Car Totalled, Insurance Offering Crazy Low Amount

[Mackenzie Click-Mickelson]

Our son was hit and our 2014 Camry SE was totalled. Insurance values it at $11,000, about half of what we bought it for 3 years ago. Edmunds shows $17,000 but they do not use that. We cannot replace it for anywhere near $11000. What should we do?

Well one thing is ask what they are using to get the value and request documentation that reflects it so that you can better understand the offer they are have for you. Just because you say Edmunds shows $X doesn't mean that's what they are actually using to get their figure.

The adjustor agrees it should be higher but says they use third party to set amount. Adjustor says it should be near NADA which is about $16000. He acts like he agrees with me, but doesn't seem to be movitated to fight for us. Maybe passing buck to third party whatever that is?
Toyotas are know for holding value, so I don't think cash value has decreased over $10,000 in three years.

It's doubtful the claims rep is just passing the buck but it could be rules that they are following.

I live in Chattanooga, TN. They have found one car in Nashville and one in Atlanta for almost 15,000, so they raised the offer to almost 13,000. Similar cars here are about about 16500. Do I have to drive a couple hours to get a car that might not be the color or type I want?

Well that's good news you got a higher offer

Did they look in a 200 mile radius and base my value on the cheapest cars they could find?

In most cases insurance companies (not just auto) will look for the lowest priced item. It's like getting multiple quotes for things--most times you're going with the lowest cost one. Similar things occur with insurance companies. It's not in a bad way it's just they do need to look for a variety of options.

Here is my frustration:
The same cars in my city are priced a few thousand dollars higher. So they found a couple in bigger cities with more competition at a lower price. I don't care to drive there when I can buy here. On Edmunds search I find 30 2014 SEs. The cheapest three all have way more miles yet are all around 14,000. Adjust for the mileage diff, add sales tax, and subtract deductible and we are still a couple thousand off. That's using the cheapest ones.

Again what is the insurance company using for their price?

Also have you taken a look at your policy contract (sometimes referred to as a policy back)? It should tell you how your vehicle is insured (which is usually actual cash value). This might be a good opportunity to do so. Each company is different and each auto product is different but it's what's in your policy contract for your actual policy that dictates how things are settled.

You do have the right to reject or counter offer sure. One of the biggest complaints I would hear from insureds (used to work in the insurance industry just mostly with agents rather than insureds) is they felt their X,Y,Z was worth more and truth is it was rare that they were actually correct on the exact amount (of course counter offers with reasons why should be discussed) This happened with totalled cars but also with things like how much to insure a home (such as difference between market value and reconstruction cost value).

 

[tasha99]

Again, please don't misunderstand me...I don't know your car...options, mileage, etc...just trying to give you insurance company perspective. Here's a car like you describe...a 2014 Camry SE with reasonable miles. Asking price is $11,000 at a dealer (again, they'll give you slightly less because they don't owe you dealer profit margin). It's one owner, no accidents.

https://www.autotrader.com/cars-for-sale/vehicledetails.xhtml?listingId=460174241&zip=37405&referrer=/cars-for-sale/searchresults.xhtml?zip=37405&startYear=2014&sortBy=derivedpriceASC&incremental=all&firstRecord=0&endYear=2014&modelCodeList=CAMRY&makeCodeList=TOYOTA&searchRadius=100&trimCodeList=CAMRY%7CSE&startYear=2014&numRecords=25&firstRecord=0&endYear=2014&modelCodeList=CAMRY&makeCodeList=TOYOTA&searchRadius=100&makeCode1=TOYOTA&modelCode1=CAMRY

If that example isn't right, no problem. Like I said, just trying to help.

I don't think 86K miles on a 3 year old car is typical. It's the kind of mileage I put on my car, but don't most people drive more like 12-15K a year? This is more than twice that. Camrys in my area depreciate slowly so this would be a lowball offer here. I did see one locally that is also around 12K, but it has 110K miles on it.

 

[Klayfish]

It's more common than you think. You're right, the "average" is 12-15k, but that includes people who only drive 5k/year, so it averages out. The car could also be 4 years old by now...2014 models would have been for sale in August of 2013.

Camry's depreciate at a fairly decent clip, as do Accords. Not as fast as their "American" counterparts, but still fast enough. The family sedan market has gone into the tank because everyone thinks they HAVE to have an SUV, plus the used car market is soft right now.

