Expert: webfoot - 9/16/2006

Question
My sister was involved in a rear-end collision in TX.  The other driver was at fault and the other driver's insurance company has come to look at her car.  We have been playing phone tag with them but they did leave a message that the car is a total loss.  It was a 1995 Chevy cavalier and less than 1 month before the accident she spent $500 on new brakes.  Also, less than 3 month ago, she spend $250 on new tires.  We did give the adjuster copies of those invoices in hopes of getting the money from them.  When we finally speak with the adjuster on the phone, do we have to accept the offer right away?  Do we say we want to think on it? Can we say it's not acceptable without the money for the repairs?  We just want fair value for the car and the money she just spent on it.  Also, they are paying for her rental right now and when will we be obligated to give it back?  Any help you can give me to speak to the adjuster without sounding like and idiot or getting pushed around would be greatly appreciated.  Thanks for your help!

Answer
Ok, there are a couple of things to keep in mind when it comes to adding value to a car based on repairs.  

Lets say you own a car lot and happen to have a 1995 Chevy Cavalier with an actual cash value of $1,800 that has decent (but not new) tires and brakes.  Let's say that you have another, identical 1995 Cavalier with the same mileage sitting right next to it, but it has four bald tires and the brakes are making noise.  Is it going to bring the same price? Could you even sell a car in that condition? Not likely. Let's say you have a third 1995 Cavalier sitting next to those and it has new tires and brakes.  Is it going to bring an additional $750?  Not likely.  

Tires and brakes are maintenance items.  There is an assumption that the average vehicle has good tires and brakes.  If they happen to be new, it does not add an equal amount of money to the value, but if the tires and brakes are bad, the car is often undrivable and cannot be sold for the same price.  

Here is another example.  Lets say that $1800 Cavalier has a blown engine.  What is it worth then?  About $50.00.  You could spend $3,000 on a new GM engine but would that make the car worth $4,800?  No, but it would be worth more than $1,800 because that is a major componant and older cars with new engines do actually bring more money because it is the heart of the vehicle.  The new engine has extended the life span of the vehicle.  Tires and brakes do not extend the life span of a vehicle,,they only make it safe and legal to drive.  
The insurance adjuster may ad a couple of hundred bucks for the tires and brakes, but I wouldn't expect any more than that.  

As far as not accepting the offer, that is up to you, but I would advise that you keep these things in mind.
Legally, the rental likely ends on the day that the vehicle is deemed a total loss.  Anything beyond that is pure goodwill on the part of the other insurance company and they can cut it off at any time, without notification.
I don't know where your car is sitting, but if it is in a place that charges storage such as a tow yard or body shop, the insurance company is going to need for you to release it immediately.  If you do not allow them to pick it up, then they can simply start deducting the storage from the settlement offer.  You may want to keep a cell phone nearby to end the phone tag or the adjuster may simply end the rental.

Hopefully they will make a fair offer for the car.  Don't expect it to be too much though as a 95 Cavalier as something that you can buy all day for around $1,200-$1,500.  Do remember that I advertise an honest and candid answer.

I wish you luck and would appreciate your feedback.