QuestionMontrose, Colorado: On May 30,2006 as my mother was driving through a parking lot at a grocery store a gentlman {in his company vehicle} backed into her 1994 Toyota Camry. The police were notified and the gentleman was issued a citation for "Unsafe Backing in a Parking Area." I notified not only her insurance (State Farm) but the gentleman's insurance (Hartford). The preliminary estimates (2 of them) for the cost of the repairs are $4,542.31 & $4,790.36 {both body shops stated they had never seen so much damage to a vehicle just by someone backing into another vehicle}. My mother and I were informed by one of the auto repair shops that her Camry was only Blue Book valued at approximatley $3,300; thus the insurance comapny (Hartford) would probably just total her vehicle, thus paying what it would be valued at in this area and not pay for the repairs. My question is if this indeed true, and if so what course(s) of action does my mother have? This would be totally unacceptable to her. As of this e-mail no determination has been decided by Hartford. I would appreciate any information or comments that you might have concerning this particular matter. Thank you.
AnswerDear Anthony,
The decision to total usually comes when the cost of repairs exceeds around 70%-75% of the actual cash value of the car (BEFORE the accident). In this case, I think the actual cash value of the car is a lot higher than stated, unless it has super high miles. Here are three ways to approach this problem.
BUT ALSO PAY ATTENTION TO MY LAST PART ABOUT POTENTIAL INJURIES SINCE THAT IS A REAL PROBABILITY WHEN YOUR MOM HAD SIGNIFICANT TRAUMA IN AN ACCIDENT.
1. THREE IDEAS FOR COMBATING AN OFFER OF AN UNDERVALUED VEHICLE THAT THE INSURANCE AGENT WANTS TO TOTAL
• 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 MOTHER'S CAR; OR
• Third, fight the actual cash valuation with your own research and communicate in writing.
Here are the details on those three choices.
A.) 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, it appears that you and your mother have already thought about keeping her car. Many times people have put a lot of money into maintenance OR EXPENSIVE REPAIRS (i.e. new transmission) in a high mileage vehicle, and they KNOW what they have will work as reliable transportation for them.
The little money she will receive will probably not buy her anywhere near the same quality of transportation that she enjoyed with her present vehicle. Thus, she may be willing to have repairs done with less expensive parts or to ignore a little cosmetic damage if she is able to retain her good ride. So, rather than taking the low offer of cash and trying to find a vehicle that will be reliable, many people put the money into fixing the wreck with used parts, leaving aside cosmetic damage (who cares if you drive a twelve 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 her car, and if she has put a lot of money into maintenance or repair, would be to explore ways to keep the car.
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 one has a car that was running fine, why not keep it, even if you have to drive around with some dents showing?
That means even using their low actual cash value of $3,300, if you can show an adjustment in actual cash value of just $375 to $3,675, then you will likely be allowed to have the car repaired. You have to work the adjuster and the auto body shop on this.
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.
B.) 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. Let's say that you value your mother's car at $4,700, but the insurance adjuster, after considering the latest documentation you have to offer, values it at only $3,300. Don't forget, that is his value BEFORE THE ACCIDENT. Let's say that you both would agree the actual cash value was $3,675.
One would have to consider the amount of damage done in the accident to come up with a salvage value, but it should be a lot lower than the value before the accident, in which the adjuster agreed already was $3,675. So, before you decide to total the car, ask the adjuster what the salvage value would be. That is the amount that the company will get for the car after the accident, in its post-accident state, without any repairs having been made. In this example, depending upon the cost of the repairs, the salvage value could be around $300. Hey, this is ONE advantage of having them give your car a low actual cash value: the salvage value should be pretty low!
NOW, if you were to pay that amount and then to 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. Say, around $2,100 (65% of AVERAGE of both quotes).
Plus, once the car is repaired, you will have to take it to the state patrol to be inspected as a salvaged vehicle. 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.
