<p>My DD was in an auto accident. Thankfully, no one was hurt, but the insurance company determined that her car was a total loss. The puzzling part is that the insurance company sent her a check for $4000 MORE than the repair estimate. The car was in very good condition, but we don’t think she could have sold the car for the amount that the insurance company gave her. Why wouldn’t they just pay the repair bill, which would have been cheaper for them?</p>
<p>This all took place a few weeks ago, and DD has already purchased a replacement vehicle. No one that we have talked to can explain the disparity in the numbers, so we are still puzzled. Any ideas?</p>
<p>The way I understand it, if the car was declared totaled that means that something happened that made it unsafe, i.e. the frame was bent or the the cost of repairing the car was more then it’s re-sale value. In that event they give you the blue book cost of the car based on it’s condition, age and mileage. You could have repaired the car and pocketed the difference.</p>
<p>We just went through this with our kid’s car.</p>
<p>If the repair estimate is more than certain percentage of the car’s value (usually around 70%), or (as kathiep points out) if the car would not be safe to drive, the insurance company will declare the car a total loss. In your case, the car was likely worth about $13,000 and the repair estimate more than about $9,000.</p>
<p>By declaring the car a total loss, the insurance company avoids any possible cost overruns that might occur if they agree to repair the car, and they own the damaged car for a set price. The damaged car is then auctioned off.</p>
<p>In my case, I felt that the amount the insurance company wanted to pay for my totaled car was too low. I argued that the actual replacement value was higher, and pointed out comparable sales listings in our area … and the insurance company raised their offer by nearly $1,000.</p>
<p>It would be unusual for an insurer to consider the car totalled, pay the value accordingly, and ALSO to allow the insured to keep the car. Usually, the insurer will get some salvage value for the car and will dispose of it. You’d have a problem getting a vehicle insured that has been considered a total loss.</p>
<p>Ah, you are probably right alwaysamom. We got money for repairs once, decided to do the repairs ourselves and kept the money. But you’re right if it was actually declared totaled, that is probably a different story.</p>
<p>When my son’s clunker was clunked from behind, the insurance company offered us $3k and they would take the car, or $2500 and we would keep the car. The car was a bit smashed in at the rear, but still drivable, so we kept the car and kid drove it for another year.</p>
<p>kathiep and sedluhs, now it makes sense and your numbers are about right. Even so, I can’t find a similar car within 500 miles for anywhere near the price they offered DD, with no negotiation. Once DD heard it may be a total loss, she did lots of research on the value of her car, as she thought she might have to negotiate with the insurance company. Once they made the offer, DH told her to get the offer in writing and take the money and run! I wouldn’t recommend being involved in an accident, but DD really ended up making out on this. Took the offer, bought a new car with super low financing, new grad rebate, and DH has a relationship with the dealer. Insurance went up just $2/month.</p>
<p>my moms car ( an old Volvo) was declared totaled because repairs were more than blue book- not because undriveable.
She was issued a new vin# & kept the car.</p>
<p>cincy gal, Did you look here? [Official</a> Kelley Blue Book Values You Can Trust From kbb.com - Kelley Blue Book](<a href=“http://www.kbb.com/]Official”>http://www.kbb.com/) This is the bible for used car values.</p>
<p>An insurance company (one of which insured the woman who ran into me) can declare a car that was previously in excellent condition a total loss, purchase the car from the owner for the settlement amount (after negotiating for 30 days, calling at all hours and yelling at the owner), and trick the owner into signing a document stating that the car was not totalled. Then it can repair it and sell the car at auction without disclosing that it had ever been wrecked. This happened to me, and I could do nothing to stop it even though I’m a lawyer–and let me just tell you, it did not leave me in a better state.</p>
<p>In your case, it sounds as though you either have an honest insurance company, or one that made a mistake.</p>
<p>A car that is totaled can still be driven but that car will carry a “salvage title”. There is nothing wrong or illegal about driving such a car but insurance companies will not provide comprehensive coverage on a salvage title car…just liability.
Neighbors kid wrecked their old dinosaur of a Ford Taurus. It was declared a total loss. They collected the insurance $ and the D continued to drive it. They didn’t care that they couldn’t get comprehensive insurance on it since it wasn’t worth much at that point anyhow.</p>
<p>Insurance companies don’t pay replacement value. They pay depreciated value. It doesn’t matter that you can’t find a replacement for that price. Most people have to shell out more to replace the car that’s been totalled.</p>
<p>In our state salvage titles only apply to cars that are 7 model years old or newer. We have a 10 year old car that was my mom’s, has only 60,000 miles and is in excellent condition.</p>
<p>A huge buck tried to jump over it while I was driving back in November. It landed on the windshield smashing it and significantly denting the roof. The repair estimate was $4200. The Kelley value I came up with was $4800. State Farm totalled it. They gave its value as $5400, subtracted $800 for salvage value and gave us $4600. We got it repaired for $3750 choosing not to repair a few cosmetic things. I replaced the side view mirror which had been snapped off.</p>
<p>If the insurance company repairs it they need to make you “whole”, repairing everything. The repair estimate also came with the caveat that more damage could be found once they got the roof out. The insurance company didn’t want to assume that risk.</p>
<p>So we still have our great car with no resultant insurance issues. No way I could have replaced it for $4600 or $4800.</p>
<p>Chedva, I think the OP’s point was the insurance company gave them more than similiar cars are selling for.</p>
<p>Exactly (at least in California). Neighbor had an old, small pickup which was broadsided by someone backing out a driveway. While the damage wasn’t extensive – frame not bent – due to the age of the truck (15+ years), the hitter’s insurance company ‘totaled’ it and sent my neighbor a check. He found a local shop to fix/patch the body work and has an fully functional truck, albeit with a ‘salvage’ title.</p>
<p>much like katiep, my experience has been if a car is believed to be damaged 75% or more of its current value, and insurance company deems it unsafe then they call it totaled. They then pay what they consider to be the value of the car. The amount they pay is actually an offer(not everybody knows that) for the value. If a car owner thinks the offer too low, it can be negitiated with the insurance company, though that isn’t the case with the Op. In the past, I bought back a totaled car from insurer for a couple hundred bucks. Then I had the car and the money.</p>
<p>DD totaled our 1998 Mercedes MLB a couple of years ago. The damage was not that bad, but everything on a Mercedes is so expensive, that the cost to fix it was more than 80% of what it was worth (but less than what it was worth). We had a friend who is a car guy look at it and he said the damage was primarily cosmetic and would be safe to drive after repairs. We decided, since the car had been given to us for free from my dad, to take the money (which was a little less than if they had kept the car) and have it fixed. We are in California, and we had to get a Salvage title, which meant a couple of trips to the DMV (always got a different answer on what exactly was required) and new plates. The insurance company had no problem insuring it.</p>
<p>I kept my old Volvo also when I was hit a few years ago. The insurance company totaled it and let me keep the car. I used the proceeds to repair and drove it another 80,000 miles.</p>
<p>OP here. Yes, DD checked Kelly Blue Book, NADA and Edmunds. None had values as high as the insurance offer. DD had turn sign over the title to get the check. although she wasn’t planning to replace her car anytime soon, she is very happy with her purchase!</p>