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Tree fell on my car, windshield smashed. Other than that I can drive it, I can still get in and drive it around (obviously with limited visibility) had to wear extra protection so I wouldn't get cut. Other than a few dents it looks good to me.

Insurance guy comes around and tells me my car is "totaled" and they won't pay for repairs but they will pay for a replacement car. I was going ballistic, but I couldn't pay for repairs at that time so what else was I going to do? Insurance was Geico.

Long story short I bought my car for 25k 5 years ago and they gave me 13.5k now. Then some how by magic I see my car up for sale at a dealership much later up for 18k. I know it has to be my car, it's identical and the mileage is around the same as well.

What the hell? Is that some sort of insurance company tactic, because it feels like a scam to me. Why not give me a few thousand dollars for repairs instead? Anyway hindsight is 20/20, I should've known better.

Just wondering what you think about this.

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    #1 What was the KBB value of your car before the accident? #2 Did you check the VIN on your alleged car? #3 "Sticker price of $18K" does not mean "sale price of $18K".
    – RonJohn
    Aug 9 at 14:48
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    "Totalled" also doesn't mean undriveable. It just means the cost to repair (if possible) is more than the value of the car. Your insurance company is within its rights to pay you the value of the car and move on. You probably could have kept driving, but you'd have to find someone else to insure it (and that someone else would absolutely want to know about the tree that may have damaged the frame beyond safe repair).
    – chepner
    Aug 9 at 14:54
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    Even if it is your car, just because they are selling it doesn't mean they should be selling it. (My parents once bought a used car that developed engine problems in under a year. Their mechanic discovered sand in the engine, and a title search revealed the car had been in New Orleans during Hurricane Katrina.)
    – chepner
    Aug 9 at 14:56
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    Did you get an estimate on the repairs? Do you know for sure it was only a few thousand dollars? This doesn't at all feel like a scam to me.
    – JohnFx
    Aug 9 at 15:26
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    @David258 The used car market is insane right now in the US for a variety of pandemic-related reasons, so stuff is actually selling for higher than I would normally expect. google.com/search?q=us+used+car+shortage Aug 10 at 15:46
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It does not sound like a scam to me, and actually quite normal.

Assuming you did not overpay for the car, receiving 50% of the purchase price for a 5 year old car is pretty generous. If you actually paid 25K, that would include sales tax and licensing fees which are not covered in the event of a totaled car. So really that is a good settlement in most cases.

Settlements can often be increased by working with the adjuster with certain circumstances. For example if the tires were pretty new you can often increase the settlement amount by some pro-rated value based on the purchase price.

While you cite the windshield being damaged, the frame of the windshield may have been bent which would have cost the insurance company a lot to fix. They may have totaled the car to avoid liability, which sounds reasonable.

Once a car is totaled the insurance company will sell the car for salvage. This is typically in the $500 range. What happens then is beyond the insurance company's control.

You can verify this is your car by checking the vin numbers.

A junk yard may have bought the car from the insurance company, repaired it, and then sold it to a car dealership. That car dealership has to sell the car with a salvage title. Someone may be willing to pay 18K for it.

I do not know why you say "hindsight is 20/20". I am not sure what you would have done differently. In fact, if I was in your shoes, I would be happy with the settlement.

In the end, it is important to understand that cars cost a lot to own. It is very easy to lose significant wealth on the ownership of a car. Here you hit on several factors that causes one to lose money. First and foremost is depreciation. Second is replacement and the costs associated with that (finding a car, paying taxes and licensing all over again, dealing with car salesmen). If you had a relatively full tank of gas, that cost you about $40 alone!

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    Thanks for this great answer and for not being toxic and rude like the other folks. I said hindsight 20/20 because i was thinking I should just save the car and get repairs when I could and then sell it myself, I'd get more than what the insurance gave me
    – user760783
    Aug 9 at 16:15
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    Even better you could have collected the insurance money (less salvage value) and kept the car. I had a car totaled from being rear-ended that I continued to drive for a while because other than the non-functioning trunk hatch it was fine. Hail damage can easily total an older car and is purely cosmetic in most cases, I know a few people who happily drove their dimpled cars around for years.
    – Hart CO
    Aug 9 at 17:15
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    @user760783. You said you did not have the money, so you couldn't repair it. Okay something to work on is having a healthy savings account. Could you have repaired it to a safe condition for a few thousand bucks? Maybe, maybe not. In the end your life is worth far more than saving a few bucks.
    – Pete B.
    Aug 9 at 18:26
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    @BillyC.: Depends on your insurance policy: If you offer to pay a higher monthly fee, I'm sure your insurance company will be more than happy to cover additional costs as well.
    – Heinzi
    Aug 10 at 11:11
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    If the car was repaired, the dealership will likely be selling the car with a rebuilt title. It's not legal to drive a car with a salvage title in some (most/all?) states.
    – Herohtar
    Aug 10 at 20:23
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The company is supposed to "make you whole". Since they decided the car was not worth repairing, they should have given you enough money to buy a comparable car of the same age and wear & tear. (not counting the effects of the insured accident).