 

[Mackenzie Click-Mickelson]

It's more common than you think. You're right, the "average" is 12-15k, but that includes people who only drive 5k/year, so it averages out. The car could also be 4 years old by now...2014 models would have been for sale in August of 2013.

Camry's depreciate at a fairly decent clip, as do Accords. Not as fast as their "American" counterparts, but still fast enough. The family sedan market has gone into the tank because everyone thinks they HAVE to have an SUV, plus the used car market is soft right now.

My sister-in-law works for GM and without a doubt they have had major issues selling sedans. The plant she works at makes the Malibus and they have too much inventory. People want trucks and SUVs (along with crossovers) more than they used to.

Now in the next few months who knows what will happen with both the used car market and the sedan market with hurricane Harvey aftermath.

 

[tvguy]

It's more common than you think. You're right, the "average" is 12-15k, but that includes people who only drive 5k/year, so it averages out. The car could also be 4 years old by now...2014 models would have been for sale in August of 2013.

Camry's depreciate at a fairly decent clip, as do Accords. Not as fast as their "American" counterparts, but still fast enough. The family sedan market has gone into the tank because everyone thinks they HAVE to have an SUV, plus the used car market is soft right now.

We have to have Smog checks here in California every 2 years and they record odometer reading then. Here in car crazy California the average is 11,500 mile according to the Smog Check folks. Which make sense since 12,000 miles is the point most insurance companies boost premiums for above average driving and is also the mileage mark that Kelly Blue Book and other car value rating services use to start lowering value. My mom drove 3,000 miles a year when she was commuting to work, it dropped to 1,000 miles a year when she retired, so 5,000 miles may be a high low mileage number. I have too many cars, 5, and 2 of them get less than 3,000 miles a year.

 

[4HOLIDAYS]

Wht exactly is "actual cash value"? I understand replacement value, the cost to buy a similar car to the one that is totalled. I don't understand, are they using a wholesale price as "actual cash value"? I see the responces of a couple companies that provide this number but what do they base that on?

 

[North of Mouse]

Our son was hit and our 2014 Camry SE was totalled. Insurance values it at $11,000, about half of what we bought it for 3 years ago. Edmunds shows $17,000 but they do not use that. We cannot replace it for anywhere near $11000. What should we do?

OP, I feel for you. When our vehicles are taken care of, they are usually worth more to to us than the amt. that they will give for a totaled car. I was stressed a few years ago when my 2005 Suzuki XL-7 was hailed on while we were towing it on vacation - was so worried they wd. just total it.

Thankfully, they fixed it perfectly. We haven't had one issue with it - 13 years old, 91,000 mi. If mine is ever totaled I will be devastated - it's worth so much to me - probably only about $3,000 tops in ins. value.

Heck, I've bought over 80 cars in my personal life and have literally bought from all over the country (had cars shipped from AZ to PA).

Sorry, this just struck me funny when I read it!! Wondered if you actually get a different vehicle a few times a year!

 

[OhhBother]

I'm assuming you didn't buy gap insurance when you purchased the car? We bought it from the dealer. Just mentioning it on the slim chance you could have forgotten.

 

[LYSE]

I'm assuming you didn't buy gap insurance when you purchased the car? We bought it from the dealer. Just mentioning it on the slim chance you could have forgotten.

X2 if your still paying on it and risk oweing the difference.

Op post what the mileage was to let the folks here help out.

Also look Into buying it back salvaged the repairing your self ..could be worth your time.

 

[Klayfish]

Wht exactly is "actual cash value"? I understand replacement value, the cost to buy a similar car to the one that is totalled. I don't understand, are they using a wholesale price as "actual cash value"? I see the responces of a couple companies that provide this number but what do they base that on?

Actual cash value means the value of the car in a private party purchase. So if you were to take your car and sell it privately, that's "actual cash value". How it's determined by the insurance company depends on the company. There are several different methods approved by state Departments of Insurance. Most companies use one of two or three different vendors, one of which is the "thousand pound gorilla" in the industry. They look at a ton of factors...regional prices, mileage, condition rating of the car, historical sales, local comparables (if available), etc... Actual cash value typically comes out to be slightly under what dealers ask for on their lots, as the insurance company doesn't owe for dealer profit margin.

Sorry, this just struck me funny when I read it!! Wondered if you actually get a different vehicle a few times a year!

