Expert: Richard Hixenbaugh - 6/30/2011

Question
I have an older pickup with a blue book value of around $3000.  We were recently in a hail storm and the insurance paid out $2,200.  Since it is an older truck we haven't considered fixing it, it was about 3 weeks ago so even if we had we wouldn't be able to get into the repair shop due to the other cars lined up in front of us.  Yesterday the pickup caught on fire and burned most of the engine compartment, likely causing a total loss.  Will this be treated as a separate event or will they deduct the $2,200 they already paid me and only give me $800 as a total loss?  The pickup would have still brought $2,000 at least even with the hail damage.

Answer
Hi Austin,

The fire claim is a seperate claim. However when a vehicle is declared a total loss the insurance company will pay the value of the vehicle as it was just prior to the damage that caused it to be totaled. Your insurance company will determine the base value of your and then they will deduct the hail damage and your deductible.

Once they make you an offer, and if they have tried to deduct the full $2200.00 for the hail damage, you can argue that the value of the truck is not reduced by the cost of the repairs. Due to the age of the truck, someone would have bought it for $2000.00, only deducting $1,000 for the hail damage. They should not deduct the retail cost of the hail repair from the value of the truck. Although they may try to stand firm on a full deduction.

I hope this helps
Richard Hixenbaugh