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Question
hello. i purchased a car with a salvage title. I've found that most companies will not allow comp or collision coverage on my car. that being said, if i get into an accident or if a tree falls on my car etc, my insurance company will obviously not give me any money for physical damage to my car. at the same time, i have an outstanding loan on my car. so when something happens to my car, i get nothing, but i still have to pay the loan that has the car as collateral correct? my husband is of the impression that "the bank owns the car" and if the car is damaged and we get $0.00 to fix it, the bank will just take it and he will won't have to pay for his loan anymore. i know this is not correct, but am unable to explain how... can you please help me?? thank you so much!
Mary Kay
Hi,
As a general rule a salvage vehicle that is repaired is worth 30-40% less than a non-salvage.
I have seen these cars covered under comp, however it is pointless to have because the insurance company through their investigation of a comp claim (fire and theft) will make it appear as though the insured is trying to defraud the company trying to get non-salvage value.
As for your situation, no, you cannot just walk away if something happens to the car.
You have a contract with the lien holder that you will pay them x amount of dollars. It does not matter if the car is junk or whatever. You signed the contract stating you would pay them.
This happens to many upside down in their vehicles. Car gets stolen. Deemed toatalled at $4,500 and you own $6,500.00. You owe the finance company the $2,000.00 and they will collect.
On new cars, there is gap insurance. This covers the gap between the actual value of the car and what you owe.
Your husband's thinking is like my briother's. My brother borrowed money from me for a car. He sold it and since he no longer owns the car, he doesn't owe me the money.
Salvage vehicles can be a bargain because you can get a newer car for less money, but they also come with the caveats you refer to.
Rob
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Answers by Expert:
Rob Painter, Ase, CFEI, CAFATE
Expertise
Please remember. I am not an attorney and cannot legal advice. My answers are based on my experience due to litigation I have been involved in as an expert, for both insurance companies and while oposing them opposing them. I deal with only comprehensive claims on autos related to fire and theft. I have even had the opportunity to rewrite policy coverage language as it relates to vehicle theft and forced entry for insurance defense attorneys.
Experience
Experience in the area: Working with insurance companies and attorneys on these issues for over 20 years. It is very common to have a reported stolen car with a so-called factory anti-theft system to have the theft claim denied. I have served successfully as an expert witness in the courts across the US representing the insured and their attorney revealing that the insurance expert did not take all known theories into consideration before rendering their "Forensic" conclusion. Many insurance carriers us independent "Forensic" experts to examine reported stolen vehicles commonly using flawed methodology implicating the innocent insured with the theft. My job is to determine if the insurance expert reached his conclusions based on accepted scientific principals or just net opinion with no basis other than opinion. My case record against such experts is very compelling.My resume can be seen at the catagory "Auto Theft and Prevention." In "Forensics" the scientific method must be employed. In the forensic locksmith field determining how a reported stolen vehicle was last operated, many processes cannot be duplicated and are conveniently not addressed. If they were, juries would have the opportunity to make a fair and impartial opinion at least about what the expert could or could not prove. There is a purported process determining the last key used. The chances of determining such is very rare uless the key is found in the ignition lock. Experts commonly destroy evidence as well and are rarely questioned on this event. I reveal the weakness in their testimony on such instances.
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