Expert: Bennie719 - 10/19/2007

Question
Hello:

Pulling out of a parking space on a brand new, 2 day old Vespa, my rear
wheel slips on an oil patch and I fall. Aside from a few scratches on the bike,
my handle bars get knocked slightly out of alignment.

When I bring the Vespa into a certified dealership's mechanic to straighten
the bars, he tells me that the real damage is far more extensive: a broken
fork and steering column. The estimate he gives me for these repairs along
with the body work is $1500.

I have complete coverage on the Vespa and my deductible is $500. The cost
of the Vespa was $4500. The dealership will give me $3000 for the bike in its
current condition (at this point I'm sure you see where I'm going...).

If I file a claim with my insurance company, is it possible for them to give me
the $1000 so that I can just replace the entire bike or will they only pay the
dealership/mechanic directly for the repairs?

Thanks.  

Answer
Hi Jean-Luc,
Your insurance company is obligated to repair your vehicle unless the cost of repairs plus the salvage value exceeds the value of your Vespa.  Otherwise they will total the Vespa for it's fair market value.  That is not the amount you paid for it, but the fair value for a used Vespa of like kind and quality.
You are stating that the dealership is willing to give you $3,000 (salvage value) for the Vespa.  This must mean the estimate to repair is around $1,500.
The insurance company is going to depreciate the Vespa, but it is going to be very difficult to establish the fair market value of a 2 day old vehicle.
I see no reason why you should not present this idea to your insurance company.  
If they are in agreement with the replacement idea, they would handle it in a slightly different manner.
They would be able to purchase a new Vespa at a discount from what you are being quoted as a purchase price and perhaps that discount would off-set the depreciation.
Either way, you will still have to pay your $500 deductible.
Good Luck,
Bennie
San Francisco Bay Area 10-19-07 12:28 PM PST