Fix before car insurance declares a total loss?
June 23, 2015 11:37 AM   Subscribe

I got into an accident this weekend and I dented my door & part of the fender. My insurance company says that if the fix is more than 80%, they are legally obligated to declare is salvage / total loss which means I lose my car. I'm scared that this is the case.

I got an estimate of $1600 from a body shop and estimates of my car's value range from $1600-$2400 (1991 automatic BMW 325i convertible). Is it possible for me to repair part of my car in advance? Or any other way around this? I have a $1000 deductible.
posted by senterstyle to Law & Government (17 answers total)
Best answer: In the USA, in most states, you can get a salvage title for it, they don't just swoop in and take your car. Look up salvage titles in your state.
posted by kellyblah at 11:40 AM on June 23, 2015 [3 favorites]

Is it driveable? I would have it repaired yourself - get estimates from other body shops - and not make a claim. Or just drive it with a fucked up door/fender, if it's safe enough. If you make a claim you'd have to pay the deductible, plus it's going to raise your rates, plus you'd have to get another car.
posted by desjardins at 11:42 AM on June 23, 2015

Best answer: Seconding kellyblah: you can get a salvage title (in Washington state, when I last looked into it, this involved paying $50 and getting a certification that the car was safe to drive). Also, the insurance company will offer you settlement money when declaring your car a total loss; you could put that toward repairs if you wanted.
posted by yarntheory at 11:56 AM on June 23, 2015

Response by poster: I already made the claim, and that's how I found about all this stuff. I live in Minnesota.
posted by senterstyle at 11:57 AM on June 23, 2015

Did you double-check the law in Minnesota regarding salvage titles and whether you can still keep driving the car? In Missouri, when our car was totaled once in a hail storm, we made the claim, got a check for the car's value and a salvage title, but we fixed it, kept driving it, and even traded it in when we got another car later on.
posted by limeonaire at 12:00 PM on June 23, 2015

This happened to me recently and I was really distressed about losing my car and afraid I wouldn't be able to afford another decent one. I ended up getting WAY more for my totaled car from the insurance company than I expected. You may just want to figure out how much they can pay out for you before you give up on totaling it.
posted by chatongriffes at 12:12 PM on June 23, 2015

This explanation from the MN Department of Public Safety (pdf) may help about how to clear the salvage title if it comes to that.
posted by MCMikeNamara at 12:14 PM on June 23, 2015

I was quite shocked when, after a car I bought for less than $5000 a few years prior was fairly severely damaged in a hit and run, the insurance company decided to repair rather than replace, despite those repairs having a retail value over $5000.

Your insurance company likely has an arrangement with certain local body shops that results in a lower price to them than you are able to get on your own - what costs you $1600 may cost hundreds less to them. As such, your car might not be as totaled as you think it is - this may end up being a routine claim.
posted by eschatfische at 12:22 PM on June 23, 2015

You can always rescind the claim. The claim isn't complete until money changes hands and documents are signed.
posted by Cool Papa Bell at 12:44 PM on June 23, 2015

Best answer: I ended up getting WAY more for my totaled car from the insurance company than I expected.

Yes, and that is most common. The policy more than likely states that in the case of a loss, the payout is the average retail price of similar cars sold within X date, plus sales tax (i.e. you're "selling" the car to your insurance company). That retail price would be what you pay if you bought it today from a used car lot with zero negotiation, so it assumes that you would make a nominal profit from selling the car.

I had a car totaled on me last year -- drunk guy hit my parked car -- and I was shocked at how much I got for it.
posted by Cool Papa Bell at 12:49 PM on June 23, 2015 [1 favorite]

I'm in Minnesota and I've successfully gone the salvage title route. In fact, the car I'm driving right now was technically totalled 3 years ago.
posted by neckro23 at 1:14 PM on June 23, 2015 [1 favorite]

I live in Minnesota.
You don't have to have collision insurance on a car that is paid off and worth so little. You are only required to have liability insurance in Minnesota.
posted by soelo at 1:41 PM on June 23, 2015 [1 favorite]

Response by poster: After talking to my insurance it seems like that if it is declared a total lost, I would receive the market value of the car as compensation. However they also said that they would subtract the salvage value of the car? This confuses me. Thank you for the informed responses so far.
posted by senterstyle at 1:57 PM on June 23, 2015

Best answer: They will pay you the difference between what your car was worth before the accident and what your car is worth now. Salvage value is what your car is worth now. Presumably they would only subtract that if you kept the car. If they took the car, they would not subtract it.
posted by soelo at 2:05 PM on June 23, 2015

Response by poster: Thanks everyone! I think I will proceed with my claim since I want to keep the car.
posted by senterstyle at 2:08 PM on June 23, 2015

After a fender-bender I had my insurance company wanting to total a car of mine on cost to repair it, largely due to hard to find body parts, and I didn't want to take a salvage title because the car is very low mileage and potentially collectible, and the damage was superficial despite being expensive to repair. So I took it to an independent body shop and arranged to pay for the needed parts directly. The remaining cost of actually making the repair was low enough that the insurance company paid it without totaling the car. This only makes sense if you think the insurer has dramatically under-valued your car and/or you want to avoid a salvage title -- both were true in my case.
posted by snuffleupagus at 8:51 AM on June 24, 2015

I am not sure that your insurance company is required to declare your car a salvage (I am not a lawyer, etc., etc.). See this PDF from Minnesota Department of Public Services, your car is older than 6 years old, not worth all that much, and not a tractor trailer--therefore, even if it is a total loss per insurance, I don't think they're required to declare it a salvage. It's not just about the 45$ to have the salvage cleared, it's also about all the time and paperwork and hoops you have to jump through. Also, even if you don't plan to sell the car, you can't just keep driving it as a fixed-but-not-inspected salvage forever, because you can only renew the registration once until you have it de-salvaged. So better to get it sorted out now when it only involves getting on the phone with your insurance and arguing until you find someone who knows what they're doing.

(This happened to me in Virginia, older car, but I only had liability not collision--they basically said that since my car was so old and worthless, the state didn't bother with salvage-y stuff. Also, I agree with the above about dropping your collision insurance if you haven't already, liability only is the way to go for cars that aren't worth that much anyway--our insurance agent actually called my grandparents and pointed this out to them because their vehicles were so old and cheap.)
posted by anaelith at 6:42 AM on June 27, 2015

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