It sounds like they gave you printed "Blue Book" values based on the average market value of the car. However, there are actually 3 "Blue Book" values:

  • What a dealer will pay a citizen for their car
  • What the car typically goes for in citizen-citizen private sales
  • What a dealer will typically sell a car for.

And there can be a large spread - as much as 20% - between each number.

Further, COVID greatly disrupted the world supply chain, and most automakers implemented Just In Time improperly, so new car deliveries are a disaster. This has caused an unusual "spike" in car prices - new and used.

Given the car value spike, I'm not surprised somebody fixed up that salvage car, probably doing work considerably below insurance company standard.

So you are comparing two different things: The "normal, private sale" price the insurer should have paid you... versus the "dealer sell price + COVID markup" price you see at the dealer today.

I wouldn't worry about it. I would get out there and buy a replacement car, either the same model year as you had before in similar condition, or something else that suits your fancy.

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    Always, always, argue with your insurance company over the settlement. Look for cars online of similar age, quality, equipment, etc. to yours and use them to argue for a higher price. You can almost invariable get a significant increase in payout by doing this. Aug 10 at 11:46
  • @JackAidley concur. Insurance is not your friend or partner. They are an enemy, an opponent in this.
    – Criggie
    Aug 11 at 22:40
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    The insurance does not need to make you whole. It's pretty clear that they have no incentive and no contract to do so. What they can and must do is one of A. Pay for repairs to covered damage, or B. Pay for the vehicle at the agreed price. That agreed price is the cost of a comparable car
    – Nij
    Aug 12 at 6:47
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The only possibility of scam here is if the car being sold at the dealer is indeed your old car and it does NOT have a salvage or rebuilt title.

When a vehicle is "totaled" you have the option to sell the vehicle to the insurance company in return for an agreed upon payoff. You received that $13.5K and you presumably gave them the title. The insurance company is not in the business of rebuilding cars so they sell them to outfits that do and that is almost certainly what happened here.

Once the car was restored it was likely sold at auction to the dealer who has now placed it on their lot. In nearly all cases, however, a "totaled" vehicle must be flagged as "salvage" or "rebuilt" so that the buyer knows that this was totaled at one time or another. In most US states, making the "salvage" flag disappear is a crime. Once it's there it should stay there.

You did not have to "sell" the vehicle to the insurance company and you could have negotiated another deal that allowed you to keep the car in return for a different payout. Often something like the $13.5K - the salvage value would be the case. Then you get the money and the wrecked car and NO salvage title. You can fix your car, have it fixed, drive it like it is, whatever you want. It's all yours.

Generally insurance companies want to settle quickly and most insured parties want to just put it behind them as soon as possible. Likely this is what happened in your case, they did not necessarily point out all your options although I suspect they were clearly spelled out in your settlement agreement. You did read the fine print, right??

At this point the deal is done. You got the money, they got the car, it's been fixed and it's now for sale. You could buy it if you want but you'd have to pay what the dealer is asking or what you can negotiate it down to. But it's no longer your car and likely no scam has occurred.

On the idea that a "few thousand dollars" would have done the trick is a common misconception. You'd be surprised how little damage it takes to get into the "totaled" category. All insurance companies have their own rules on this but let's say if the estimated repair cost exceeds 60% of the value of the car, they deem it totaled. You could have requested more details on how they arrived at their numbers but you appear to have skipped doing that.

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    "drive it like it is" assumes that it would pass inspection. The rules of inspection differ by location. Aug 9 at 17:36
  • 3
    Agreed, that assumes that the car is road-worthy as it is. A broken windshield is almost universally unacceptable. We really don't know how bad it was beyond the OP description.
    – jwh20
    Aug 9 at 17:37
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    I agree, I messed up on many aspects, wasn't thinking clearly. Now I'm airing out my frustration because of my own stupidity.
    – user760783
    Aug 9 at 18:05
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    An artful Google search will help you consider your options, next time. I just searched "totaled value too low" and got a number of helpful articles on the first page of Google results. Aug 9 at 23:33
  • It's unlikely that a lien holder (the company that financed your car loan) would agree to letting you keep the car and do the repairs on your own in this situation. Aug 11 at 20:44
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Being skeptical of your insurance company is not unwise, they exist to turn a profit, not to make your life easier. However you should not implitictly trust a used car dealer either.

