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What Do Insurance Companies Do With the Cars that Have Been Totaled?
December 26, 2019
There are few interesting options for totaled cars
Once totaled, an insurance company has the option to:
- “Sell” the car back to the insured. In this situation, the total loss settlement is reduced by the car’s remaining salvage value.
- Sell the car to an auto salvage vendor.
A popular (inter)national car auction chain such as Copart ( www.CoPart.com
) may then put the car up for sale.
It’s important to know that each state has its own statutory requirements for what amount of damage requires a vehicle to be totaled - and - what types of damage require a branded salvage title.
By way of example, New York state’s requirements are listed below:
What Is a Salvaged Car?
New York's definition of a salvaged car is very specific.Your car is considered salvaged in the state if it was:
- Model year 1973 or newer and transferred to an insurance company with a Salvage Certificate, due to significant damage from: Collision, Water, Theft, Vandalism.
- Declared a “wreck" at the time of sale or transfer by the owner listed on the back of its title.
- Brought to New York after being issued a salvage title in another state.
Branded Salvage Title
The state's Department of Motor Vehicles (DMV) requires a “branded" salvage title on any vehicle that is:
- Up to 8 model years old. AND
- Received damage worth at least 75% of its retail value OR was destroyed.
The website DMV.ORG
, provides links to each state’s requirements for salvage vehicles are shown on this page. Some state’s percentage of value are lower than that shown for New York state.
Depending on the specific type of damage and age of the car, the vehicle may be repaired and put back into service. In other instances the car is disassembled, and individual parts are sold as used. After being “parted out” and in some severe situations, a vehicle may be sold for its value in scrap.
Would you like to discuss your car insurance in greater detail? We’re here for you. Give us a call at 607-324-7500, or request a quote online: https://www.ryanagency.com/request-a-quote
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The year 1962 was marked by historic events—from the Cuban Missile Crisis to the passing of Marilyn Monroe. But while the world focused on these headlines, Lee A. Ryan was working alongside his brothers on my grandparents' farm when an unexpected opportunity arose—an invitation to join the insurance business. With no prior experience, no clients, and limited resources, my dad took a leap of faith and partnered with Nationwide Insurance to start an agency from scratch. Operating out of his home on Karr Valley Road in Almond, NY, he built his business one relationship at a time (some of whom are still clients!), laying the foundation for what would become a lasting legacy.
“Am I covered if I drive someone else’s car?” Or, “Am I covered if someone else drives mine?”
Many don’t realize that the insurance industry is one of the country's most regulated business segments, especially in New York State. The New York State Department of Financial Services (NYS DFS) wields significant control over the insurance business and has a stated goal of protecting consumers.
Most property insurance companies offer Actual Cash Value or Replacement Cost settlement options. Typically, insurance companies will require that you insure the property to the settlement value you choose. If you select Actual Cash Value, the amount you may be required to insure the property for will be less than the corresponding Replacement Value.
In that spirit, the Ryan Agency is sponsoring a Stearns BBQ Dinner pickup at our office on 57 Broadway Mall in Hornell on September 12th from 3:00 PM to 4:30 PM.
Today, an individual’s credit history can play a more significant role than any one of those traditional factors. Good Credit Scores lead to a Positive Insurance score. A good Insurance Score greatly influences what someone will pay to insure their vehicles.
Insurance companies offer various discounts for which their policyholders may qualify.
Great Eight number Six (6) suggests taking a look at removing Comprehensive and Collision on Older Vehicles.
By reducing the number of claims in your insurance history, you can significantly affect your rates in the future.
Sometimes, this concept meets with resistance from policyholders. The thought of paying more in the event of a claim is off-putting to some. Even if that means I pay more for my insurance.
