Cheaper for insurance to total vehicles than fix them?

[Mooseman]

Just saw this on my news feed. WTF? We're not talking about old beaters here. What I would do is keep it and fix it myself, or have it fixed.

More vehicles are being written off by insurance companies after minor accidents. Here is why

Vehicles today are safer than ever, with systems designed to keep you in your lane, control your speed, and prevent crashes. However, these added safety features are making cars more expensive to repair, increasing the chances of your vehicle being written off after a crash.

www.ctvnews.ca

 

[TollKeeper]

Old news for me....

They are writing cars off for having their catalytic converters stolen, new and old. My recent purchase Kia Amanti was a victim of this.

Its really a 2 fold problem. So say some car needs 3-4000 dollars worth of repair. Most repair shops are not in the best part of town, and weeks to months behind on getting the repairs done. Catalytic converters, radios, air bags, PCM/TCM/BCM/TIPM/etc, motors, transmissions, etc, are being stolen while the shop is waiting on parts. Now the insurance company has to pay for the parts that were ordered, and the car to be totaled out/Repaired, because no one noticed the parts were stolen until the shop was ready to pull it into the shop.

If the repair shop is months behind, the insurance company could be on the hook for that rental car bill.

These are all factors they take into account when an accident occurs.

 

[Mooseman]

I forgot about the car rental thing. One reason why stealerships don't do that or loaners anymore. But then those talked about in the report were "walking wounded", just cosmetic damage. My truck had $7k of damage and I was able to drive it until it was repaired, which only took a month wait.

Regardless, I'd still buy it back unless it had a lien on it so I'd let the insurance pay it off. Only thing though is that it would be branded so no more full coverage insurance, just liability.

 

[TollKeeper]

I guess it depends on your insurance carrier..

My 2005 Saturn Relay I bought totaled, repaired it. Full Coverage insurance. 1 month later it got totaled out, and I got paid full value for it. Sold it a couple months later. Insurance paid out as if it was a clean title
My 2005 Buick Rendezvous CXL AWD was totaled, repaired it. Full coverage on it. Sold it.
My 2004 Kia Amanti, same story. Selling it this weekend
My 2012 Toyota Sienna same story. Wifes daily driver. Full coverage insurance on it, with a $0 dollar deductible.
My 2001 Toyota Sienna same story. Selling this weekend
My 2015 Jeep Patriot same story. Selling next month.
My 2005 Mercury Montego Premier AWD bought totaled, repaired it. Carried full coverage on it. Sold it to a co-worker. He totaled it 5 months later with full coverage insurance, and got paid out for it. He fixed it again, and is carrying full coverage on it again.
My 2001 Pontiac Aztek GT AWD got totaled out back in 2009 (I think), got paid out on it, and repaired it. It got totaled out again is 2011, paid out, repaired. Insured full coverage. It got totaled out again in 2017. Got paid out on it again, repaired it, insured for full coverage again. Sold it.

 

[Mooseman]

My only experience was with my wife's '02 CR-V that was totaled for passenger paint scratches and scratched window after a wind storm. They totaled it, I kept it, replaced the door, but insurance stipulated it couldn't be fully insured even though it wasn't branded as rebuilt. 5 years later, sold it for scrap because it was parked for too long during the pandemic and everything rusted solid.

DIL bought a Civic that, unbeknownst to her, was branded rebuilt. She was able to get full insurance despite this.

Could be an insurance company policy or a Canadian thing. However, watching I Do Cars on YT, he's come across some vehicles that were branded salvage and couldn't be legally put back on the road. It's apparently an insurance company thing in some states even though the vehicles had repairable damage. He had to part them out. Maybe it's to prevent salvaged vehicles from being repaired and resold as if nothing happened, which is what happened to my DIL.

 

[azswiss]

First principles: the insurance company will *ALWAYS* take the path of most profitability. My guess. in the current economic environment they will derive much more income parting out the vehicle now than collecting regular insurance payments from the owner over the life of the vehicle.

 

[Mooseman]

In that same wind storm, my TB was also damaged. A broken windshield and scratches on the hood. It was already 11 years old then (my how time flies!) and they did fix it. Its value was much higher than the CR-V. And because it was actually 3 claims for the same event (our house's roof shingles were ripped off which damaged the parked vehicles), we paid only one deductible. We actually made money as they gave us X amount according to what their evaluator said but the roofer charged $2000 less. Go figure. It's probably faster and cheaper for them to just overpay than deal with estimates and paying contractors directly. Like you said, "the insurance company will *ALWAYS* take the path of most profitability".

I have since switched insurers as the first one tried to ream us without lube in a subsequent year. Moved everything, which was way better. The new insurer were aware of the previous claims. They didn't even jack it up after I damaged the Sierra a couple of years ago.