Author Topic: How to proceed after likely totaling of car?  (Read 417 times)

mrteacher

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How to proceed after likely totaling of car?
« on: November 14, 2017, 07:02:10 AM »
Hi all,

I want to get some advice from the savviest, most level-headed bunch of internet folks I "know."

This morning I backed the corner of my car into the corner of my apartment. No one was injured, and no damage to the building at all. However, my car took a good beating. Rear headlight smashed up, fender crumpled, and the metal siding around the trunk is all bent up.

I am not positive, but I'm guessing the cost to repair is going to be more than the value of the car (2006 Mazda 3 with around 100,000 miles and some other cosmetic issues pre-accident -- ballpark value of around $3,000).

Since the headlight is out, I would imagine that I would have to repair it to make it 'street legal'?

My primary questions are as follows:

1. Should I open a claim with my insurer (GEICO) to try and receive some compensation and risk an increase in premium, or avoid reporting to insurance, unload the car for whatever I can get for it, and look to buy a different car?
2. How does a payout work in the event that it is totaled?
3. Any other tips or words of wisdom for me here?

Thanks!

nereo

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Re: How to proceed after likely totaling of car?
« Reply #1 on: November 14, 2017, 07:16:08 AM »
You have more options than you are giving yourself.

For starters, find a body shop and get an estimate for what it would take to make your car street legal (not cosmetically perfect).  It might be far less than you expect.  Even better, replacing a tail-light assembly is not terribly difficult, and you can buy them online for $100 or so, and the only tools needed are typically screwdrivers.  Metal siding typically involves replacing the entire panel (cheaper than hammering it out and repainting) - though if its still functional you can put some primer to stop rust and call it good.  Bumpers are also typically just replaced.  If you don't care about matching the color used ones are a few hundred from salvage-yards.

Whether or not to go through your insurance depends greatly on what coverage you have and what your deductible is. If your deductible is $500 or $1000 you are probably better off just paying out of pocket. 
Rising premiums is a fear tactic they use to keep people from making claims. Remember you can always find a new insurance company, and most of the time if you call and threaten leaving due to a single claim they will "waive the increase this time, Mr. Teacher".  If they still raise your premiums, get quotes from elsewhere.

In the event that it is "totaled" they cut you a cheque, minus the deductible, for the trade-in value for your vehicle (which often less than you could get selling it 3rd party), and typically they keep your vehicle.  Blindly estimating on your car via KBB but it's probably int he neighborhood of ~$1,500 - deductible. Your insurnace company will decide whether their costs for repairs (always less than what it costs you due to deals with body-shops) is more/less than the value they'll get from your vehicle either in sale or scrapped for parts.
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marielle

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Re: How to proceed after likely totaling of car?
« Reply #2 on: November 14, 2017, 08:03:21 AM »
In the event that it is "totaled" they cut you a cheque, minus the deductible, for the trade-in value for your vehicle (which often less than you could get selling it 3rd party), and typically they keep your vehicle.  Blindly estimating on your car via KBB but it's probably int he neighborhood of ~$1,500 - deductible. Your insurnace company will decide whether their costs for repairs (always less than what it costs you due to deals with body-shops) is more/less than the value they'll get from your vehicle either in sale or scrapped for parts.

From anecdotal evidence they typically give you more than what the car would have actually sold for to a private party. It's not unheard of to get $5k for a car with 130k+ miles. You can also argue the value especially if the mileage is lower than usual. I've never heard of someone getting ripped off from insurance other than a guy who was driving a classic car with a newer engine and a lot of upgrades (but he was able to fight this by finding a listing of a similar car though).

I think you can call your insurance at any point and ask them to value your car. Not 100% sure since I've never tried this.

topshot

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Re: How to proceed after likely totaling of car?
« Reply #3 on: November 14, 2017, 08:10:02 AM »
Wouldn't bother filing a claim unless you have a low deductible. Doubt it would do any good anyway since you shouldn't have collision on such a car.

I'd just get the minimum done to make it legal/safe to drive. Won't be any frame damage on such a low impact hit. Replace the taillight (may need to duct tape it in place!)and remove any sharp/hanging pieces. Since you don't sound handy, I'd have the body shop also verify nothing with the fuel system was damaged (i.e., tube going down to the tank).

rubybeth

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Re: How to proceed after likely totaling of car?
« Reply #4 on: November 14, 2017, 08:42:08 AM »
Payout doesn't work quite like you're thinking. For example, I just had a vehicle declared a total loss in Oct, so I'll explain what happened.

