Why do I need more than the state minimum auto insurance?

[StartingOver10]

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@flan wrote:

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@coterotie wrote:

I don't think I am underinsured, the problem is establishing the value of my car.  Tell me the value using KBB, black book, NADA etc. of an untitled 2015 Jeep with 300 miles.  The only value obtainable is new car price.  So that is what I am expecting.  Can't even get the bill of sale, because I can't bring the car to the license office for inspection.  I am not expecting USAA to do anything other than what is stated in the policy, value of the vehicle.  They are also supposed to give a 20% bonus on the value if the car is totalled due to the acts of someone else.  Unfortunately this may not apply since the other party was underinsured or something like that.  But go ahead and google used 2015 jeeps.  None that I can find.

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You have a used car.  If you owned it outright, and it hadn't been hit by some moron, you could sell it for a few thousand dollars less than you paid for it.  That's it's fair market value.  The fact that you'd never actually be able to find one for sale doesn't change that.   Fair market value is typically what insurance policies are written for, unless there's a state requirement for replacment value, or you've bought additional coverage (either as part of your main policy, or a seperate one, often called "GAP) to do so. If you can't afford to eat that loss, you're underinsured. 

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^^^This is the reason to never buy a new car. Because according to insurance the car is NEVER new unless it has zero miles and you didn't even take it out for a test drive!

Correct me if I am wrong Flan. Is it used because the OP signed the contract and drove it off the lot?

[coterotie]

Actually no it doesn't qualify as used.  The definition of a used car is a car in which the dealer's title has passed to the new owner and a title issued in the new owner's name.  That title has never passed (as confirmed by usaa with the auto dealer) so the car can be sold right now as a new car.  They have new cars on their lot with more miles and demonstraters that qualify as "new" with 4,000 miles.  As to the wise ass crack about being underinsured because I can't "afford" to eat a loss caused by someone else.  It has nothing to do with "affording."  Just because I have $450K in cash in the bank, doesn't mean I want to spend it on someone else's negligience.  I don't think anyone can "afford" to waste money.  USAA can certainly "afford" to treat me fairly and they can certainly "afford" to sue the underinsured at fault driver to recover the money for my car.  Used car values are easy to obtain, if this was a 2014 with 10K miles look it up, there is your value.  However, 2015 is a whole different animal.  There are no comps and they can't even make the drive it off the lot argument, because they can't prove that driving it off the lot decreases the value because there are no comps.  They are ASSUMING that by driving it off the lot the value has decreased, but they can't PROVE it.

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@StartingOver10 wrote:

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@flan wrote:

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@coterotie wrote:

I don't think I am underinsured, the problem is establishing the value of my car.  Tell me the value using KBB, black book, NADA etc. of an untitled 2015 Jeep with 300 miles.  The only value obtainable is new car price.  So that is what I am expecting.  Can't even get the bill of sale, because I can't bring the car to the license office for inspection.  I am not expecting USAA to do anything other than what is stated in the policy, value of the vehicle.  They are also supposed to give a 20% bonus on the value if the car is totalled due to the acts of someone else.  Unfortunately this may not apply since the other party was underinsured or something like that.  But go ahead and google used 2015 jeeps.  None that I can find.

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You have a used car.  If you owned it outright, and it hadn't been hit by some moron, you could sell it for a few thousand dollars less than you paid for it.  That's it's fair market value.  The fact that you'd never actually be able to find one for sale doesn't change that.   Fair market value is typically what insurance policies are written for, unless there's a state requirement for replacment value, or you've bought additional coverage (either as part of your main policy, or a seperate one, often called "GAP) to do so. If you can't afford to eat that loss, you're underinsured. 

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^^^This is the reason to never buy a new car. Because according to insurance the car is NEVER new unless it has zero miles and you didn't even take it out for a test drive!

Correct me if I am wrong Flan. Is it used because the OP signed the contract and drove it off the lot?

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[flan]

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@StartingOver10 wrote:

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@flan wrote:

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@coterotie wrote:

I don't think I am underinsured, the problem is establishing the value of my car.  Tell me the value using KBB, black book, NADA etc. of an untitled 2015 Jeep with 300 miles.  The only value obtainable is new car price.  So that is what I am expecting.  Can't even get the bill of sale, because I can't bring the car to the license office for inspection.  I am not expecting USAA to do anything other than what is stated in the policy, value of the vehicle.  They are also supposed to give a 20% bonus on the value if the car is totalled due to the acts of someone else.  Unfortunately this may not apply since the other party was underinsured or something like that.  But go ahead and google used 2015 jeeps.  None that I can find.

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You have a used car.  If you owned it outright, and it hadn't been hit by some moron, you could sell it for a few thousand dollars less than you paid for it.  That's it's fair market value.  The fact that you'd never actually be able to find one for sale doesn't change that.   Fair market value is typically what insurance policies are written for, unless there's a state requirement for replacment value, or you've bought additional coverage (either as part of your main policy, or a seperate one, often called "GAP) to do so. If you can't afford to eat that loss, you're underinsured. 

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^^^This is the reason to never buy a new car. Because according to insurance the car is NEVER new unless it has zero miles and you didn't even take it out for a test drive!

Correct me if I am wrong Flan. Is it used because the OP signed the contract and drove it off the lot?

