actual cash value and next throw out that outrageous offer that they made you.
Three things come to mind. First off, make a WRITTEN LIST of all the work you did and parts added, with prices for each and date and mileage when each was done. Cull out those items that are obvious maintenance, and focus on those items that WILL ADD VALUE to the car. The issue is: how much (if any) did they increase the FMV or actual cash value of the car. See this link and scroll to the bottom for more information on that topic. Car Accidents: Totaled, Repair, Valuation, Your Rights http://www.settlementcentral.com/page0007.htm in a car crash.
Go to the very same dealers and get them to tell you that some of the work done would add value to the car. If they remember talking to the insurance adjuster, then ask them if she ever bothered to ask them whether any of your repairs and new parts would have an impact on increasing the actual cash value. I am willing to bet that some of these items WILL have an impact on the value.
Next, explore with them and online as to the true impact of having your car title show as a rebuilt. The issue here is how much more a buyer would pay for a car like yours with no history of having been rebuilt. It is INANE to suggest that the buyer would pay TWO AND A HALF TIMES THE VALUE OF YOUR CAR just to buy a like vehicle that had not been re-titled.
Do the math. If your value, ignoring the title issue were $10,000, then a 60% reduction means that the value would be $4,000. Hence, they are trying to tell you that all else being equal, a buyer would pay 2.5 times the value of your car just to get one that had not been re-titled. Now that borders on STUPID. So attack, attack, attack this inane conclusion.
What makes sense to me? Well, first you should be able to look at your re-title file and to determine what work had to be done to restore the vehicle. Next, that work had to have been done to acceptable standards for safety in order to pass the state patrol inspection. Third, assuming that the work does not show and that no real structural defects exist, then the difference between your vehicle and another that had not been re-titled would be a lot less than 2.5 times the value of your car.
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Also argue about the age of the car. New SUV buyers are not going to like a car with an accident history. But for gosh sakes, when you are buying a fourteen year old car, everyone expects that it has been in at least one accident.
My guess is that if your vehicle is worth $10,000, then someone would pay maybe $1,000 more to buy a vehicle without the re-titled history. That is the maximum anyone would pay to avoid an older car like yours. So agree to no more than a 10% to 15% penalty for the title issue.
Finally, actual cash value IS NOT WHAT A DEALER IS GOING TO PAY FOR IT. The value you are seeking is the fair market value: what a willing and knowledgeable buyer and seller would agree as the price. They have you looking at wholesale price, not retail
My favorite sites for valuation are www.Edmunds.com and www.autotrader.com. They want to know your zip code, and then they ask for a range in miles to search. Don't limit yourself to your city: it is reasonable that someone could go up to 300 miles to pick up a used car. That way you will get a lot more information. Be aware that you should pick the option "any distance" from your zip code. You can use information from local papers, advertising flyers, car dealerships, and the Internet.
Be aware that the prices shown are the "asking" price, not the actual cash value. But also be aware that the insurance adjusters may have used a computer scan of sales that were at the trade-in value, NOT the actual cash value.
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5. Final Topic: Communicate in Writing—“DEMAND”, Don’t ASK
Effective communication with insurance claims adjusters. Establish Firm, Professional, and Positive Relationships With the Insurance Injury Claims Adjuster http://www.settlementcentral.com/page0059.htm
Always communicate with the adjuster in writing, showing your own analysis of value. It is OK I guess to have one call or so, but no more. Always have your information and ammunition in writing to give to the adjuster.
Let him know that you are FIRM IN YOUR RESOLVE to get what you are demanding (NOT "asking", since that invites a counter-offer, but instead "demanding" as fair and reasonable compensation) by asking him what the options are to resolve the matter fairly should he not agree to a reasonable claim value. In other words, let him know that you will go through with a court filing if need be.
Remember these tips, do your homework, print out your evidence, show resolve to get your fair settlement, and you will DO JUST FINE.
I trust that my extra time here has produced some information that has been of value to you, and thus I would respectfully request that you take the time to locate the FEEDBACK FORM on this site and leave some feedback for me.
Best Wishes,
Dr. Settlement, J.D. (Juris Doctor)
http://www.SettlementCentral.Com