Here is how the math would work out. You get the actual cash value that you and the adjuster agree upon, which is going to be $3,675, his full value in this case. Then you have to buy back the car from the insurance company, which in this case will be the $300 salvage.
Your mother will have the auto body company authorized to repair with USED and/or NON-OEM PARTS, which in this case, will bring the car buyback and repair cost to $2,100 plus $300.
To that she will add the cost of inspection ($100) and re-licensing (say 8% sales tax times the salvage buy-back price of $2,400, equals $192).
In summary, she got $3,675 cash for the car, and she paid out $300 plus $2,100, and for inspection and licensing, $100 and $192, respectively. Thus, her total out-of pocket outlay will be the $300 plus the $2,100 plus the $100 plus the $192, for a grand total of $2,692. She has her car back, but relicensed for a new year, along with some cash in her pocket.
C.) THIRD, FIGHT THE ACTUAL CASH VALUATION WITH 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.
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. Note: you could also pick the option "any distance" from your mother's zip code for more choices. 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 have used a computer scan of sales that were at the trade-in value, NOT the actual cash value.
Perhaps you have made major item replacements, above and beyond normal maintenance; then you need to document them and ask for a review of those extras. For example, a rebuilt transmission or the like will add value to a used car. How about new tires or a new stereo system? The issue is: how much (if any) did they increase the FMV or actual cash value of the car. See the above 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
2. DO NOT NEGLECT HAVING MOM SEE A DOCTOR. BE AWARE: SOFT TISSUE SIGNS CREEP UP ON YOU: OPEN MEDICAL TREATMENT SOON.
I would love to have a dollar for each person I know of who put off seeing a doctor when "little" pains surfaced following an accident, only to experience pretty bothersome pains three months later once the body is subjected to a normal workday and physically demanding daily tasks and hobbies.
There is the probability that your mother sustained some soft tissue injuries. With your mention that they may try to total her car, one concludes that her car suffered significant property damage. That leads one to conclude that it is likely that there was more than sufficient trauma to cause soft tissue injuries.
Many people want to ignore that little nagging pain that comes after a full day at work or after doing spring yard work or other outdoor activities. They do not realize that often times soft tissue injuries do not manifest until weeks later.
There may be a dull ache at night following some physical activity or pain the next morning. DO NOT LET HER LITTLE PAINS GO UNATTENDED SINCE YOUR MOTHER DOES NOT KNOW WHETHER THEY WILL CONTINUE OR GO AWAY. We all hope and believe that such little pains will disappear soon. But on the other hand, we have no way of knowing since this is the way serious soft tissue injuries can behave. SEE A DOCTOR AND ATTRIBUTE THE PAIN TO THE ACCIDENT WITHOUT EQUIVOCATION. It is NEVER TOO LATE TO REPORT PERSONAL INJURIES FROM A CAR ACCIDENT http://www.settlementcentral.com/page0104.htm
Managing Medical Care After Auto Accident: http://www.settlementcentral.com/page0203.htm
3. LEARN ABOUT PERSONAL INJURY INSURANCE CLAIMS AND INSURANCE SETTLEMENTS
Use a Confidential Personal Injury Diary for TOP DOLLAR Insurance Claim Settlements http://www.settlementcentral.com/page0208.htm
Make darn sure your doctor does have updated full information in her records, or the adjuster may not give you credit for what you have been through. Personal Injury Medical Records http://www.settlementcentral.com/page0114.htm
Finally, I want you to be an effective communicator of your mother's demand for settlement. Don't just call up the adjuster and start discussing your demands. Instead take the time to make your mother's own demand letter—that is one step that will really pay dividends for her.
Write Effective Personal Injury Insurance Demand Letter http://www.settlementcentral.com/page0170.htm
I trust that my extra time here has produced some information that has been of value to you and your mother, and thus I would respectfully request that you locate the feedback form on this site and leave some feedback for me.
Best Wishes,
Dr. Settlement, J.D.
http://www.SettlementCentral.Com
