Auto Insurance Claims - Totaled older car; police ticket not admissible evidence

Question:
My daughter was driving her auto in a college parking lot and was struck by another vehicle damaging her auto. Nobody was hurt but the damage to her car was extensive. The driver of the other vehicle admitted fault and both the college police as well as the local city police responded. The city police issues a citation to the other driver failure to yield the right of way. My daughter is not covering collision insurance on the vehicle due to the age of the vehicle, however the auto is worth fixing as it is a reliable automobile. Is the other drivers property insurance liable to fix the damages to my daughters auto since the citation stated fault on the other party? Thanks for your response.

Answer:

Totaled older car
Repair with non-OEM parts
Repair with used parts
Salvage totaled vehicle
Higher actual cash value research
Ticket does not prove negligence
Police ticket not admissible evidence
Issued ticket fight comparative negligence
No comparative negligence


Dear Clients,

Yes, the other driver has an obligation to repair your daughter's car. If he has insurance, then you can make them pay. Just make that claim with them, and if there is any problem, contact your State Insurance Commissioner http://www.settlementcentral.com/links.php. Don't be afraid to make a complaint should the insurance adjuster give her any problem.

Here is one thing I think could cause you a problem, based upon what you told me:
"the damage to her car was extensive. My daughter is not covering collision insurance on the vehicle due to the age of the vehicle; however the auto is worth fixing as it is a reliable automobile."

So you have an older vehicle that has extensive damage. I am going to bet it will be totaled, not repaired. If the car is not worth insuring, then you may find that the repair costs are above 70% of the value and the adjuster will want to total it instead of repairing it. We see this all the time with older vehicles. Guess what? Your daughter will never get enough money from having her car totaled to buy any kind of reliable transportation.

Thus, just in case this turns out to be the case, I am going to give you some extra information on how to deal with this problem.



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 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 DAUGHTER'S 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 daughter's 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.

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? Will you have to incur a loan payment to get adequate transportation? What if you put a lot of money into repairs and new parts in the past 18 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.

So, rather than taking the low offer of cash and trying to find a vehicle that will be reliable, they put the money into fixing the wreck with used parts, leaving aside cosmetic damage (who cares if your daughter drives a nine 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, and if you have put a lot of money into maintenance or repair, as you have, 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 40% 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.


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 car at $5,000, but the insurance adjuster, after considering the latest documentation you have to offer, values it at only $2,800. Don't forget, that is her value BEFORE THE ACCIDENT.

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, which the adjuster already told you was only $2,800. 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 $700. 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 $1,400.

Plus, once the car is repaired, you will have to take it 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. 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.

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 $2,800 in this case. Then you have to buy back the car from the insurance company, which in this case will be the $700 salvage.

You will have the auto body company authorized to repair with USED and/or NON-OEM PARTS, which in this case, will bring the cost of $1,300 (thus, for state licensing fees, the "value" of the car to you is what you paid, or $2,000: $700 plus $1,300). To that you will add the cost of inspection ($100) and re-licensing (say 8% sales tax times the salvage buy-back price of $2,000, equals $160).

In summary, you got $2,800 cash for the car, and you paid out $700 plus $1,300 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 $700 plus the $1,300 plus the $100 plus the $160, for a grand total of $2,260. So your daughter comes out with a repaired and re-titled car and $540 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 we expect they will make to your daughter.

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 have used a computer scan of sales that were at the trade-in value, NOT the actual cash value.

If you have made major item replacements, above and beyond normal maintenance, 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 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

That should be more than enough information to help your daughter retain her vehicle.

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.