[Wichita-SCCA] Jeeps Cause Pain
Greg Laws
GLaws at cox.net
Mon Mar 19 08:24:07 EDT 2007
After my usual 6 hours of refreshing sleep I am now a happy and ready-to-go
old insurance guy once again. Strangely, the sleep didn't make me any more
handsome but then how can one improve on .... never mind. ;-)
Anyway, to answer Dave's question: Repairing your Kansas-titled vehicle is
completely legal and many do just that regardless of any "Salvage" brand
that may exist on the title. So is the practice of ignoring the damage and
just continuing to drive the car "as-is". In fact this last situation is
the typical fate of most cars that were totalled due to hail damage. One
may renew or purchase new insurance, renew the license plate, etc just as
if nothing happened to the car.
The only effect that a "Salvage" brand has on the title is that it serves as
a warning to a future purchaser of the car that something expensive happened
to it in the past. This warning typically would make little difference to a
purchaser looking at a 15 year-old, 200K Cavalier transportation school car
totalled out due to hail ( 6 dings ought to kill that one) but it could make
significant resale value difference to someone looking at a 2-year old
Porsche that was rebuilt from smacking the wall at speed. This is a
consumer protection law, nothing more. Insurance companies don't care about
signing up a branded car as long as they have documentation of the prior
damage because the standard auto policy is for Actual Cash Value (ACV). If
you buy full coverage on a previously totalled car without repairing it
first then you will be paying the full premium but will be covering only the
salvage value or perhaps the value of the car as a transportation vehicle.
Again, the old Cavalier's transportation car value is pretty much identical
with normal ACV but the ACV of the Porsche would likely be very low even
though the premium paid for insurance would be the same as for an undamaged
Porsche.
For example, let's say that your 2005 Gofasto 4dr sedan suffered severe hail
damage and was deemed to be a total loss at the insurance company's hail
drive-in. Let's also say that you opted for owner-retained salvage and
accepted a cash settlement of ACV less Salvage Value less Comprehensive
Deductible plus Sales Tax to end the insurance claim. The insurance company
will report the settlement to the State and, since this is a late model car
and you have a lien, your electronic title will from now be branded
"Salvage". If there was no lien then the State would mail you a replacement
paper title branded "Salvage" that would supercede the original that you
still possess. Either way, any future purchaser of your car will receive a
branded title.
Okay, so you drive away from the hail drive-in with your cash settlement in
hand: do you still have full insurance coverage on your now-totalled car?
The answer is "Yes, you do have coverage.". Nothing has changed. Your
premium, your deductible, your coverage all remain in place so if you get
slammed by a bad boy as he's trying to star in a Wild Police Video segment
and your hail damaged car becomes totalled for the second time YOU WILL
STILL HAVE FULL COVERAGE. It's just that this new collision total loss
settlement will be for the Salvage Value Only, less your normal collision
deductible.
Well ... THAT's clear as mud. I'm starting to get grumpy again. Thank God
I don't have to deal with this stuff anymore!
As far as tossing the branded title into the round file, the State will have
the latest version of the title on file in the database and any purchaser of
the totalled car will receive a new title in their name and that new title
will be branded "Salvage". I hope that full disclosure had been made at
time of sale because otherwise the buyer of that Porsche is going to get a
little upset!
Re-registering the car in another state won't change anything because, to
the best of my knowledge, all states recognize each other's titles and will
carry over the brand onto their title. The day is coming soon when there
will be a national database of VIN numbers and vehicle histories. The hoary
old practice of buying a hail-damaged car at discount and then waiting until
a new hail storm comes through the area to claim all the old hail on the
purchaser's new insurance policy is rapidly coming to an end as that
database becomes used by more and more insurance companies. My guess is
that someday fairly soon we will each have a single national driver's
license and our vehicles will all have a national vehicle title.
We aren't there quite yet but even now I know of only one sure way to clean
a title and that would be to physically ship the vehicle to another country
such as England where they would issue a clean English title regardless of
branding on the original title. Then the vehicle would have to be sold in
England to a buyer and that buyer would have to ship the vehicle back to the
USA for sale here whereupon the clean English title would become a clean
domestic title. I don't think that anyone would bother with all that for the
old Cavalier but it might be worthwhile for a few high-dollar exotics.
Well -- it's time for breakfast.
**************************************
Thanks for the offer to bring the trailer down on Friday, Dave. That would
be great! You could drop it off at Strother Field in the usual place at the
corner of the fence if you like or there are other options too. One would
be to leave it at my house and I could easily take it down to Strother on
Saturday. Another option would be to leave it at Strother but in a less
visible, possibly more secure location and I could reposition it on
Saturday. Just let me know your plans. I believe that Kevin Anderson has
the trailer keys.
