Okay I have a question, it may be a dumb one but I’ve convinced myself my Insurance Company is trying to total my car though your article makes it seem like they can’t.
I live in Colorado (TLT of 100%), just had an accident and they inspected it today and claim around 92% loss ($9,000 in repairs) and are calling it a total loss. I’ve told them about the law but they don’t seem to understand so I just want to make it abundantly clear (at least to myself).
In the 5th Paragraph you write, “This is referred to as the Total Loss Threshold (TLT). In order to total a vehicle, the total loss ratio must exceed the established percentage.” In my mind this means they are illegally trying to total my car. Is this correct?
I love my car, I’d do anything to be able to convince them to repair it, though I can’t shell out $9k in repairs as I’m a 22 year old recent college grad working a day job.
Thanks for all of your help, now and in the future.
Could you put this more in layman’s language and in relationship to IL.
Has anyone heard of re[ purchasing the vehicle from the insurance company after they have received the “agreed” amount/value of the car?
Someone told me that they received 10k for their vehicle re-purchased the vehicle for 1K AND FOUND SOMEONE TO REPAIR THE VEHICLE FOR 4K. Now, realistically I am sure that the vehicle is not like it was but looks good and drives well.
Next, if this is possible, and would that same insurance co. insure that vehicle?????
In most states, as in IL, you should be able to retain your total-loss vehicle if (1) your leanholder approves it, if applicable and (2) your carrier is willing to “sell” you the car back. Usually you’d get paid the value of the car less its salvage value (what it can be sold for in its damaged condition). Normally, additional fees you’d get if you did not keep the car (e.g. title fees) would not be paid as you wouldn’t be incurring those fees on a new car.
It’s up to your carrier to make the decision to insure the retained vehicle. If they do, odds are you can’t put comprehensive and collision coverages back on the car since, technically, you’ve already been paid the value of the car. So you’d likely have to pay for any damage your vehicle sustains in the future if the loss was not caused by another liable party.
One suggestion – contact your local DMV branch and ask them what you’ll need to do to put an owner-retained salvage vehicle back on the road. In some states, there are numerous “hoops” to jump through which make it nearly impossible to get the car re-titled and back on the road.
In Illinois, insurers are prohibited from selling the salvage of a “total loss” vehicle back to the owner. I have a client with a situation involving a vehicle that they wish to retain and repair, but only if it can be done legally. This cannot be the first time this situation has ever arisen. Is there a practical approach to accomplish this?
“In Illinois, insurers are prohibited from selling the salvage of a “total loss” vehicle back to the owner.”
I don’t believe that’s true. Contact your local DMV branch and ask them what you’ll need to do to put an owner-retained salvage vehicle back on the road.
Actually, this is what I was told by the Secretary of State, the state police, and the insurance company. The state police told me that there are shops that can do the repair, obtain the salvage title, and then turn around and sell the vehicle.
I hate to jump into the fray, but maybe you guys are talking past one another. I am trying to buy a car in CA and looking on Craigslist. A large percentage of cars, even newer cars, have salvage titles even though they seem to be in great condition.
I just read an article in Edmunds.com Phillip Reed “Confessions of an Auto Claims Adjuster” that says:
When Your Car Is “Totaled”
If the repairs to your vehicle were less than 50 percent of the car’s value, we fixed it. (Note: This percentage varies by state.) But what if the customer had a car that was worth less? If they went to sell it and the buyer found it was in an accident, they would reduce their offer or refuse to buy it. This is called “diminished value” and the insurance company won’t pay for this loss of value.
So if you are close to the 50 percent threshold, you can argue with the adjuster to just “total it out.” That way, you get a check that you can put toward the purchase of your next car, rather than getting your old car back.
Tell the adjuster, “There might be some hidden damage to the car that you didn’t find. It could have damage to the unibody frame or the rails or maybe something is going to go wrong with the air-conditioning. Therefore, can you please total out the car?” Sometimes, this will persuade them since they know you’re right.
So people are asking to have their car totaled and having them total at near 50% of value. So if you want to go to court to fight to keep your damaged car or get more money, maybe you can win. But it looks like the reality is that insurance companies are going to take short cuts and try to get you to quickly settle for less money (what a surprise). I read this article to find out if I should worry about buying a car with a salvage title. Should I? They are so much cheaper! So is it that these cars are generally fine and the insurance companies are just running them through the mill, or is it that major damage has been found and you just can’t see it.
