Should You Take The Insurance Companys First Offer To Repair Or Total Your Vehicle
Thats a judgment call. Most people dont really know the value of their cars and therefore how much theyre owed if its a total loss. If you did not recently purchase it, you probably dont know the market for it. However, you would know if it had a lot of problems, damage, mechanical issues, and so on. If you are well-informed, and satisfied with the insurance companys first offer, then accepting it can be the right decision.
However, if you are not satisfied with the insurance companys offer, you should arm yourself with information to negotiate with the insurance adjuster.
If You Keep Your Claims Check You May Not Get Additional Repairs Done
Dont expect your auto insurance company to pay for the additional repairs later on if you cant prove the damage occurred due to the accident, says a spokesperson for Allstate.
For example, it could be that your wheel assembly was damaged and no one noticed, but continuing to drive the car caused you to ruin the front end. In such cases, your insurance company can say no to the additional cost of the repairs.
What if you have another accident and the same area of your car is damaged? Your insurance company is going to try to determine what part of the damage was from the first accident. Its not going to pay you for the same damage twice.
If you havent shopped around for car insurance in a while, consider reviewing the best car insurance companies to see if you can save some cash on your annual policy.
Should I Repair Or Replace My Car
Before we get into the numbers, its important to remember theres always a spectrum when it comes to car repairs. Meaning the math can only show you so muchlike whether youre leaning more toward a repair or replacement. Other factors, such as repair frequency and what you owe on your car, come into play as well. Keep these in mind as youre running your numbers.
Okay, time to get started. First, estimate the value of your car . Sites like Kelley Blue Book or Edmunds are good examples of resources that can help you with your estimation.* Just for arguments sake, lets say its $5,000. And your estimated repair is $1,000. Well say for this example that the repair will bring the value of your car up to $6,000. That may not be the case in every situation, depending on the overall condition of your car and the type of repair. Your mechanic should be able to give you an idea of how much value your repair will add to your car.
So in this example, if you had to sell your car immediately after the repair, youd still recoup the money you just put into it. In this case, youre probably leaning more toward a repair. Now, if this is your commuter car and youre getting to work late once a week thanks to a breakdown, it might be time to evaluate what these repairs are really costing youin terms of headaches.
Owe more on your car than its worth? Heres what to do about your upside-down car.
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Do I Need Car Repair Insurance If I Have An Extended Warranty
An extended warranty will typically cover mechanical breakdowns. Depending on the type of car warranty you purchased, it may also cover some wear and tear. But, if a tree falls on your car, for example, and busts your radiator, a car warranty will not likely cover the repair. This is where your collision and comprehensive insurance comes into action.
Do You Need The Money Morethan The Repair
There are several reasons whya person might keep the claim money rather than spend it on the repair. You maynot want to go through the hassle of car repairs, especially if it means beingwithout a vehicle for an extended period. Or if you have an older car, youmight not mind driving around with a few dents and scratches especially ifyou have a hefty check in your hand that could be used on other necessities.The auto insurer has fulfilled their obligation by making payment on a validclaim, so as long as your policy and state allow it, you can keep the money touse as you choose.
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When Your Insurer Sends The Check Directly To An Auto Body Shop
Some insurance companies wonât send you theclaim check directly, they may require that it go straight to a repair shop as a way of ensuring youâre using the money for repairs. During theclaims process, your provider may give you the option of choosing one of their preferred repair shops or picking your own.
Your provider may make it a little more difficult for you to choose your own auto body shop by requiring you to get multiple appraisals, meaning itâs usually easier to go with one of their preferred vendors. If you go with an auto body shop your provider has a relationship with, your provider will likely pay the shop directly.
Keep Saving And Upgrading
But the fun doesnt have to end there. If you keep consistently putting the same amount of money away, 10 months later youll have another $5,000 to put toward a car. You could probably sell that $9,000 vehicle for a little less than you paid 10 months beforemeaning youd likely have around $13,000 to pay for a car, just 20 months after this whole process started.
The bottom line is this: Theres a lot you could do with an extra $500 a month!
The less money youre spending on your car, the more money you have to put toward more important things, like your kids college fund, your retirement, and paying back those old student loans. Its okay to own a nice carjust dont let your car own you.
