by Guest » Sun Oct 02, 2011 12:36 am
I'm completely upset at the decision that my car was deemed total loss. I don't understand how that can be so when the damages would cost almost $5,000 & the actual value of the car is $8,000. I need to keep my car but don't have the slightest idea how to do so. Is there a way I can go through my own insurance to appraise the vehicle? Do I need to take this to an attorney? I'm still paying on this car and there is no way I can just get another.
Posted: Sun Oct 02, 2011 04:57 am Post Subject:
I don't understand how that can be so when the damages would cost almost $5,000 & the actual value of the car is $8,000.
It's because the car currently has value, even in its current wrecked condition.
There are four numbers needed to make this determination. You can request these numbers from the insurance company and they are:
(1) Fair market value of your vehicle the second before it was hit;
(2) The value of your vehicle now that it has been hit, which I believe is called the salvage value;
(3) The estimated cost to repair your vehicle;
(4) The diminished value of your repaired value. The diminished value is the amount of value your car would lose due to being wrecked and then fixed.
In general, if the estimated cost to repair your vehicle plus the current salvage value plus the diminished value is greater than the pre-accident fair market value, then they won't repair it.
In your case, it sounds like the pre-accident fair market value is $8,000 and the estimated repairs are $5,000. If the diminished value is, say, $400, then that means if they can get $2,600 or more for your vehicle in the current condition, they won't repair it.
If you don't like their decision, then you can always opt to keep the vehicle and get it repaired at your own expense. Then they should pay you the pre-accident fair market value of the car MINUS the salvage value of the car.
Either way, you may have to come up with cash either for repairs or to pay off the balance of your loan.
In the future, you can avoid this by purchasing gap insurance on a vehicle when financing it.
Good luck to you.
Posted: Fri Oct 07, 2011 01:33 am Post Subject:
What exactly is gap insurance? I have full coverage insurance but I'm going through the other driver's carrier because they were at fault. Do you think I would get a better outcome if I filed the claim with my carrier?
I just don't see how this would benefit anyone. My car getting hit has rearranged my whole life and it seems like I'm getting the short end of the stick. The insurance has even stopped paying for the rental I was using after almost 2 weeks so now I'm currently paying that just to get around.
Posted: Sun Oct 09, 2011 08:14 am Post Subject:
What exactly is gap insurance?
I've never purchased gap insurance because I've never financed a car, but from what I understand, it covers the difference between what your car is worth and what you owe the financing company. So if you buy a brand new $20,000 car, drive it around for a few months, and then it gets totaled, it may only be worth $18,000 as a used car with 3,000 miles on it even though you might still owe $19,700 on it. The gap insurance would cover that $1,700 difference that you would otherwise be responsible to pay for yourself.
I have full coverage insurance but I'm going through the other driver's carrier because they were at fault.
Even though the other driver's carrier is on the hook to pay for everything, your insurance company should be handling everything for you since you have full coverage with them. So if I were you, I would get your insurance company on this ASAP.
My car getting hit has rearranged my whole life and it seems like I'm getting the short end of the stick.
I hear you. When my wife's car was totaled, we didn't have full coverage so I had to handle everything myself. It was such a pain. The other insurance company will drag their feet for as long as you allow them to. That's why you should get your insurance company on this. It's a little worrisome that they didn't just take the ball and run on this for you.
The insurance has even stopped paying for the rental I was using after almost 2 weeks so now I'm currently paying that just to get around.
For better or worse, it's your job to mitigate your losses. That means it's your responsibility to get a replacement vehicle EVEN IF you can't reach a settlement with the insurance company. In my opinion, that's why insurance companies drag their feet: the more desperate you become because you depend on your vehicle and don't have cash sitting around to buy a new one and rental cars are expensive, the more likely you are to accept a lower settlement.
If I were you, I'd get your insurance company on this, get the money for the value of your car, pay the financing company off, and then get another car. And if it's at all possible, buy a reliable but not so nice looking car with cash and then start saving cash for your next replacement vehicle. Financing depreciating assets such as cars is not a good long-term saving strategy.
Good luck to you.
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