| The Big Stuff: Dealing with Write-offs and Stolen Vehicles |
| Written by Administrator | |
Why Is My Car a Write-off? Sometimes, people climb onto an emotional rollercoaster when their vehicle is seriously damaged and the insurance company decides it was “totaled”. We must remember that when the insurer declares our vehicle unfit to drive, it’s a liability situation; it’s all about safety.
The sticky part for the car owner arises when the insurance company won’t pay to fix it, yet the payout on the claim is dramatically less than the amount we may still owe to the finance company. Is it fixable? Perhaps, but there is a fine line between repairable and safely drivable. If the insurer repairs the vehicle and the driver subsequently finds themselves in another accident or seriously injured as a result of a malfunction of the vehicle because not all the damage was detected and repaired, they could have a lawsuit on their hands. An accident could also injure innocent parties other than the driver. Category A1. The automobile is a total loss. The damage is so complete that no parts can be salvaged. It will be crushed and the scrap metal sold.Category B2. The vehicle will never be roadworthy. Some parts may have value as well as its scrap metal, so it will probably be crushed and recycled.Category C3. The damage is relatively high with respect to the market value of the vehicle. The insurance company will, at this point, choose to write the car off instead of repairing it.Category D4. The vehicle could be repaired, but the condition still won’t be great.Category F5. If a vehicle was badly damaged in a fire, the insurance company might write it off as a Category F loss.It’s also understandable that a lender wouldn’t want their money secured by a badly damaged vehicle that may not truly be worth what we owe. As painful as it might be to have our vehicle declared a write-off, we need to value our safety and respect our business dealings with our lender and our insurer. What If Your Car is Stolen?If you don’t own your vehicle, you will no doubt have comprehensive coverage on your auto policy and should be covered for theft. You would, of course, contact the police as soon as you discover your vehicle is missing and complete a police report.Contact your insurance company as soon as possible and give them the file number from the police report. They will probably work directly with the police to conduct an investigation into the theft. Naturally, the insurance company needs to ascertain whether the missing vehicle was a legitimate theft. Insurance fraud is rampant these days and they will not honor your claim until they are satisfied that you are not negligent (left the car unlocked or with the keys in the ignition, for example) or responsible for any way in trying to defraud the company of money, or other such exclusions. Understand that a common fraud tactic on the rise with the number of people who are “upside down” on their car loans is "owner give-up." The perpetrator devises a scheme to dispose of their vehicle in some way and then reports it stolen. If they are successful in securing a payout on their claim, they can then pay off the car loan without negatively affecting their credit rating. If your vehicle is stolen, you will file a claim with the insurance company in which you state the circumstances of the theft for their records. Then you just sit tight and wait until the police either notify you your car has been found, or… …the insurance company notifies you that they are willing to settle and pay out the claim. Depending on your coverage, you may or may not get replacement value. Most often, you would get market value, or the “blue book” value or advertised value of a car matching the criteria of your car. If you have coverage for a rental vehicle in the event yours is not available to you, you could set that up with the insurance company so you are not inconvenienced and can go about your life until the claim is settled. Alternatively, you might seek reimbursement if you have rental reimbursement coverage on your policy. If you have accepted a payout on your claim and police do recover your vehicle, you are no longer the owner of the car and the insurance company will probably either send it to auction, or sell it for parts, if it’s damaged, as they often are when stolen. The average damage to a stolen vehicle is about $7,000. Best case scenario: your car will be recovered with manageable damage which the insurance company will agree to pay and you will be responsible for the deductible. One aspect to vehicle theft that those who have experienced it will probably agree on is that it’s similar to having your home burglarized; you feel violated, and may not want to get into your car again. Sometimes having a stolen vehicle remain lost, or written off, is preferable to having it returned. If you have a Cadillac Escalade or another of the vehicles on the “most stolen” list, you might save yourself a lot of aggravation and money by paying the extra for not only a high-end anti-theft device that is professionally installed, but a policy that includes full value reimbursement if your vehicle is stolen. |
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