My car was burned and

Posted: Wed Aug 01, 2007 03:11 am Post Subject:

If they keep it or not is a tough situation but IMHO your better off letting them take the vehicle (why would you want it). Your lien holder really has the right to tell the insurance company they can have the vehicle or not. If the insurance company does not get the vehicle two things will happen. They will probably require who ever has the vehicle to protect and maintain it in it's current condition (pending the possible pursuit of recovery from the manufacture)... but even in this case, they still really have a right to the vehicle (as your insurance contract requires that you preserve their right of recovery and you really don't have the means to legally preserve the vehicle. Second, if you or the lien holder kept the vehicle, your insurance company would deduct it's salvage value from their offer _to the lien holder_. This means the lien holder would get less money... which they won't go for and unless you want to keep paying your payments on the vehicle, they could simply paper repo the vehicle and do with it what _they_ want. You may still need to settle with your lien holder as $4k is a lot of money and I don't think they will simply walk away from it.

Also, review the insurance companies offer and the figures that used to arrive at the value of the vehicle. Many times they will omit options on the vehicle that will increase it's value (I recently saw an appraiser over look a moon roof and navigation system on a vehicle... yeah, tough to spot a big hole in the roof and a TV screen in the dash). If there was prior damage being deducted from the value, they should not simply deduct the full repair cost.

Lastly, as you are will probably be looking for another vehicle, $4k is a lot of money to be up side down on a vehicle. I'm guessing your finances are not that great (this is understandable). But you still want to avoid going from bad to worst. Your lien holder may offer to roll over that $4k into another loan. I'd seriously look to avoid this... as your going to be even _further_ in the hole and it will be a long battle just to get back to the deep hole you were in.

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Posted: Wed Aug 01, 2007 06:51 am Post Subject:

Hi Makenzie,

The insurance company will declare the car ‘total', if the cost of fixing it exceeds its market value. Otherwise, they will simply pay off the damages. But you cannot consider it ‘totaled' until you receive the estimates.
If the car really gets ‘totaled' then you probably can't make a better deal by keeping it.

Posted: Wed Aug 01, 2007 02:39 pm Post Subject:

Just a note... an insurance company will usually consider a vehicle a total loss, even though the cost to repair is _less_ then market value, usually at 80% of it's market value. Some states require this but even if they don't, with that much damage their is usually going to be supplemental damage that would make the cost of repairs exceed the market value.

Posted: Wed Aug 01, 2007 03:51 pm Post Subject: Burned Car

I want the car so that I can salvage it and put it towards my balance! If they are not paying it off how can they take the title? If they do salvage it shouldn't that money go towards my balance? Also my insurance company is using NADA to get the value of my car. NADA is the lowest estimate out of all the other estimators that I have checked? Shouldn't they give me an average and not the lowest? I cant even replace my vehichle for the same exact car for what they are offering me??

Posted: Wed Aug 01, 2007 07:41 pm Post Subject:

Your insurance company is paying the value of the vehicle in it's _pre-accident_ condition. Or to look at it another way, they are buying the vehicle from you at its market value, prior to the accident. As such, they are entitled to the vehicle.

As I mentioned, you would be entitled to keep the vehicle and title (they would then offer less, their initial offer less salvage value) but you don't _own_ the vehicle... your lien holder does. I also mentioned that you _might_ legally be able to keep the vehicle as long as you continue to make your monthly payments to your lien holder but again, the insurance companies new offer would be less the salvage value so you'd not gain anything. Also, your lien holder could/would simply perform a "paper repo", take possession of the vehicle and allow the insurance company to take possession of it. So this really is not a possibility you should look into.

You are looking at one aspect incorrectly... the payoff amount has nothing to do with the insurance company. That contract is between you and your lien holder. The insurance company is responsible only for paying the vehicles value. Look at it this way... if you only owed $10 on the vehicle, would you expect your carrier to only pay $10?

You mention that NADA is the lowest (market) value. Different companies use different data and update it at different times of the year. Bottom line, this does not make NADA incorrect... just the lowest. But there is a BIG problem if they are using just NADA! Take a look at the options the NADA site (nada.com) allowed for. Compare it to the options on your vehicle. Does NADA account for _all_ the options on your vehicle? I know 9 times out of 10 that it does not allow for them all. There is certainly also an issue if the insurance company included all the (correct) options. You _really_ need to check this information! See my prior post for examples. You can also uses other online services (edmonds.com and kbb.com) in order to obtain additional values on your vehicle. As you mentioned, submit this information to the adjuster and ask them to consider those values (most carriers that use NADA, simply take an average of several services). In the same view that NADA is still correct, it makes much more sense to consider an average. Feel free to mention to the adjuster that while NADA might be somewhat correct, certainly an average of 3 different sources would be even more correct. You can also mention that NADA only updates their figures a few times each year so their figures might actually be very old. Also ask the adjuster if he/she knows how many vehicles were used as a comparison and where NADA got their information. If she/he does not know, do they really want to rely _solely_ on this information?

Can you replace your vehicle for what they are offering? Probably not... but I suspect this is because of your financial status at the time you bought the vehicle (no offense). Anyone can be sold a vehicle but many times the deal is one of the worst. This does not stop many people from buying the vehicle, though. If your prior deal allowed you to make payments and _still_ be $4k up side down in the deal, I'd strongly recommend you consider other options. Perhaps a lesser vehicle, having someone else co-sign for you, save up and put more down, etc. I don't know the whole story and I'm not trying to beat you up. I also understand that we all are just trying to get by.

Posted: Thu Aug 09, 2007 04:29 pm Post Subject: gap insurance

next time you buy a car, buy gap insurance, its there for you when your upside down...