QuestionI was in an accident there were no other vehicles involved. I called my insurance company they sent someone to come and look at my car and they considered the car being a total loss. I have invested a lot of money in my car it has a new transmission, wheels, rims, tv's speakers etc. I want to keep my veichle. My question is what are my options? Can the insurance pay me the value of my vehicle to me (even though I am currently making payments on my car to a bank). I can use that money to fix my car and I will pay the remaining balance. So can I keep the car and not have it towed. And if I keep the car will I get any money.
AnswerHi Evangelina,
Your situation is going to be resolved depending upon your relationship with the lender. If you have a good record of making payments, and if the actual cash value of the vehicle (if repaired with used and/or non-original equipment manufacturers (OEM) parts, THEN there is a chance to do something creative.
Otherwise, the bank is going to get their money first, and you will get what is left over. So, let's look at three options with that in mind. My guess is that in only 10% of the cases is the bank ever going to let the owner make repairs to a totaled vehicle. But I will discuss it anyway just so you can see if you want to try it.
Here is the thing that should give you the basis of arguing to the bank: your investment of a new transmission, wheels, rims, etc. will be preserved for their benefit as security on the loan if they will agree to let you make repairs with used and/or NON-OEM parts. But even then, you will have to show a good record of payments or else they will just want to get the loan paid off and hence insist upon the vehicle being totaled.
Three Ideas When 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 (i.e. new transmission 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, Evangelina. It may have higher miles, but it is in good shape. If you allow them to total it and you are forced to buy a replacement vehicle, will you have to incur a loan payment to get adequate transportation?
Maybe you have put $4,000 in repairs and new equipment in the past twelve months. You will not get that money back in cash value of the car, but the repairs may have made your vehicle desirable to continue operating.
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 an eleven 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 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 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. You should be able to demonstrate to the bank that this is also to their advantage in that they get increased value in their security, AND they get the income from your interest without having to make any new loans.
If they will go along, 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 salvage and repair, depending upon salvage price. This is almost impossible with your bank loan, but still it could be done if circumstances are just right.
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 car at $4,500, but the insurance adjuster, after considering the latest documentation you have to offer, values it at only $3,000. Don't forget, that is her value BEFORE THE ACCIDENT. Her salvage value, the amount that the insurance company expects to get when they sell your car, will be around 15% of that amount, or only $450.
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. I am guessing that the repairs quoted are $4,500. As I said, deduct 45% of that for these reduced repairs, and your repair costs will be around $2,475.
This probably will not work unless your balance on the loan is real low.
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Get maximum FMV and high percentage of payment for new parts installed
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 whatever 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. Be aware that you should pick the option "any distance" from your zip code.
The best local sources are to use information from local papers, advertising flyers, car dealerships, and the Internet. Again, use 300 miles to check online newspaper classifieds and dealer asking prices.
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.
What about getting some of that big money you spent on the car added to the value? You have to show that the work or new parts INCREASED the ACTUAL CASH VALUE (aka FMV). Normal maintenance might add a little value, but replaced parts (especially a new transmission, etc.) can make an increase in value. Just itemize each and add some value for each expenditure you made.
I would take the list to a few dealers and get the names and numbers of those who will speak with you. Have them give you a figure as to how much those wheels (and whatever else you added) will add to the value of the vehicle.
In your case, since 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 wheels 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 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
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#7. 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 maximum insurance settlements.
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
