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Expert: - 12/19/2010


Question
Driver hit my car which was declared totaled by her insurance (She was at fault). Her insurance determined ACV of my car to be at $6,500, but wants title of my car and give me only $5,000, claiming the insurer only had $5,000 in property damage insurance.  (1)If I decide to purchase car back from insurance, is the salvage value deducted from the ACV or the $5,000?  (2) Could salvage value be more 20% of ACV (Insurance has not come back with a salvage value)  (3) Are there any additional costs.  Thanks a lot.

Answer
I think you are better off retaining the salvage.  They will estimate the salvage value and deduct that from the $6500, not the $5000.

Here's an example.  Let's say they estimate the salvage value is $1000.  Your claim would be worth $5500 (6500-1000).  But they won't pay more than the policy limit of $5000.  So you get the $5000 and the car.  You can use the $5000 to repair some or most of the damage.

This is an unusual situation and a bit confusing.  It is possible your adjuster will calculate it wrong.  Make sure he/she calculates it this way.  If not, complain to the supervisor.

If you think they are being unfair, you can complain to the state department of insurance.

Couple things to watch out for:  make sure they don't over-estimate the salvage value.  They will call salvage / junk yards and describe the vehicle and damage, and then the salvage dealers will give them a suggested value.  You should do the same to make sure they estimate it fairly.

Also, check with your insurer to see if they will cover your damages under Underinsured Motorist coverage, which varies by state.  Also, if you have collision coverage, they'll cover the full amount.

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Claims Guy

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I am currently an Auto Claims Manager for a large insurance company. I have 18 years experience in the industry, having worked as a Claims Adjuster, Injury Settlement Negotiator, Claims Manager, SIU/Fraud Investigator, and Compliance Officer......I can answer questions related to any aspect of Automobile insurance claims and coverages. I can provide an inside look at how insurers operate. I always treat my customers fairly and want to help make sure you are treated fairly. However, please keep in mind that being treated fairly according to the law does not guarantee that you will get what you want. I can also answer some questions regarding Homeowner's and other types of insurance claims. I have handled all types of auto insurance claims and coverages. I am NOT an automotive repair expert but can give advice re how insurers handle complex repair issues. Please keep in mind that every state has its own set of laws pertaining to rules of the road, liability, and insurance. No one is an expert on every state. I am most familiar with laws in Maryland, DC, West Virginia, and Virginia, but will attempt to answer questions for other states. I am not an attorney an cannot provide legal advice. My advice will be my opinion based on my experience.

Experience

I am currently an Auto Claims Manager for a large insurance company. I have 18 years experience in the industry, having worked as a Claims Adjuster, Injury Settlement Negotiator, Claims Manager, SIU/Fraud Investigator, and Compliance Officer. I am not an attorney an cannot provide legal advice. My advice will be my opinion based on my experience.

Organizations
CPCU Society. Adjusters license in multiple states. International Association of Specal Investigators

Education/Credentials
I have a B.S. in Finance and have completed the AIC and CPCU designations.

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