Car was hit while parked on the street in a hit-and-run. I had the police come out and make a report. I contacted our insurance agent. She warned me it might be a total loss. Car had body damage and the front tire was punctured in the side wall. Used insurance free towing to take it to tire place. Two new tires were like $350 (same tires on the vehicle). Took it to the body shop for an estimate. They quoted $2,500. I submitted both the tires and the estimate to insurance company. Insurance alerted me it could be a total loss, and sent out an assessor. Assessor looked at it and asked what I wanted to do--I told him that it seemed driveable, so we'd likely want to keep it. He did his assessment both ways--with us keeping the vehicle and getting rid of it. It broke down approx. like this:

Edited to add KBB value on "good" condition: $1,150
Value of car based on dealer comps within 500 miles: $3,515
Minus deductible: $500
Minus scrap value $215 (he helped me out on this, went with lowest possible scrap value since he knew we wanted to keep)
Check for $3,015 if we turned over the vehicle (value minus deductible), check for $2,800 if we kept the car (value subtracting our deductible AND scrap value)

So a week later we got a check for $2,800. Minus the tires and a mechanic to look it over for any mechanical damage for $45, we came out $2,405 ahead, and still have the car.

You can talk to your insurance company about options and decide whether or not to claim it to the insurance after talking to them. It's not the act of REPORTING an accident to your insurance that would cause your rates to go up, it's an actual CLAIM against the insurance that does that. So start the conversation, get the light fixed, etc. to make it driveable, and see what your options are.

We are probably just going to leave the car as-is, but we did also take it to a local dealer to find out the trade in value. They said they'd still take it as a trade, even with damage, since they can fix the body damage and resell. Trade in estimate on "fair" condition was $500-$1000. So we could eventually trade this in with another bit of money going into our pockets from it. It can't hurt to ask the questions--from your insurance, from a body shop, from a car dealer who takes trades, etc.

And I wholeheartedly disagree that it's not worth it to file a claim--filing a claim in our case meant we got a check for $2,800!
« Last Edit: November 14, 2017, 08:56:00 AM by rubybeth »
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surfhb

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Re: How to proceed after likely totaling of car?
« Reply #5 on: November 14, 2017, 09:00:33 AM »
All those guys who work at body shops do side hustles on CL.   Id be will to bet you can get the done much cheaper than you think 🤔

sailinlight

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Re: How to proceed after likely totaling of car?
« Reply #6 on: November 14, 2017, 09:22:02 AM »
What is the purpose of having collision coverage if you don't make a claim when the car is totaled? I would rethink that in the future

mrteacher

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Re: How to proceed after likely totaling of car?
« Reply #7 on: November 14, 2017, 09:48:49 AM »
Good feedback. Thanks.

I was especially glad to hear that it's not the reporting of the incident that causes rates to go up but the actual filing of a claim. I will do some research and get some quotes. Maybe I understated the damage in my first post. The damage is such that the trunk is very difficult to open. The left rear is smashed up pretty good. Yes, it's still driveable, but it's in rough shape!

I only asked about not filing a claim because, in this specific instance, I figured that the value of my car less the $500 deductible might only net me $1,000 or so, and if my premiums were to go up significantly, I might owe several thousand more over the next few years.
« Last Edit: November 14, 2017, 09:53:27 AM by mrteacher »

rubybeth

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Re: How to proceed after likely totaling of car?
« Reply #8 on: November 14, 2017, 10:44:09 AM »
Good feedback. Thanks.

I was especially glad to hear that it's not the reporting of the incident that causes rates to go up but the actual filing of a claim. I will do some research and get some quotes. Maybe I understated the damage in my first post. The damage is such that the trunk is very difficult to open. The left rear is smashed up pretty good. Yes, it's still driveable, but it's in rough shape!

I only asked about not filing a claim because, in this specific instance, I figured that the value of my car less the $500 deductible might only net me $1,000 or so, and if my premiums were to go up significantly, I might owe several thousand more over the next few years.

It depends on other comps, though, and an assessor from the insurance company will help determine that. I guess for my car, there was one selling for around $5,000, and a couple around $3,000, so that's how the assessor came up with the value of around $3,500. I thought it was worth less than that, but if that's what a dealer is selling it for, then that's the "going rate," and so I was fine with that assessment. You can also try arguing a value assessment if it is totaled--I've heard this can work if you find different comps than what the assessor finds. If you end up getting a check, you can use that to turn around and fix what needs to be fixed, or put that toward another vehicle--it just gives you options.

You can also ask about your rates going up--usually it's not the first accident that makes rates go up, it's the SECOND. That's what my long-time insurance agent told me. So I paid out of pocket for some damage to another vehicle last year since it was around $1,000 and not worth the $500 savings for my deductible.
« Last Edit: November 14, 2017, 10:46:01 AM by rubybeth »
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mrteacher

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Re: How to proceed after likely totaling of car?
« Reply #9 on: November 14, 2017, 10:55:13 AM »
Good feedback. Thanks.