In fact, don’t let any of your stuffor even your moneyown you. You’re the one in charge here! Yesyou. If you want to learn how to take control of your money for good, give Ramsey+ a test-drive. You’ll get all the tools and all the teachings you need to make your money work for you, instead of the other way around. And right now, you can try Ramsey+ in a free trial. Boom.
*Kelley Blue Book and Edmunds are not in any way affiliated with the publisher of this content. The site links provided are for reference only and not an endorsement of any product or service. No warranty or representation is made regarding these third party sites or services.
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Car Insurance And Totaling Your Vehicle: Whats The Bottom Line
The decision of whether to declare your car a total loss or to cover the cost of repairing it will be entirely up to the auto insurance company.
While you may not necessarily want to have your car repaired after a major accident and prefer to receive a settlement check for its value immediately after the accident this decision will not ultimately be up to you.
You do have the right to have your car repaired at the shop of your choice, but the car insurance company is only responsible for paying for a reasonable repair cost for your car.
Can I Keep My Vehicle If The Insurance Company Totals It
The insurance company wants to total my car but I want to keep it. Can I? After the insurance company totals a vehicle, you can typically keep it , but youll need to repair it before you can legally drive it again.
When calculating how much it costs to buy back a totaled car from insurance, there is no direct cost to you. The insurance company will pay you the ACV of your vehicle, minus what the car would have sold for at auction.
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Can I Repair My Own Car After Filing A Claim
After a car accident, you’ll most often be dealing with car insurance claims, claims adjusters, and auto repair shops. If youre in a small fender bender, you might not even bother filing a claim with insurance. But after a car accident with damage, either your insurer or the other driver’s insurance provider is responsible for paying for the repair. It depends on who is at fault.
The insurance company will produce an estimate and suggest a local shop to do the repairs. They might pay the repair shop directly. Or, they might cut you a check so you can pay them yourself. But what if you want to do the work on your own to save a little money? Before you go this route, there are a few things to keep in mind.
What To Do If Your Car Insurance Premiums Increase
In some cases, your car insurance premiums may increase.
Re-evaluate your needs
Review your insurance needs with your insurance company. You may want to consider asking about the following options for lowering your car insurance premiums:
- raising your deductible
- dropping collision coverage if your car has a low resale value
- a package deal for insuring your home and car, or more than one car, with the same insurance company
Shop around
Shop around, get quotes and compare prices from different companies and brokers to make sure you’re getting the best deal.
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How Long Does It Take For Insurance To Total A Car
This is dependent on a number of factors including how long it take for the insurance adjuster to come up with the initial estimated value of your vehicle and first settlement offer, how long the negotiation between you and the insurance company takes, whether you engage a lawyer or not, etc. It can be a lengthy process, so the sooner you file a claim, the better.
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A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs. |
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What Happens If Im The At
If you are at fault for a crash, your own car insurance policy will cover the physical damage to your vehicle. Depending on how the damage was incurred, either your comprehensive car insurance or collision coverage car insurance will apply.
If you are in an actual accident, your collision insurance would be the way you recover for the cost of the repairs, while if your vehicle was damaged in some other way your comprehensive policy would cover the repairs.
The limits of your comprehensive insurance or collision coverage will determine how much your insurer is required to pay out on your claim. If the damage to your car is more than the limits of your policy, youll have to pay the remainder out-of-pocket.
Fixing A Car With The Insurance Payout
In simple terms yes, you can repair your own car should you wish.
It does, of course, depend on the type of insurance cover you have collision or comprehensive, as youll have a maximum cover cost to claim that would have been originally made clear to you when you took out your policy.
As long as the repairs you need to make sit within this, youre absolutely within your rights to arrange your own car repairs for fixing a car. Our legal team would always recommend filing a claim and receiving the money first, but we totally understand that you may want to get cracking on repairs if you can- especially if youre in the car repairs trade.
