insurance Answers (LONG)

Fri Feb 9 00:16:27 EST 2001

After reading this myself, it sounds like I am being cold.  Please understand that I am just trying to be clear about the facts as I understood them a few years ago (possibly in a land far away). WA state

Insurance is a contract between you and your company.  Since nobody that I know of reads their policy, it is important to have a good agent.  A good agent is VERY valuable.  Insurance is also a business, they have to make money.  You can shop around, but you pretty much get what you pay for.  You won't find a company with cheap rates that will restore your car if in an accident.  Buying or not buying insurance is gambleing on your end (usually not a choice), but is just understanding averages for the company.  Most people will pay more into insurance than they will ever get out, but accidents will happen and they will happen to somebody, and there are many claims that exceed more than most of us will ever make. Buying full coverage is a choice and the odds are in your favor not to buy it, but there are advantages to full coverage even when hit by an insured driver when your company won't have to pay anyway.  They will argue your side for you.
  Almost all insurance contracts say that if the car is damaged that they will pay to have it repaired to current industry standards.  This means that while only one panel on your car may be damaged that they will blend the new paint to match your old paint.  This process is not perfect and due to changing technologies and materials that the new paint may age differently than your old paint which results in an imperfect match. You cannot demand they paint the entire car so it all matches perfectly again.  You can usually demand they not use aftermarket parts, but this depends on your policy (some state in it that you will accept them).  Custom paint and expensive stereo's are usually not covered as they have policy exclusions. 
  Most all policy's state that if the cost of repair is too high compared to totaling it then they will pay ACV (actual cash value).  This is not a perfect system either, but it was your choice when you bought your policy.  This was explained to me as what a willing seller would sell it to a willing buyer, with neither committed to buy or sell to that particular individual.  So your car was not for sale and you have memories of making your first kid in it.  This has no effect on ACV, neither does parts and pieces at home.    Spending $10,000 to perfectly restore or modify a pinto, chevette or whatever will raise its ACV, but by how much is the question.  Certainly this does not make it a $10,000 whatever.  As they have to pay on ACV, they have no obligation to replace your vehicle with a similar vehicle.  Maybe you have spent $10,000 maintaining your vehicle.  Maintenance is generally regarded as keeping your vehicle in sellable condition.  At best it is in excellent condition.  Modifications are also a touchy subject. I am sure we all know that in almost every case we would be better off if we could have spent all the money that we spent modifying our cars on a more expensive model.  Many times a buyer would rather buy a stock vehicle so they know what has been done to it.  Or that particular brand of modification is not what they want etc, I think you get my point.  How much does the modifications really add the  ACV.  If you have spent enough $$ on your vehicle to really change it from what it was (kit car, etc.) you likely have voided your contract as what they are insuring is not what you are driving.  So the underlying question is, what do you really think you could have sold your car for just before the accident?  If this is not close to what is offered, then you have some choices.
  They use several guidelines to establish ACV.  Generally they start with a book (NADA, Kelly blue book, etc.) figure realizing that ALL books have errors.  Next they try to find comparable vehicles which are as similar as possible to yours.  They might also talk with dealers to see what your particular vehicle is currently selling for.  This is generally a waist of time as dealers don't want to talk to you unless you are buying and generally they just look in the book.
  Here is your best opportunity.  You establish an ACV on your own, usually finding comparables is the one that is least arguable.  But remember that just because a car is for sale for a certain amount does not mean that it will sell for that amount; however since advertised vehicles are there to sell, the price is close.  A car with a lot of modifications is very hard to find a similar one for sale.  You generally have the advantage of time, as they want to clear the file and can't until they settle, holding out can help a little.  Hiring an independent appraiser or going to arbitration is what most policies require when an ACV can't be settled on.
  In my opinion, if the person had any thoughts of selling then they are better than to have sold it themselves, but if it wasn't for sale, then it is a loss.   Dealing with somebody's insurance company as a claimant can also be a major pain as they do not have a contract with you.  This is one of the best reasons to have full coverage.  That way if you are involved in an accident that is not even your fault, and the non-premium company is hassling you, or if fault is not clear, you can turn it in on your policy and have your company backing you, or at least paying for repairs to your car and then they will go after the other company.
Most of my cars are in good condition and cars with historically poor values.
Try driving around a nice 84 4kq with 260k miles, tell a buyer of the mileage and you can't pay them to look at it.
Or a Fiero with an uncommon motor swap.  I love it as does every 3.4TDC owner that I know of, but what can I sell it for? and how much does this add to it's value. Both are for sale, but not at prices that they are likely to sell. Try contemplating about both of these as most of those who receive this will like one or the other. 
  The best option is to buy a policy that understands your value of your specific car, but be careful as far as I know a stated value policy is the best option, you both need to argue the value up front and may still need to argue the value after.  Make sure you understand the policy, best is to have a good agent.
  Best bet on a modified car is to buy it back and start over (hopefully mods are undamaged).  
  When all else fails be thankful that you have an insurance company to argue with!  Last year two 8 yr olds playing with matches burnt down my storage building.  Inside was my first car (75 Mustang II) which I had done everything to, including a high perf motor swap. (Ok, so I don't have much room picking on pinto's)  A 1979 Honda CBX  (inline 6cyl 24 valve MC) in perfect condition including $200 set of K&N's and $600 set of European lowering bars and rearset pegs (which is still desirable and near unobtainium now). Here is a link to a CBX page, mine was same as top pic except mine was factory "candy glory red" http://www.compusmart.ab.ca/nplooy/cbx/  A ski boat, 75 CJ series Jeep and many Audi parts.  I thought it was safe, just in storage with no power to the building and locked very well.  I did not have insurance on anything including the building.  One of the boy's was living with grama because dad was in Jail and the other has 3 brothers from three other dads and is being raised by mom on welfare.  I wish I had an insurance company to argue with!  Next month I will be in small claims court attempting to place a $2,500 judgment on the first of the parents as that is the max that small claims will allow and it will cost >$1500 to go to higher court just so I can squeeze a turnip.  I may not get blood, but I will squish these turnips for all they are worth.

  I am tired and will try to add any other common questions/misconceptions/problems.
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