Actually, typically yes. It tends to come and go in spurts. I typically have at least 2 cars, there were times when I had 5 or 6. I've had a very wide range of things...from cars I literally got for free or $100 all the way up to some very expensive cars...though now with 3 kids, the car budget is much smaller. I've had my current daily driver since last June and my "toy" since February. Plan to change both by the spring.

 

[Denise W]

Wht exactly is "actual cash value"? I understand replacement value, the cost to buy a similar car to the one that is totalled. I don't understand, are they using a wholesale price as "actual cash value"? I see the responces of a couple companies that provide this number but what do they base that on?

Actual cash value at my company was described as Replacement cost minus depreciation. It was also described that way in every insurance course I ever took.
Denise

 

[MomToOne]

In my zip code, Edmonds values a standard equipment 2014 Toyota Camry SE with 60K miles, clean condition for $13668 private party sale. And that's the larger 3.5L engine version - it goes down to $12000 for the 2.5L engine.

My zip code may be very different (Northern California) but like others are saying, I suspect 13K is getting close to right. I'm sorry you paid double 3 years ago but that's the nature of cars unfortunately - they depreciate significantly those first few years.

 

[North of Mouse]

Actually, typically yes. It tends to come and go in spurts. I typically have at least 2 cars, there were times when I had 5 or 6. I've had a very wide range of things...from cars I literally got for free or $100 all the way up to some very expensive cars...though now with 3 kids, the car budget is much smaller. I've had my current daily driver since last June and my "toy" since February. Plan to change both by the spring.

All I can say is 'wow'!!

As you can see from my post, I'm an extreme opposite!! I get a new vehicle and keep it (if it's like the perfect one I have now)!!(it helps, too, if it's a perfect 4 wheel down/4 whl. drive tow for our motorhome). Dh, on the other hand, gets a new one on average of 3-4 years. Ours are garaged and kept mint by my dh.

 

[supersnoop]

Actual cash value at my company was described as Replacement cost minus depreciation. It was also described that way in every insurance course I ever took.
Denise

Isn’t that irrelevant when it comes to cars? Replacement value is the same as cash value because replacement value includes depreciation.

That terminology may be appropriate when discussing a roof replacements. A 30-year roof that you’ve had for 20 years will only be worth 10-years actual cash value, even though you can’t replace it for that amount. But the concept doesn’t apply to a car.

 

[lost*in*cyberspace]

This is why my husband and I bought gap insurance when we recently purchased a new car.

 

[Klayfish]

Isn’t that irrelevant when it comes to cars? Replacement value is the same as cash value because replacement value includes depreciation.

That terminology may be appropriate when discussing a roof replacements. A 30-year roof that you’ve had for 20 years will only be worth 10-years actual cash value, even though you can’t replace it for that amount. But the concept doesn’t apply to a car.

It's sort of semantics, but yes. You can't buy a used roof, so on a homeowners property type claim (like a roof) insurance will determine the cost of a new roof and take depreciation. For cars, you can buy them used. So if you total a 2014 Camry, they don't look at the cost of a 2017 Camry and take depreciation. They look at the prices of 2014 Camrys. But the concept is similar...based on depreciation. Clear as mud?

This is why my husband and I bought gap insurance when we recently purchased a new car.

Gap coverage doesn't cover OPs situation. It won't pay the difference between what insurance pays and what you feel is the actual cash value. Gap coverage covers you if you owe more on your loan than what the actual cash value of the car is. This happens most often when people roll over prior loans, put little money down, or buy a very quickly depreciating car (American cars, German luxury cars). Unless OP owes more than the car is worth, gap wouldn't have helped here.

 

[Mackenzie Click-Mickelson]

I'm assuming you didn't buy gap insurance when you purchased the car? We bought it from the dealer. Just mentioning it on the slim chance you could have forgotten.

Gap insurance may not even apply based on the restrictions the insurance company has. The previous company I worked for it was max of 2 years of coverage with specific mileage requirements.

It's intended for new cars because you depreciate the moment you drive it off the lot. It's not intended for years and years worth of coverage for depreciation just for the few years directly after buying a brand new (i.e. not previously owned) vehicle when you would be upside down in your loan (owe more than the car is worth due to depreciation).

The OP would have to look up the terms and conditions of the gap insurance if they purchased it. Terms could be different if bought from the dealer vs bought from the insurance company.