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My Car Was Totaled And A Rental Car Was Approved By My Insurance Company But They Are Now Asking Me To Return The Car Or I Will Have To Pay For The Rental Car Myself Can They Do That
Please consult your personal auto policy for the specifics of this issue. Typically, if the insurer has made an offer to you to settle your claim for the total loss of your car, the insurer may stop paying for the rental car. If you disagree with the total loss amount being offered, you may attempt to negotiate with the insurer for a greater settlement amount by providing supporting documentation which supports your claim that the actual cash value of your vehicle is greater than the amount being offered by the insurer. However, the insurer is not obligated to continue to pay for the rental car following an offer to settle your claim. Information about this question can be found in the Substitute Transportation section of your policy.
State Laws Regarding Claim Checks May Vary
For the most part, insurance laws in the United States are set at the state level â it’s a big part of the reason insurance rates vary so much state to state. So there may be specific requirements for how you and your insurance company deal with insurance payouts.
- For example, in Massachusetts, insurance companies are required to make the check out to the person covered by the insurance policy unless the insured person specifically requests otherwise.
- And some states, but not all, require lienholders â your lease or loan company â to be named on insurance policies and claim checks.
Double-check your state’s laws regarding insurance checks to make sure you and your insurance company are both in compliance with the law.
Editorial Note: The content of this article is based on the authorâs opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.
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When Is It Worth Paying For A Car Repair Yourself Instead Of Making An Insurance Claim
This article was published more than 2 years ago. Some information may no longer be current.
I got a brand new CR-V and misjudged a corner in the parking garage and scraped the whole side of my vehicle from front to back. How do I know when its worth paying for the repair myself instead of making an insurance claim? We really had to save to buy this SUV and money is tight. Brittany, Oshawa
If you make an insurance claim to save yourself from a financial scrape now, you could end up spending far more on insurance premiums down the road.
Loosely speaking, if the cost to fix is under $2,000, it can be touch and go to claim it and if its over $2,000, its worthwhile most of the time, says Adam Mitchell, president of Mitchell and Whale insurance brokers in Whitby, Ont. But step one is an estimate you need to know how much the claim is for.
First, check if you have collision insurance which isnt required although youd have to pay the deductible, which is typically $1,000.
If you have a $1,000 hit and a $1,000 deductible, then youre not saving anything by making a claim, Mitchell says.
Additionally, if you have an at-fault crash even if its just between you and a parking lot corner your insurance company can use it to raise your rates, even if you dont actually make a claim.
The rate escape?
But making that claim now could impact your rates later, especially if youve already had accidents.
Faulty reasoning?
Home Repairs May Be More Complex Than You Think
There have been plenty of homeowners who overestimated their home repair skills. You might have experienced a small problem with your home. You get a $10,000 check from your insurance company. You laugh and think that all you need is a trip to Home Depot and a few weekends of your own time to fix the problem.
The next thing you know, youve made the problem significantly worse and are spending more than $10,000 for a team of real professionals to repair the issue.
The fact is: home repairs are more complex than many people realize. Many homeowners undervalue the work required to restore their home to pre-loss condition.
If you underestimate the amount of work that needs to be completed on your home, then your insurance company might provide a smaller check than you need or deserve. Thats why its always a good idea to get an independent assessment after significant losses or damages on your own home.
If you have questions, want help with determining the proper cost to repair or any other aspect of your insurance claim, a state licensed Public Adjuster can provide expert assistance. Simply get in touch for a free consultation and we would be happy to help.
If You Dont Fix your Home Today, You Could Sacrifice Future Claims
Theres one final thing to note about pocketing the difference on homeowners insurance claims: if you dont fix the problem correctly today, then you could be sacrificing future claims on your insurance policy.
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Think About Your Options
Just because you can use the insurance money for something other than repairs does not mean you should. Your insurance company will not permit you to file a claim twice for the same damages. If you try, you could end up in jail for insurance fraud. You only have one opportunity to use the money you receive to fix your vehicle. If the car accident rendered your vehicle inoperable, think about the repercussions of not using the money to get it fixed. You could be out of a car and unable to drive to work.
Failing to fix your car could also diminish its resale value. As the owner of the vehicle, this could ultimately hurt you by reducing the amount you could get if you were to sell the car in the future. Unrepaired damage could also be a safety hazard. Even if your vehicle still operates, the auto accident might have damaged something that could eventually cause a more serious breakdown. The damage could be worse than you initially thought. Get all the facts on the damage to your vehicle from a licensed mechanic before making your decision.