Enjoy,
Greg Laws
----- Original Message -----
From: ""-(©¿©)-Dave G"" <dgird at cox.net>
To: "Wichita Region SCCA." <wichita-scca at wichitascca.org>
Sent: Monday, March 19, 2007 1:13 AM
Subject: Re: [Wichita-SCCA] Jeeps Cause Pain
>
> OK,You cranky old insurance guy,
> I R still a bit cornfuzed.
> If I have a clear title and a car (sans l'lien) and an insurance check,
> what is to stop me from repairing the car,tossing the salvage title in
> to the round file and continuing on as if nothing has happened? Or in
> the case of big brother's data base, re registering the car in another
> state?
> conniving minds want to know
> Also You driving up here to get the trailer next sat. is stoo-pid, If my
> work schedule permits I'll bring it to you. I'll keep You posted on that
> one as the bomb will most likely drop on Friday.
> Dave,BIG SPIN on course,Gird
>
>
>
>
> Greg Laws wrote:
>> Hi Dave,
>>
>> Ned is correct, almost. In a situation where the owner of the vehicle
>> "retains salvage" the actual agreement between the insurance company
>> and the owner(s) is strictly a financial one. The salvage value is
>> subtracted from the ACV and the remainder (plus appropriate local
>> sales tax and fees) is then paid to the owner(s). The actual title
>> does not change hands nor is it disturbed in any legal sense ... at
>> least that was the way things were done until two or three years ago
>> when a new state law went into effect.
>>
>> Things still are handled in the same old way for older cars now. I
>> think that the break between older and newer is 1992 or maybe 1993 at
>> present. It changes one model year every calendar year. The newer
>> cars now get a replacement title branded "Salvage" that replaces the
>> original. That's assuming that there is a paper title to begin with.
>> The state only issues a paper title now when there is no lien. If
>> there is a lien on the car then no actual title exists because the
>> state keeps the title record only in the computer database. All the
>> owner(s) gets is a notation on his vehicle registration.
>>
>> In the event of a total loss involving a lien, the lien holder gets
>> paid first which hopefully will be sufficient to pay off the loan and
>> thus release the lien. Only the remaining balance, if any, would go
>> to the owner but he would get a clear title branded "Salvage" if he
>> elected to owner-retain salvage. It gets more complicated than that
>> if the owner(s) is upside-down in his loan.
>>
>> See why old retired adjusters are so cranky? It's because they
>> constantly have to sort through all this legal crap and paperwork just
>> to get to what should have been common sense all along!
>>
>>
>> * Oops! Sorry. Political statement from a cranky old
>> retired adjuster is now completed.
>>
>> Anyway, there are only two good pieces of advise that I can give
>> anyone regarding insurance anymore. The first is to always buy gap
>> insurance if you buy a late model car and especially if you buy a new
>> domestic car. The second is to shop around for coverage every year or
>> two. All insurance companies sell the same policy for auto coverage
>> because the basic language and coverage all has to be approved by the
>> state Insurance Commissioner. The policy language is thus almost
>> identical between companies and so are the premiums pretty much,
>> although the underwriters continue to surprise upon occasion with
>> their radical ups & downs in pricing due to their astute tea leaf
>> reading -- oops, there I go again. Anyway, don't stay with a company
>> for loyalty because they seldom would have loyalty for you if
>> there were to be a claim. Unless you're rich of course. Oops! It
>> seems there's no controlling my political statements tonight. It's
>> far too late and I'm getting cranky again. Time for bed.
>>
>> Signing off,
>> Greg Laws
>>
>>
>>
>> ----- Original Message -----
>> *From:* AeroNed at aol.com <mailto:AeroNed at aol.com>
>> *To:* wichita-scca at wichitascca.org
>> <mailto:wichita-scca at wichitascca.org>
>> *Sent:* Sunday, March 18, 2007 9:29 PM
>> *Subject:* Re: [Wichita-SCCA] Jeeps Cause Pain
>>
>> A couple years ago, I hit a deer with a Corvair that I had just
>> finished restoring. I had much more invested in that car then it
>> was worth. I also had 'regular' insurance on the car, not antique
>> or stated value. The deer collision was covered by collision, my
>> agent called it "an act of God."
>>
>> Anyhow, the adjuster totaled the car for $1600 worth of damage.
>> After a small amount of negotiation, we settled on the value of
>> the car and the salvage value. I told my agent that I wanted to
>> buy back the car. No problem, got a check for the value minus the
>> salvage value. The title never left my hands. What happened to the
>> car after that is another story...
>>
>> Ned
>>
>>
>>
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