I was especially glad to hear that it's not the reporting of the incident that causes rates to go up but the actual filing of a claim. I will do some research and get some quotes. Maybe I understated the damage in my first post. The damage is such that the trunk is very difficult to open. The left rear is smashed up pretty good. Yes, it's still driveable, but it's in rough shape!

I only asked about not filing a claim because, in this specific instance, I figured that the value of my car less the $500 deductible might only net me $1,000 or so, and if my premiums were to go up significantly, I might owe several thousand more over the next few years.

It depends on other comps, though, and an assessor from the insurance company will help determine that. I guess for my car, there was one selling for around $5,000, and a couple around $3,000, so that's how the assessor came up with the value of around $3,500. I thought it was worth less than that, but if that's what a dealer is selling it for, then that's the "going rate," and so I was fine with that assessment. You can also try arguing a value assessment if it is totaled--I've heard this can work if you find different comps than what the assessor finds. If you end up getting a check, you can use that to turn around and fix what needs to be fixed, or put that toward another vehicle--it just gives you options.

You can also ask about your rates going up--usually it's not the first accident that makes rates go up, it's the SECOND. That's what my long-time insurance agent told me. So I paid out of pocket for some damage to another vehicle last year since it was around $1,000 and not worth the $500 savings for my deductible.

I see. If it is totaled, wouldn't the insurance agency write me a check and then take the car? How would I have the option to use that money to fix the car?

Or would I have the option, like you, of taking a little less $ to keep the car?
« Last Edit: November 14, 2017, 10:58:17 AM by mrteacher »

rubybeth

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Re: How to proceed after likely totaling of car?
« Reply #10 on: November 14, 2017, 01:54:00 PM »
I see. If it is totaled, wouldn't the insurance agency write me a check and then take the car? How would I have the option to use that money to fix the car?

Or would I have the option, like you, of taking a little less $ to keep the car?

Sorry if my initial post was unclear--you likely have two options if your car is totaled:

1) Get a payout and surrender the car
2) Get a payout and keep the car

In my case, I wanted to keep the car, so I paid the deductible + scrap value to the insurance company (scrap value is what the ins. co. would get if they scrapped my car), and got a payout.

If I hadn't kept the car, they would not have subtracted the scrap value, and I would have gotten a slightly larger check, but would have had to surrender the car.

Once you get the check, if you keep the car, you can turn around and spend it on whatever you want--including fixing the car! Usually, insurance companies want the vehicle to be repaired to the same condition it was in prior to the accident. Meaning: have it done professionally, and likely at higher cost. Sometimes you know you can fix it yourself, or have a buddy practice his auto body skills on it. Once you have the payout, it's up to you. You then might drop collision coverage on it, since it's already been totaled, or you might not--I was given the option to keep collision coverage, it just won't cover the front end damage.

Note that if you do surrender the car, you want the scrap value to be HIGH, because you get paid that amount. If you want to keep the car, you want the scrap value to be LOW. That's why I said the assessor knew I wanted to keep the car and went with a low scrap value ($215) because that would be subtracted from my payout check. :D
« Last Edit: November 14, 2017, 01:56:09 PM by rubybeth »
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nereo

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Re: How to proceed after likely totaling of car?
« Reply #11 on: November 14, 2017, 02:05:07 PM »
just adding - if you accept the car being 'totalled' it will show uip as such under any VIN/Carfax search (insurance claim: Totaled).  That might make it harder to sell in the future - BUT, you're basically getting paid for the car up front. 

Just be aware.
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mrteacher

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Re: How to proceed after likely totaling of car?
« Reply #12 on: November 14, 2017, 03:39:22 PM »
Thanks for the clarification, nereo.

Update: got back from an auto body shop that expected the cost would be $5,000+, so I'm thinking it'll be totaled. Insurance estimator is looking at it Thursday and then we will know for sure.

It's good to know that we could keep the car less the costs to scrap it, and put the insurance payout towards a second car, but I don't think we will do that. We made the switch to a one-car-family a few months back and have been loving it (and enjoying having fewer car expenses!)

Now I need to do some reading up on buying a used car.

rubybeth

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Re: How to proceed after likely totaling of car?
« Reply #13 on: November 15, 2017, 07:01:53 AM »
Even if it's a salvage title, some people will still purchase it, and you can still trade it in for a scrap value. But if you plan to just junk it anyway, you could just take the larger payout from insurance and use that toward your new-to-you ride. I think one of the easiest way to car shop is to look at Consumer Reports list of recommended buys in your price range, and use that for the used car lots or CraigsList listings. And have a mechanic check out a vehicle before handing over any money--it's usually under $100 to have this done, and they might not catch everything, but they will look for major stuff. If you liked the vehicle you had, you could just hunt for a replacement of that same make/model, maybe in a slightly newer vintage or with lower miles. That's our plan for saving for the next car--we decided the next big repair on this vehicle that was totaled will mean we replace it instead of fix.
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