Dealers often inflate sticker prices so that they can offer generous trade-in payments on clunkers, and "free" finance, ask the dealer what the cash price is without a trade-in.

Expect a figure much closer to what you were paid.

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Long story short I bought my car for 25k 5 years ago and they gave me 13.5k now.

You received more than 50% of your purchase price for a 5 year old car? You only got scammed if the KBB value was significantly higher.


I see my car up for sale at a dealership much later up for 18k.

Yes, always grossly haggle a used car's price when you're shopping around.

If you can confirm that this is indeed your car then you can consider offering the dealer $5k for it but be prepared to be denied since they know they can get much more in the current market especially if they fixed the cosmetic issues.


If you think your car was good enough to drive then you could have talked to your insurance to deduct the salvage price from the payout and keep your vehicle. I know more than one person that has done this.

This seems to be main salt in your wound since you were not aware that you can do this.

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    OP got scammed regardless of whether KBB was significantly higher unless OP can be "made whole" with the amount received, which seems unlikely. Just because the vehicle in its age and condition would have been sellable to someone else at the insurance-assessed value does not mean OP can be made whole for that amount. Part of the value of a vehicle is non-transferrable: knowledge of (and trust in) what is and isn't wrong with it. If OP buys another person's used vehicle "comparable" to theirs on the market, they have no way of knowing it won't have hidden expensive problems. Aug 11 at 16:04
  • @R..GitHubSTOPHELPINGICE If a thing is non-transferrable then it has no value in the market - how a thing you can't buy or sell has any meaning on an exchange of goods? In the same vein you can never be certain if the car you're buying has expensive hidden problems, the person buying your car has no meaning of knowing the same. Thus, that knowledge is, unfortunately, effectively valueless.
    – T. Sar
    Aug 11 at 16:25
  • @R..GitHubSTOPHELPINGICE Assuming the car is fully paid then you can forgo comprehensive insurance since you feel it doesn't help. Besides this how do you recommend the insurance company handles the situation?
    – MonkeyZeus
    Aug 11 at 17:27
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    @T.Sar: That's exactly my point. The knowledge only has value to you because you're the only one who can trust it. But the insurance company cannot make you whole by only giving you enough money to buy a car for which you don't have that knowledge. They can only do that by repairing your car, buying you a new car equivalent to the one you had (assuming that you can trust a new car not to have hidden problems) or offering a warranty for any car you buy that has unexpected problems. They are almost surely not going to do any of that. Thus my claim that "totaled" is a scam. Aug 11 at 18:04
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    @R..GitHubSTOPHELPINGICE You seem to be implying that if I crash my 20-year-old junker badly enough that it's irreparable, the only reasonable thing an insurance company could do is buy me a new car. That's pretty ridiculous. Never mind that you can't be sure your car doesn't have hidden problems, either.
    – Chris
    Aug 11 at 19:22
5

This is what often happens to "totaled" cars. Totaled just means repairs will cost more than the car is worth. It's then sold to someplace that can do the repairs necessary that then sells it to a dealer that either they work with all the time or another one that is an arm of their business.

In order to make it legal, they will have to have it inspected and from then on it will have a "Salvaged Title," which makes it harder to sell.

(I was once rear ended, and pushed into the car in front of me. The car was almost drive able, but really needed repairs, especially in the front. The ins co told me it would be totaled, and then they sent me a 8 page report on how they determined the value of the car. It was based on several other of the same model and year cars being sold in and around my area, some with photos. It showed the condition of these cars, as well as their mileage. A couple of them I was able to find on line. They also told me the amount they would pay me if I wanted to keep the car and explained that if I fixed it it's have a salvage title. They offered me easily what I thought it was worth before the accident.)

3

Insurance company scammed you by not clearly explaining that you could take something like 75-90% of the "totaled" value they were offering without handing the car title over to them. You could then have taken your $10000, spent $250 replacing the windshield, and pocketed the $9750.

Of course that's assuming there wasn't other damage that actually needed to be repaired. If so, the cost might have run up to a few thousand, but you'd still come out ahead.

