Car Insurance

[matt9]

1. If you get into an accident with an older used car (~5 years) and it's a write-off, how do they appraise it's value? How are you going to be sure you are going to get enough money to buy an "equivalent" car before the accident?

2. Anybody here work at TD Insurance or TD M Insurance

[matt9]

No one had a 'writeoff' accident?

Lets say you buy a car for $10,000 (before tax and fees) and you get into an accident 1 month later and it's not your fault. And the company appraises the car at like 8000, how is that fair? How do you get an equivalent car back?

[Noisy Crow]

No one had a 'writeoff' accident?

Lets say you buy a car for $10,000 (before tax and fees) and you get into an accident 1 month later and it's not your fault. And the company appraises the car at like 8000, how is that fair? How do you get an equivalent car back?

Most insurers offer some sort of depreciation coverarge. It makes up the difference between what your car is worth and the cost of a new vehicle. Otherwise the expectaion is that since you are currenly driving a used vehicle, you will be compensated accordingly if it is written off.

Now, as to being "fair": The only thing fair has to do with this is whether or not the agreed upon contract is fulfilled.

[jstro]

AFAIK, waivers of depreciation are only offered for new vehicles. It's unlikely one would apply for a used vehicle that's 5 years old.

The adjuster would likely see what other vehicles with the same age and approximate mileage are selling for by checking AutoTrader and black book values.

There's no guarantee you will receive a settlement that covers the original purchase price of the car or is enough to get you a new vehicle. (For example, if you overpaid by $1500 compared to what that vehicle usually sells for, you're likely out of luck as far as getting your purchase amount back.)

[jstro]

^^ My thoughts are a novice opinion only, btw. :) I don't work for an insurance company.

[Noisy Crow]

There's no guarantee you will receive a settlement that covers the original purchase price of the car or is enough to get you a new vehicle. (For example, if you overpaid by $1500 compared to what that vehicle usually sells for, you're likely out of luck as far as getting your purchase amount back.)

Yep. Otherwise there would be some pretty good scams out there.... get an inflated bill-of-sale from a shady dealer, force someone to rear-end you, and then walk away with more cash than the car was ever worth.

[matt9]

I think one way it should work out is that you tell your insurance company you want to purchase back the same car (equivalent).

So you are required to do your own research and pick 3 cars for sale from respected dealers that have cars that are the same year, condition, features etc and you submit it to the insurance company. They look over the 3 cars you choose and review them and if they approve, they let you buy any one of those 3 cars (or how many they approve) and they will pay for it.

[Wild Weasel]

Yeah.. the waiver of depreciation only applies to cars you buy new. Different companies have it available for different lengths of time though.

As for buying a $10k car, writing it off a month later, and having them offer $8k... you can certainly argue with their appraisal, but ultimately if they don't budge, then that probably means you paid $2k too much for the car.

[Skarbro]

Insurance is all about getting back what you financially lost at the time of the loss, not when you purchased the vehicle. It's totally irrelevant what you paid initially unless it is a brand new car and the insurance company gave you the waiver of depreciation endorsement.

[matt9]

Ultimately it should be what is required to buy an equivalent car (with tax)

[iconicrocket]

I believe the word is "indemnification", compensating the insured to the same financial level at the time of the loss. Your actual cash value will probably be the replacement cost minus depreciation.

If you're going to dispute it, then I suggest show your insurance agent or adjuster a similar car on autotrader and how much they're going for.

[matt9]

Well lets say you bought the used car and it crashed the next day. How much depreciation is that? Should be none? And I'd expect the insurance company to cover the tax too.