From a contrasting perspective, while many of these practices are very similar in other countries, there are some philosophies gaining ground that look softer and numbers and harder at customer satisfaction/retention.
The article’s analogy of the Toyota Echo being worth $2800.00 for example; some insurance companies are willing to repair as high as 150% ACV in foreign markets for a couple reasons that aren’t traditionally considered within standard TLF practices. Firstly, and statistically, when a person’s car is written off, they are more likely to hunt around for better insurance rates when they purchase the replacement vehicle, thereby creating a situation where the insurance company might lose a long term policy holder. The small investment into a cosmetic repair, which just happens to be a little expensive, is therefore a good investment from the insurer’s perspective since upon completion, it’s business as usual. If the insurance company pays out $3500.00 to have the vehicle repaired, realistically, how many monthly payments will cover the added cost? There’s a good chance this long term customer has long since covered the cost already. Additionally, is the loss in revenue for a policy holder who leaves in favour of a competitor more or less expensive than putting out an additional $1000 to have their car fixed? If the repair is cosmetic in nature, this starts to look more and more like a business decision than an open/shut formula, does it not?
We can all remember vehicles which were very clean and rightfully should have been fixed versus heavily abused vehicles that warrant no special consideration.
It’s good for the customer to have their vehicle repaired if they have fully paid off that vehicle and are no longer making payments. Replacement means potentially taking on monthly payments, new vehicle history to contend with and more down time in getting that vehicle registered for the road. Ultimately, the customer will let you know their preference. That’s not to say we start fixing cars into 300-400% ACV just because it would be nice. The customer’s perspective is just one of three. The insurer and repairer need to weigh in before this option is even viable. Loss ratio and responsible repair ability will always come first and not necessarily in that order.
For the purpose of analogy; if my dog is sick, it’s better to spend a large sum of money to have surgery performed to save its life versus buying a new puppy which will need a cocktail of expensive shots and medical examinations before my life returns to normal. Though new puppies are joyous things, I also like the dog I have. My life and routine with her are well established.
If the customer (in a moment of indecision) foolishly purchases a newer vehicle let’s say, this could strain their finances as they now have to work monthly car payments into their household budget. The memory of having their vehicle totaled is therefore not a pleasant one because it can be pinpointed as the moment when things in their life became harder. This is a negative association in the mind of the customer with respect to the brand of both the insurance company and repair shop, even though the repair shop may have done nothing but host the dealing grounds.
On the other hand, if their vehicle was repaired (with the interests of safety in priority) they can carry on with their life as if nothing happened. Repairer’s themselves (as long as their comfortable standing behind the repair plan) benefit from this, since totaling a vehicle isn’t the ideal proposition for their business model and the insurer has greater assurances of retaining the policy holder.
In this scenario, all parties win – with one very important thing in mind, this is a “business decision” that only works if no party has doubts that the vehicle can be safely repaired.
If we need a headlight, bumper cover and fender panel to repair the vehicle; collectively, those parts are largely cosmetic and therefore exceeding a traditional ACV formula is not indicative of an increasing liability or damage severity. If we’re sectioning a frame rail on the other hand, we’re now entering the realm of structural repair and it’s time to start considering more traditional total loss options.
In essence, this philosophy considers some intangible reasons the ACV is higher for Insurer’s, repairer’s and policy holders alike; and only works in instances where the safe repair ability of the vehicle is not jeopardized by the decision to repair.
However, don’t be a fool and get sucked into a bad situation for small gains. Litigation is always a concern and so it would be wise to keep record of a transparent and ethically professional thought process which arrives at a decision to repair that is safe, mutually accepted and most importantly, legal.
It’s been over a month since I settled with my insurance company and bought back my SUV which was declared a total loss from the insurance company and the insurance company has still not notified MVA even after I have fixed the car and obtained a MD state inspection.
I know The insurer is obligated to notify the MVA that the vehicle has been declared salvage and that the owner is retaining possession of the vehicle.
Do I have a case?
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Okay I have a question, it may be a dumb one but I’ve convinced myself my Insurance Company is trying to total my car though your article makes it seem like they can’t.