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USAA will argue that transfer of the vehicle to its ultimate purchaser makes it used, and that the title not have been issued is just a detail. (And they'll argue in the alternative that, if it hasn't been transfered to its ulitmate purchaser, they're not the right insurer, because the coverage is only for vehicles owned or leased by insured.)   If there's a lawsuit, they'll be able to produce a parade of experts to support the dimmished value. 

[Anonymous]

All I know is that there are some uninformed responses to Coterite.

I spent 17 years in the auto business and saw tens of thousands of new vehicles. Not one had 0 miles and they were all considered new.  As was said, a vehicle can have 3,000 miles on it and still be new.  

Op you new to ask USAA about substitution of collateral.  That is what typically is done when a relatively new vehicle is totaled.

[enharu]

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@coterotie wrote:

A while back we had a debate where a poster's sister made a dumb move because her leasing company required decent insurance limits.  So rather than pay for those limits she got rid of the car and rolled a bunch of negative equity in a new car.

http://ficoforums.myfico.com/t5/Auto-Loans/Lease-contract-termination-due-to-insurance-policy/m-p/35...

Here is the story, 6th of this month I was finally able to work a deal to get rid of my BMW and mini-van.  New 2015 Jeep Latitude.  I had already leased the wife a new infinity and this was the final step to getting our car situation resolved.  So this Sunday coming back from Sunday school with my daughter we were sitting at a red light and were rear ended by a girl.  She was texting and since the speed limit is 55, she was doing 55 when she hit us.  My new Jeep totalled.  Her Honda totalled.  GMC in front of me $2,500 in damage.  So a grand total of about 50K in property damages.

Her policy limit is $25K.  So my insurance company (USAA) is covering my damages and will seek to recover the cost from her.  Since her insurance coverage is tapped out, she will be facing a judgement unless she can find about 25 to 30K lying around.  So likely 1/4 of her salary (Alabama limits)  for the foreseeable future will be going to pay for my totalled car.  Fortunately she has enough in medical and bodily injury to cover my costs as well as the lost wages etc. 

So you have to ask yourself how you would like to pay for a car that you never get to drive?

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wow that's some crazy damage. Glad to know you're okay though.

That honda has tinted windows too. Not too sure about your state's tint laws but that level of tint is illegal in most states.

I was in a big accident as well early this year that got a pretty much brand new lexus (had about 1.5k miles?) totaled. I was fine, but wasn't as "lucky" as you. Guy who hit me was driving a beat up 93 Toyota. He had minimum coverage, and I doubt he is even in the US legally, so there's pretty much zero chance of him having any assets I can go after. I talked to my attorney, but he said it's a waste of time going after him personally because he may not even be documented, and even if he is, he's most likely making minimum wage so trying to file a judgment against him is just pointless.

My own insurance ended up paying for the whole thing. I think my insurance is going after their's, but there's zero chance they will recover the full amount or anything close. On the bright side my premium didn't (or at least, hasn't) gone up yet.

[enharu]

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@coterotie wrote:

Yes I am still waiting on the official totalled word, but glad the damage was so extensive.  Of course by having over the insurance limits required in the lease contract, I have automatic no cost gap coverage.  Plus by leasing, should it have been repaired, I would have turned the vehicle in and walked away from the huge hit to the value that as an owner I would have had to eat.  So far USAA is telling me they will not give me replacement value, but rather depreciated value and will not cover my capitalized cost reduction or the lease termination fees.  They will pay me for the groceries that were ruined if I give them a receipt.  For whatever reason, my USAA property adjuster is being a hard-ass while the injury adjusters for Geico and USAA are being very accomodative.

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@Anonymous wrote:

I'm sorry to hear and see about your accident.  I'm very happy that you were not hurt badly.  I know it sucks to be in an accident but in terms of your car it could have been worse .  Let's say you sustained $15,000 worth of damage and not totaled.  Your Jeep would be in the shop for a long time and when it came back it would never would be the same.  In this case, because it's new and totaled  USAA  will  tell you to find another new car.  It sucks but believe me the situation could have turned out far worse and not just in terms of people being hurt.  I wish you the best.

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You should never have to take the hit yourself.

Most people don't know this however.

If you have full coverage, claim your own insurance for diminished value. If the other party has insurance, go after them for that.

You will need to hrie an appraiser out of your own pocket for such claims in most cases. Your insurance company is not going to be your friend when you are trying to file for this sort of compensation.

When you lease a car, there are clauses in contracts that you should not cause excessive damage to the car that results in an excessive loss of value. They expect the car to retain its residual value when you return the car. Small accidents and scratches don't really matter. Frame damage however, is a big deal. If the car has a much lower residual value than what it ought to be when you return the car, you are on the hook for it. The dealership leased you the car with the expectation that it will come back in 2-4 years and eventually be sold as a certified pre owned, rather than a car that's disposed of at the auction. However, on the bright side, you can claim that money from your (or the at fault party's) insurance for this extra amount of money that you need to pay. It's going to take some work but at least you're not screwed over.

That being said, your car looks like it's totaled.

If there's frame damage and your insurance company doesn't want to total the car, make sure they do. Hire an attorney or hire an apprasier to factor in diminished value damages. Once that number is added in to the repair cost, it usually is enough to cross the threshold the insurance company has set to total the vehicle.

You may still be on the hook for early termination and what not, but in most cases GAP insurance covers that. You may even get a refund check sometimes.