Hi there, and thanks for taking my question.
I was involved in an automobile accident last week. I was hit from behind on the highway by a driver who just wasn’t paying attention. My car ended up being totaled out.
His insurance (Travelers) claimed 100% liability for the accident. I have been checked out…
Travelers does not owe you the replacement cost of your vehicle. They do not owe you the cost of a comparable vehicle.
They owe you the fair market value of the actual car that was damaged just before the accident. That means – what you reasonably could have sold that car for given it’s age, condition, mileage, options.
They will not pay you 11,000 for a car you only could have sold for 8700.
Although I don’t know much about your car – their offer seems to be in line.
Sorry, the insurance company is only responsible to pay you the Actual Cash Value of your vehicle which as you now know is Replacement less depreciation. They are not obligated to replace your vehicle.
You could try to go against your own collision coverage, but your insurer will only offer you the ACV.
In most states, you can dispute the settlement by filing arbitration. An arbitrator will decide what is fair and reasonable.
If you feel the ACV is not enough, you need to do some homework, and prove that the value of your vehicle exceeds $8,697.
You could also file a complaint with your state’s Insurance Commissioner, but again, Travelers only has to pay you the ACV.
Find out how the arrived at the ACV. If they used a company like CCC, you should be able to find a similar vehicle for the settlement amount. CCC provides back up information on how they arrived at the ACV
You can make a counter offer once you have a deal made for a replacement vehicle. Shop for a car. Make your best deal. Call the insurance company with a copy of the offer. Tell them that you would like to put this all behind you and you feel that the counter offer is the reasonable replacement cost for your geographic area. Consider that the title and tax are part of replacing the vehicle and not just the cost of the vehicle itself. Use that information to up the insurance company’s pay out. Stress that you are only looking for a fair settlement.
You’ll come out even as long as the new car is $11,697 (drive out). Always negotiate the “drive out” price. That’s the after taxes and title cost. Do not negotiate the monthly cost because they can lengthen the term of the loan to meet that. Do not be afraid to walk away from a deal. 9 out of 10 times, they’ll come after you if it’s close to what they need. Don’t be afraid to bargain them down to the price that the vehicle is worth to you. Be fair. Go in with information. Bring your laptop if you have one so that you can check NADA or Kelly Blue Book Retail Value. Drive the car to AutoZone and have them pull the last codes on the car. It’s a good place to test drive. The notebook will come in handy for the location of the nearest auto zone.
If you make the best deal you can for the new car and work with the insurance company to get what you need, you should be ok.
I’m sorry to have to tell you that the balance you owe over the fair market value of the car is not the responsibility of the insurance company. It isn’t their fault you owe more than your car is worth.
If you feel the fair market value isn’t enough, and have proof that similar vehicles are going for $11,000, present that to the insurance for their consideration. Also, check with your own agent to get advice, and ask if per chance you gave GAP coverage. If you do, it will pay the difference between what the insurance pays out and what you owe.
You do realize that the check will go to the bank that hold the title, not you don’t you?
1. A starting point is to present them with the prices that you found for comparable cars in the Kansas City area, which you state were all over $11,000, and argue on that basis that the value of the car was over $11,000, not $8,697.
2. Your statement that you would have “just over $5,000” left to purchase a replacement vehicle is not really correct. Even with the money that they propose, you would have “just over $5,000” for the downpayment. You could purchase a vehicle costing more, and finance the difference, preferably with payments no greater than what you were paying on the previous car.
Unfortunately the insurance company is only liable for the actual cash value of the car. You can try demanding a replacement car of comparable value but that is still limited to the actual cash value of the destroyed car. Good luck but I don’t think you will get what you think is fair.
Sad to say but insurance company is only liable for the actual cash value of the car.