I live in Colorado (TLT of 100%), just had an accident and they inspected it today and claim around 92% loss ($9,000 in repairs) and are calling it a total loss. I’ve told them about the law but they don’t seem to understand so I just want to make it abundantly clear (at least to myself).
In the 5th Paragraph you write, “This is referred to as the Total Loss Threshold (TLT). In order to total a vehicle, the total loss ratio must exceed the established percentage.” In my mind this means they are illegally trying to total my car. Is this correct?
I love my car, I’d do anything to be able to convince them to repair it, though I can’t shell out $9k in repairs as I’m a 22 year old recent college grad working a day job.
Thanks for all of your help, now and in the future.
Sincerely,
Sean
re: Kevin’s comment 3/2014
Could you put this more in layman’s language and in relationship to IL.
Has anyone heard of re[ purchasing the vehicle from the insurance company after they have received the “agreed” amount/value of the car?
Someone told me that they received 10k for their vehicle re-purchased the vehicle for 1K AND FOUND SOMEONE TO REPAIR THE VEHICLE FOR 4K. Now, realistically I am sure that the vehicle is not like it was but looks good and drives well.
Next, if this is possible, and would that same insurance co. insure that vehicle?????
In most states, as in IL, you should be able to retain your total-loss vehicle if (1) your leanholder approves it, if applicable and (2) your carrier is willing to “sell” you the car back. Usually you’d get paid the value of the car less its salvage value (what it can be sold for in its damaged condition). Normally, additional fees you’d get if you did not keep the car (e.g. title fees) would not be paid as you wouldn’t be incurring those fees on a new car.
It’s up to your carrier to make the decision to insure the retained vehicle. If they do, odds are you can’t put comprehensive and collision coverages back on the car since, technically, you’ve already been paid the value of the car. So you’d likely have to pay for any damage your vehicle sustains in the future if the loss was not caused by another liable party.
One suggestion – contact your local DMV branch and ask them what you’ll need to do to put an owner-retained salvage vehicle back on the road. In some states, there are numerous “hoops” to jump through which make it nearly impossible to get the car re-titled and back on the road.
Thanks for finally talking about >When is A Vehicle Considered a Total Loss?
<Liked it!
I Google Searched This
WHEN IS A NEW CAR CONSIDERED TOTALLED?
Re: New Car Topics Only.
Incredible points. Outstanding arguments. Keep up the amazing spirit.
In Illinois, insurers are prohibited from selling the salvage of a “total loss” vehicle back to the owner. I have a client with a situation involving a vehicle that they wish to retain and repair, but only if it can be done legally. This cannot be the first time this situation has ever arisen. Is there a practical approach to accomplish this?
“In Illinois, insurers are prohibited from selling the salvage of a “total loss” vehicle back to the owner.”
I don’t believe that’s true. Contact your local DMV branch and ask them what you’ll need to do to put an owner-retained salvage vehicle back on the road.
Actually, this is what I was told by the Secretary of State, the state police, and the insurance company. The state police told me that there are shops that can do the repair, obtain the salvage title, and then turn around and sell the vehicle.
I hate to jump into the fray, but maybe you guys are talking past one another. I am trying to buy a car in CA and looking on Craigslist. A large percentage of cars, even newer cars, have salvage titles even though they seem to be in great condition.
I just read an article in Edmunds.com Phillip Reed “Confessions of an Auto Claims Adjuster” that says:
When Your Car Is “Totaled”
If the repairs to your vehicle were less than 50 percent of the car’s value, we fixed it. (Note: This percentage varies by state.) But what if the customer had a car that was worth less? If they went to sell it and the buyer found it was in an accident, they would reduce their offer or refuse to buy it. This is called “diminished value” and the insurance company won’t pay for this loss of value.
So if you are close to the 50 percent threshold, you can argue with the adjuster to just “total it out.” That way, you get a check that you can put toward the purchase of your next car, rather than getting your old car back.
Tell the adjuster, “There might be some hidden damage to the car that you didn’t find. It could have damage to the unibody frame or the rails or maybe something is going to go wrong with the air-conditioning. Therefore, can you please total out the car?” Sometimes, this will persuade them since they know you’re right.
