For time to time I have this unpleasant thought in my head and I thought I will try to get more informed about it so if (or when) the time comes, I will not be in a panic mode trying to learn about this stuff.

As my cars are getting old and the thought of getting into an accident and have the insurance company tell me it is a write off scares me......so I appreciate if someone in the industry or have hand-on experience explain how these negotiations with insurance company works....

Say for example that the insurance company think the car is a write off after an accident because the cost of repair is close to the value of the vehicle in the black book. In this case, if I want to buy the damaged car back (after it has been totaled) to repair for myself (or parting-out) how does that negotiation go and what title would the car carry in this case (Irreparable ? savage ? rebuild ? none ?). Is there a way to avoid having the car branded totaled (irreparable or savage) ?

 

Great question.
As some on here know I am an appraiser and specialize in Porsche. This has been a side business for me for years. I do it because I love cars and like meeting people with similar interests. I do have another business as well.
Each insurance company works slightly differently in that they will put a value on your car (ACV-actual cash value). This value is usually below market but sometimes can be a good value. If your car is able to be repaired for under 70% of ACV (sometimes plus a buffer for unexpected further repair) they will fix it. If above most insurance will offer to pay you ACV plus tax or offer to let you keep the car and they will deduct salvage value from ACV and pay you that and usually not brand the car.
You can negotiate the ACV by supplying ads for cars for sale, and sometimes convince them. Other ways to increase is if car has options or mods that increase value. Insurance is supposed to provide you with their appraisal.
If you can't come to terms with insurance you can hire an appraiser to provide an appraisal showing ACV and this includes comparables and details on your car. The insurance appraiser and your appraiser try to convince each other to change ACV and if they can\t agree it goes to an arbitration judge (I also can act in this role) and the cost (usually $500) is split with insurance. The judge chooses one appraisal (can't compromise between the two) and both parties agree to be bound by this decision.
You also can mitigate all of this by having a policy with agreed value (19a).
With Porsches and other high end vehicles it is worth it to get agreed value and if not usually worth it to hire appraiser if car is totalled.
Insurance companies are in business to make money so it is not a surprise that the values they offer are usually very below market and they don't spend money on properly detailed appraisal reports. I take the time to put a paint meter on the car and properly inspect and document the vehicle. This is the reason they usually lose when going up against me.

 

In Ontario the car will typically be branded salvage after a total loss unless it it was in a flood in which case it will be branded irreparable. If you fix it and it passes an inspection you get a rebuilt title and it is now road worthy. If you part it out the vehicle brand doesn't matter. You can own a vehicle with a salvage or irreparable title, it just can't be on the road. Hope that helps.

 

@Turbodan you mentioned above and I don't understand why......why does an individual like me get paid HST on top of the ACV?

 

Thanks Dan, this is very helpful and I especially like the scenario you described above for not branding the car ......

Think this should be a Sticky.... mod ?

 

insurance is supposed to put you back where you were before incident. if you replace the car with another, you must pay tax (HST unless in corporate name). so they pay you the tax.

 

This info is not true for many insurance companies, in the case of your car is considered a total loss but they pay out the acv minus salvage and you get to keep it and they do not brand title. I have seen this happen many times.

 

In my car financing days, I went up against insurance companies many times, as the original payout offer from the insurance company wouldn't pay out a lessee's balance, and (theoretically, at least) the leases were all structured such that the balance should never be more than the value of the vehicle. I almost always was able to get the insurance company to come up from their initial offering by sending them examples of cars with similar options and mileage. As Danny stated, they don't work very hard on obtaining a value - a great example would be a GT3 RS, where they just look up the value of any old 911. So if you can't get a 19A, you still don't have to accept the insurance company's first offer if you feel it's undervalued, and 90% of the time it will be.

 

That make sense and reasonable.....but can you help me understand how much bargaining power I have..... I mean what is motivating the Insurance company to up the payout and not drag this on for months ....... why would they not take the "take it or leave it" attitude since time is most likely on the side of the insurance company.....

 

To be honest, I'm not sure - maybe Danny can help. My experience has been to come back to them with a) reasons why their evaluation was incorrect, meaning listings of cars for sale at their price with less options/lower trim level than the one in question) and b) show them listings of cars that more accurately reflect the actual value. There's always the old argument of "if you think you can replace it at $xxx go ahead and buy it". They've almost always come back with a more reasonable offer. I have definitely encountered "unmotivated" adjusters, but persistent daily phone calls can help motivate them. Certainly if the policy provides for a rental, they'll be much more quick to come to a resolution. It might help that I've been calling on behalf of a lessee, so they know they're dealing with another company, not some moron who knows nothing about the value of cars, and that I need to get things closed on my end so I won't leave them alone until it's done.

 

Once they make a formal offer for a vehicle right off, and provide an appraisal they recall the rental car, even though the rental car dollar amount is stated in each policy.
They often screw around and low ball and go on vacation and change adjusters, (who quite often are not well educated). They try to frustrate customers to just settle. Sometimes they can be reasonable. Other times an appraiser needs to get involved to get them serious. The process for independent appraiser and arbitration are laid our in Ontario Insurance act and specify time periods of 2 weeks for responses so it can get settled quickly.
Some insurance companies are great and others do questionable things. I know of one guy who had terminal cancer and insurance co knew this and tried to drag out case hoping he would not be around at the end. This is not common. Always reminds me of the movie Incredibles.

 

The customer does not need to release the vehicle from his repair facility until settled. In meantime there may be storage fees. This is the customer's leverage.

 

x2 Turbodan

My mom and stepfather were hit by a deer, going from toronto to florida, in North Carolina.
Their Lexus 430 was a mess. Deer guts and four sides of guard rail. Everyone walked away.
While the parts to repair the 2 year old vehicle were expensive, I believe the 2 weeks storage in the yard, is what ultimately wrote it off.
I seem to remember 500-1000/day ?

 

Sometimes you can get good leverage with buying back the car depending on what salvage value they put on it.

My 1989 cab got slammed by some idiot not looking before turning left in front of me; car had been in the country for 2 weeks

We agreed on the payout as they totaled it; with a bent frame etc i really didnt want the hassle to get the car back anyways. But I asked them how much to buy the car back and they said $3k. Was surprising to me as knowing the damage was all in the front and the engine was fine, i figured someone might pay more so agreed to buy it back for $3k

Somewhere in this process they kinda figured it out and said that they now wanted $8k. I told them we had agreed in writing to a price and deal was done.

So bought it back for $3k and sold it for $11.5k 2 weeks later to a guy who had the shop/capability to straighten out the frame and fix it. Win/win except for the insurance co.

 

Its guy's like you that become hero's to the rest of us.