The Insurance Company Can Deem A Damaged Car As A “Total Loss”
Interviewer: If it’s totaled out by the insurance company, they’re not allowed to use the car? They have to get another one?
Richard Sailer: Well they’ve got two options at that point. Once the insurance company has deemed it a total loss, they typically will say, ‘we’ll give you’ and just throw numbers out there ‘we’ll give you 2500 bucks and we’ll come and pick it up, or we’ll give you 2 grand and you keep it’. They’ll basically deduct the salvage value of the wreckage if you retain the car. But the bigger problem then becomes, is the insurance company will notify the department of motor vehicles that the vehicle is deemed a total loss, and the client will then have to effectuate the repairs and then undertake a safety inspection and have the vehicle re-registered as a salvage vehicle. And often times that’s cost prohibitive or they can’t get the car in a proper working order to be able to pass the DMV inspection.
It Is Advisable To Get Gap Coverage for a Newly Purchased Vehicle
Interviewer: What about if a car is totaled and there’s no gap coverage, and you’re getting parts for the car and it looks like they owe on it? So they can’t buy anything for the vehicle with the money they get?
Richard Sailer: Yes that’s a big problem, we do counsel clients as we get them for future reference to – if you purchase a new vehicle they’ll always get gap coverage. A lot of people don’t even know that exists and basically the minute you drive a car off a lot, you buy a car for 30,000 bucks. By the time you get it home it’s worth 25, just because it’s a used vehicle. So I see when people have their cars in major accidents, and they’re totaled, in the first year to when they own the vehicle, they usually get screwed.
Cost Shifting Statutes and Other Legal Devices May Be Utilized To Remedy Under-Insurance
Interviewer: What happens if you have very low insurance, the minimums – and you get into an accident, is that severe to someone that has the minimums? Can you still recover more than the loss for them? What do you do?
Richard Sailer: There are certain circumstances. There is cost shifting statutes and other legal devices that we can do to open up a policy – which would then mean we’ve given the insurance company the opportunity to settle within their limits, they’ve chosen not to, and then we proceed to trial and obtain a more favorable outcome – it is possible to obtain more than what the actually policy limit was.
It is Very Important to Have Uninsured Motorist Coverage in Southern California
Interviewer: What if you had an accident with someone that has no insurance?
Richard Sailer: That’s a big problem and typically if you don’t have uninsured motorist coverage on your own policy, then you’re kind of out of luck. What we find is that if people can’t afford to have insurance on their vehicle, they typically don’t have money or assets to pay potential judgments. Being in Southern California, we see that more often than not – and I always recommend people to buy uninsured motorist coverage because I’d heard as high as a third of the cars on the road are uninsured.