So people are asking to have their car totaled and having them total at near 50% of value. So if you want to go to court to fight to keep your damaged car or get more money, maybe you can win. But it looks like the reality is that insurance companies are going to take short cuts and try to get you to quickly settle for less money (what a surprise). I read this article to find out if I should worry about buying a car with a salvage title. Should I? They are so much cheaper! So is it that these cars are generally fine and the insurance companies are just running them through the mill, or is it that major damage has been found and you just can’t see it.
From a contrasting perspective, while many of these practices are very similar in other countries, there are some philosophies gaining ground that look softer and numbers and harder at customer satisfaction/retention.
The article’s analogy of the Toyota Echo being worth $2800.00 for example; some insurance companies are willing to repair as high as 150% ACV in foreign markets for a couple reasons that aren’t traditionally considered within standard TLF practices. Firstly, and statistically, when a person’s car is written off, they are more likely to hunt around for better insurance rates when they purchase the replacement vehicle, thereby creating a situation where the insurance company might lose a long term policy holder. The small investment into a cosmetic repair, which just happens to be a little expensive, is therefore a good investment from the insurer’s perspective since upon completion, it’s business as usual. If the insurance company pays out $3500.00 to have the vehicle repaired, realistically, how many monthly payments will cover the added cost? There’s a good chance this long term customer has long since covered the cost already. Additionally, is the loss in revenue for a policy holder who leaves in favour of a competitor more or less expensive than putting out an additional $1000 to have their car fixed? If the repair is cosmetic in nature, this starts to look more and more like a business decision than an open/shut formula, does it not?
We can all remember vehicles which were very clean and rightfully should have been fixed versus heavily abused vehicles that warrant no special consideration.
It’s good for the customer to have their vehicle repaired if they have fully paid off that vehicle and are no longer making payments. Replacement means potentially taking on monthly payments, new vehicle history to contend with and more down time in getting that vehicle registered for the road. Ultimately, the customer will let you know their preference. That’s not to say we start fixing cars into 300-400% ACV just because it would be nice. The customer’s perspective is just one of three. The insurer and repairer need to weigh in before this option is even viable. Loss ratio and responsible repair ability will always come first and not necessarily in that order.
For the purpose of analogy; if my dog is sick, it’s better to spend a large sum of money to have surgery performed to save its life versus buying a new puppy which will need a cocktail of expensive shots and medical examinations before my life returns to normal. Though new puppies are joyous things, I also like the dog I have. My life and routine with her are well established.
If the customer (in a moment of indecision) foolishly purchases a newer vehicle let’s say, this could strain their finances as they now have to work monthly car payments into their household budget. The memory of having their vehicle totaled is therefore not a pleasant one because it can be pinpointed as the moment when things in their life became harder. This is a negative association in the mind of the customer with respect to the brand of both the insurance company and repair shop, even though the repair shop may have done nothing but host the dealing grounds.
On the other hand, if their vehicle was repaired (with the interests of safety in priority) they can carry on with their life as if nothing happened. Repairer’s themselves (as long as their comfortable standing behind the repair plan) benefit from this, since totaling a vehicle isn’t the ideal proposition for their business model and the insurer has greater assurances of retaining the policy holder.
In this scenario, all parties win – with one very important thing in mind, this is a “business decision” that only works if no party has doubts that the vehicle can be safely repaired.
If we need a headlight, bumper cover and fender panel to repair the vehicle; collectively, those parts are largely cosmetic and therefore exceeding a traditional ACV formula is not indicative of an increasing liability or damage severity. If we’re sectioning a frame rail on the other hand, we’re now entering the realm of structural repair and it’s time to start considering more traditional total loss options.
In essence, this philosophy considers some intangible reasons the ACV is higher for Insurer’s, repairer’s and policy holders alike; and only works in instances where the safe repair ability of the vehicle is not jeopardized by the decision to repair.
However, don’t be a fool and get sucked into a bad situation for small gains. Litigation is always a concern and so it would be wise to keep record of a transparent and ethically professional thought process which arrives at a decision to repair that is safe, mutually accepted and most importantly, legal.
My car was not in accident,but my car to get fixed cost more than the actual car, can I get my car declared totaled?
It’s been over a month since I settled with my insurance company and bought back my SUV which was declared a total loss from the insurance company and the insurance company has still not notified MVA even after I have fixed the car and obtained a MD state inspection.
I know The insurer is obligated to notify the MVA that the vehicle has been declared salvage and that the owner is retaining possession of the vehicle.
Do I have a case?