Car’s Salvage Value: What does an insurance company pay you for a car?
Provided By: CarInsurance.com
Let’s talk about car values. There are a few items of information we need to know first, such as: Has your car been "totaled" by the insurance company claims adjuster? Is it now being towed to a salvage yard because it has been rendered unusable in an accident?
The laws of most states vary somewhat, but typically there are state laws involved with “totaled” vehicles in order to keep unsafe “junk” from being driven on public highways. Part of each insurance companies procedures must follow the state statutes in order to comply in the claims process.
Generally, the definition of “totaled” means the cost of repairing the vehicle will exceed it’s “blue book” trade-in value, or a value which is the lowest possible price that a similar car can be purchased by a car dealer.
So, if your car is worth $4,695 trade in value, but the Body Shop will require $7,000 from the insurance company to repair it, then the claims adjuster will have no other choice by state law than to “total” the vehicle.
Assuming the collision portion of your auto insurance policy has a $500 deductible, you would receive from them a check for $4,195, which would be (Blue Book Value) of $4,695 minus the $500 deductible. Of course this is a hypothetical example and may be overly simplified.
Then your insurance company would, by state law, take legal possession of your vehicle, sell it to a salvage yard and have them pick up the car. They then are required to have a special state issued title, which is called a “salvage title”.
This legally indicates the status of the car, and that it is undrivable. Now, usable parts will be taken off the car, and eventually the shell and frame will be sent to the auto crusher and sold so the steel can be melted down and reused in a future manufacturing process.
There have been numerous instances when someone was in a vehicle accident, which totaled their favorite car and they wanted to buy the vehicle from the insurance company, and have it repaired at the extra cost. But, because state law is involved, the insurance company is required by law to put a “salvage title” on the car, and convey and sell your broken machine to the salvage company. The vehicle now has the burden of having the salvage title, which makes it illegal to drive the auto on a public highway.
My second car a few years ago was a sleek, teal colored T-Bird, which was a very pleasant little car to drive. It had brand new tires, the transmission and engine were kept in “like new” condition, and it was a real pain to lose it.
Unfortunately one pleasant Sunday afternoon I was driving down one of our little country two lane roads here in Florida when a person pulled out in front of me while I was doing 50 miles per hour. I skidded almost to a stop before I hit him in the driver’s side door. Gladly, no one was hurt, except the T-Bird and the other fellow’s car.
It was enough damage to the front end of the car that the cost of repair easily exceeded the total value of the car. Even though the car was repairable, I had to give it up due to the state law concerning wrecked vehicles.
My insurance company paid me for the car, about $2,000, but I would have had to pay them roughly $1,800 to purchase the vehicle. Then I would be out the $3,000 it would have taken to repair the vehicle properly, and to have it certified drivable so a proper title could be issued. So you see it is not a win-win situation when this sort of thing happens to you.
The laws vary from state to state, so if you do desire to re-purchase and repair the car, you may need the assistance of an attorney. Usually it is fairly “cut and dry” by law, so if you have a cooperative claims person at the insurance company you may be able to work out something on your own, or you may just want to move on, take your insurance claim money and go shopping for another new or used vehicle. Whatever the case, always keep your car protected by maintaining your insurance policy coverage.
One thing is for sure; nowadays it is so much easier to buy auto insurance protection than it used to be. You don’t have to travel to an office, wait for an hour, or more to be seen by an insurance agent, then spend another 30 minutes to an hour in front of the agent getting your policy. At CarInsurance.com, you just fill in the easy to understand information, select the quote and insurance company you wish to use, click on your desired payment method, and you can print your policy proof on your printer. All from the comfort, and encrypted privacy of your computer desk at home, or anywhere in the world. If you need help, you are only a toll free 800 number away from helpful, friendly agents who will work with you and write up your policy information quickly at the least possible cost. Try it out the next time you need coverage.
You are the easiest and most economical.
Michelle T.
Jacksonville, FL
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