Insurance is totaling car. How to determine value?

[Nic Sanchez]

Due to a water damage claim on my car, my insurance is telling me that they are "Totaling" my car.

How is the pay off value of the car determined? Is it based on Blue book value or the purchase prices of similar cars in the area?

Any suggestions or comments would be greatly appreciated.


Thanks,
Nic

[Pete Loney]

State farm uses a system of total replacement costs.
Current retail prices of similar cars in the area(west Coast), around 5-8 of them.
Mileage, factory options on the car, time left on your state registration, state sales tax. Add it all up.

[Craig Naylor]

AAA last spring used some "service" to determine the value of our car. Company claimed 200+ same vehicles in their "database" for which they determined a car in "excellent" condition as they found ours to be (upon personal live inspection) was worth 1/2 of Blue book value.

I objected to this, fought for a month, and had them do a third party evaluation. That started a 5 month battle, where we finally walked away with only 75% of over 15 examples of cars I felt were in worse condition than ours, but were the best I could find.

The next step required us to front 1/2 of the $1k arbitration fee, non refundable no matter the outcome, plus a requirement that we use a company approved by the arbitrator on our side, AAA had to stand on their existing number and report. We decided after a few bids of our own "professional" third party report $700, and the $500 arbitration cost, at best we walked away with $200 extra (minus costs). So we folded our hand in disgust! Bought the car back, sold it our selves, and got ~$200 less than we should have in the first place.

[Jesus Saucedo]

It's a sad practice, really. I worked in the auto insurance field for 10 years. Fighing fraud in the claims department.

Pretty much what Pete said, sums it up. Of the insurance companies I've dealt with, in my profession in claims, none actually use the Blue Book method. Most use a third party company that, like mentioned already, searches the database for "comparables" in your area. They take the average of all those cars, calculate for things such as mileage, condition, any MAJOR costs recently completed (like engine overhauls, which net you not much more anyway).

You didn't mention what car was being totaled. This can make a small difference in how you go about it. For example: I have a CRX. HIGHLY modded, the present value would be in the $4k range. The insurance people would look at "comparables" and see the value at roughly 2k. Blue Book would likely list it at about 1,500, if I'm lucky. I'd have to really fight it, much like Craig did, and it would be extremely tough for me to get that full $4k value. In fact, I've NEVER seen it done. Personally, I haven't had to deal with all that nonsense myself. But yeah, I've never seen anyone actually take it to arbitration. And I've looked at nearly 10s of thousands of claims. Craig's would be the first example.

I was helping my friend fight the two insurance companies involved (his own, as well as the other guy's). He too had a CRX. He gave up the fight, so I don't know what the outcome would have been. I sent him on a path to collect receipts, price quotes for all the body parts he added (JDM), the engine swap in the car, brake upgrades, etc. I also had him scour the sale ads for similar cars. In his particular case, I was counting on the State's own laws to make him whole again. Summing that one part up: They (insurance) has to make him (his car) to pre-accident condition.

I'm not sure what was the case for Craig. But, I'm sure it's a very VERY difficult task to actually get the actual value of a car (excluding sentimental).

[Nic Sanchez]

I've been going back and forth with the insurance company. I'm trying to exercise my option of buying back the car but they are telling me that because it has water damage that they normally don't allow this. Is this normal?


Nic

[Jesus Saucedo]

Nic,

I haven't dealt with any water damaged cars, but don't see what the issue would be. Perhaps someone there has an interest in your car? I have never seen the ins company NOT offer the car back.

[Jesus Saucedo]

Nic,

I haven't dealt with any water damaged cars, but don't see what the issue would be. Perhaps someone there has an interest in your car? I have never seen the ins company NOT offer the car back.

[Tom Berry]

I've been going back and forth with the insurance company. I'm trying to exercise my option of buying back the car but they are telling me that because it has water damage that they normally don't allow this. Is this normal?


Nic

Yes.. this is normal for water damaged cars... and theft cars.