Also you could have fought with them over the value of the car to get the initial offer up a good ways before declining to hand the title over. Then you would have come out even more ahead.

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    There is one catch to that: The insurance company will now consider the car to be worth nothing. So you can still get insurance coverage for liability, medical, etc. but you will not have (they won't sell it to you) insurance for the car itself. In other words, any future accidents will be on you to repair, totally at your own cost, whether a fender bender (that you might get somebody to hack into place for $100) or another tree or something worse. Aug 10 at 17:09
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    @manassehkatz-Moving2Codidact: Indeed - you could either save the remaining cash for that, or shop around for new insurance. New insurance might decline to insure the vehicle if they share information that it was previously totaled, or they might request to do an inspection of the vehicle prior to insuring it to assess the value. But once they've agreed to insure it, they'd be liable to pay for any new damage up to the assessed value. Aug 11 at 14:52
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    A lot depends on how much it really costs to repair. Which depends on a few factors: how much cosmetic repair can you skip (e.g., scratches & dents that don't affect safety), your local regulations (some jurisdictions require yearly or every other year safety inspections, some only when a car is sold), how much can you get done at a discount rate (which can be for a variety of reasons). My hunch in this case is that it isn't $250 windshield vs $10k everything but more like $250 windshield + "some amount to deal with bending frame, etc." vs. $10k. And if you are OK with a mismatched junkyard Aug 11 at 14:57
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    hood instead of an OEM perfectly painted replacement, etc. then you can get it done for a lot less than the insurance company will pay and have some leftover. But the car won't, at that point, be truly worth the value that it was pre-crash. A lot of variables involved... Aug 11 at 14:58
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Did my insurance company scam me when they paid less for my car than I saw it selling for at a used car dealership later?

No.

When a vehicle is damaged in a manner covered by its insurance policy, the very first thing that happens is that the insurance company assesses the vehicle to determine whether repairing and returning it to you is going to be worth it to them, based on your policy's value.

If the answer is no, the insurer deems the car as "totalled" and auctions it off for whatever they can get for it. "Totalled" therefore does not mean the car is undriveable or only fit for scrap, it's merely a value judgement made by the insurer.

What happened in your case - and what happens in many cases - is that someone viewing the auction for your former vehicle saw it, determined it could probably be repaired, and bought it. They were then indeed able to repair it, after which they sold it to the used car dealership.

It's important to understand that the person who bought your totalled car was taking a calculated risk. If they're correct, and the repairs are relatively minor, they will make money by repairing it and selling it on - as seems to have happened in your case.

But - and here's the kicker - if they guessed wrong, they will lose money on your vehicle. And there's nothing protecting them in the case that happens. Since the only thing the buyer has to go on when viewing the car at auction is a short description and images (since most vehicle auctions are conducted online nowadays), there is always a chance that there is something catastrophically wrong with the vehicle that they simply won't know until they get it into their shop and tear it down. A good example is the vehicle's frame - it's the most vital part and as such damage to it is often fatal, but it's also the most difficult to properly inspect.

Additionally, being deemed totalled has significant implications for a vehicle in terms of selling it on. A totalled vehicle is technically supposed to end up in a scrapyard, so if someone does end up repairing it, the vehicle actually has to be sold differently (salvage title) - prospective buyers are required to be informed that it was totalled, and as such there may be (potentially dangerous) defects that the repairers didn't discover.

For the insurer, that potential for undiscovered dangerous defects is a massive risk. If they repair your vehicle and return it to you, and you end up in an accident where it can be proven that an issue from the previous accident and/or the repairs conducted for said accident caused you injury or death, the insurer will be on the hook for a potentially crippling lawsuit.

At the end of the day, insurers are risk-averse. That's why they don't do a particularly thorough assessment of the vehicles they deal with, certainly not to the point of stripping the vehicle down. Their assessment is very much a "is this going to be quick and cheap and safe to repair?", and if not the vehicle is going to end up as totalled.

Does this mean insurers end up marking many perfectly repairable vehicles as totalled? Yes, and that hurts their bank balance. But since every one of their policies has a certain amount of fat built in to cover the scenario of totalling the covered vehicle, and the number of people who have insurance but never claim is large enough, it makes more monetary sense for the insurer to total "good" cars than it does for them to risk trying to repair them.

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    holy sh** that makes a lot of sense now. no wonder they decided to total my perfectly good car. thanks/
    – user760783
    Aug 12 at 13:05

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