InsuranceFilter: Who is entitled to my car?

February 25, 2005 7:30 AM

InsuranceFilter: Who is entitled to my car?

I recently was involved in an accident and the other driver's insurance company has assumed liability. The Kelly BB value for my car prior to the accident is about $3200. Coincidentally, the repair estimate is just a few dollars shy of $3200 with an acknowledgement that more damage is expected upon disassembly. I expect the insurance company to cut me a check for $3200 but, by doing so, are they

A) buying my car from me at market value (thus getting to keep it for themselves) or

b) compensating me for my estimated loss (and I get to keep the car)

Note: The car is drivable with cosmetic damage for the most part. I expect I could sell it now in the 800-1000 range IF I get to keep it. The insurance company has not yet made a settlement offer.

posted by whatisish to Work & Money (5 answers total)

The insurance company will probably decide that the car is a write-off and write you a cheque for the BB value. In this case the car technically belongs to the insurance company but as long as it's registration/deed is changed to indicate that the car has been junked, they don't actually care to take possession of it. To continue to use the car would be fraud and you could go to jail.

You could tell them that you want to repair this car and put the $3200 into repairs. Discuss with your own agent/broker if this will affect your own insurance rates at all (driving a car that "should have" been written off).

But really, this varies so much from one jurisdiction (e.g. US state) to another (e.g. around here you always deal with your own insurance company and if it's the other guy's fault, it's up to them to get themselves compensated by the other insurance co.) that you really need to talk to your own agent or broker (or an independent expert) to figure out all the ins and outs.
posted by winston at 7:41 AM on February 25, 2005

If they total the car (usually done if the damage is greater than 75% of the value), it is option A. If you want the car, you have to buy it back at the junkyard value, which would be the $800 or so in this case.
posted by smackfu at 7:53 AM on February 25, 2005

Basically it boils down to who has the salvage rights to the car after it is totalled. Usually the insurance company buys these rights as a portion of the payout, but you may be able to retain the salvage rights by accepting a smaller payout. More info on this here.

Then, of course there is the question of how to title a salvaged car in legal fashion. This varies from state to state, so consultation with your DMV might be in order.
posted by TedW at 7:54 AM on February 25, 2005

What smackfu and TedW said.

I had a similar accident a couple of years ago in Missouri. The other drivers' insurance called me and said "we're totalling your car out; you can have $2000 and keep it or $2500 and we'll take it." I kept it. If the difference is small enough, you can take the lesser amount and either keep driving it or sell it on your own and come out ahead.
posted by AgentRocket at 8:19 AM on February 25, 2005

This just happened to me (in Michigan), and yes, the insurance company gets it. They sell it for salvage to recover what money they can. Or I could have kept the car and taken the amount less what they would have gotten at salvage.
posted by pmurray63 at 9:53 AM on February 25, 2005