I was in a car accident that was not my fault. The insurance company wants to total my car and give me some money that won’t be enough to have it fixed.

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I was in a car accident that was not my fault. The insurance company wants to total my car and give me some money that won’t be enough to have it fixed.

I love my car and want to get it fixed. Is there anything I can do?

Asked on March 22, 2009 under Insurance Law, California

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 12 years ago | Contributor

If the cost to repair the car exceeds the market value of the car, or comes close, the insurance company will propose to "total" the car and pay you the fair market of a comparably equipped car of the same year, make, model, condition and having the same equipment.  (That value is often a matter of negotiation.)

If the car is totalled you have in essence sold it to the insurance company. The insurance company then is entitled to have you transfer title to the car to it and takes possession.  The insurance company then sells the car for "salvage" -- and the salvage buyer goes through it and strips the car, selling any useful parts, and the carcass is sold for the scrap metal value.

Let's say the car was worth $5,000 before the accident, and it would cost $6,000 to repair.  Let's also assume the "salvage value" in terms of useful parts and scrap metal is $1,200. The insurance company will pay you the $5,000, sell the car to a salvage shop for $1,200 and bear a net loss of $3,800.

 

What you can do is ask the insurance company what the salvage value of the car is, and then negotiate with the company so you pay it what it would have received for salvage value. Thus rather than give you $5,000 the insurance company would give you $3,800 and you'd keep the car.

If you want to have it repaired you'd pay a repair shop to repair it or fix it yourself. Many insurance companies would do this willingly, but there are sometimes heated discussions in terms of other charges, such as for storage, etc.


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