Posted by wisbaker on July 11, 2012 at 11:31:00 from (207.118.150.43):
In Reply to: Why do they do that? posted by rrlund on July 11, 2012 at 08:51:42:
Two factors: Insurance companies have jacked up the salvage % they sell their salvage for, so as a previous post stated yes the cost to repair damage is less than book or replacement value, but they can minimize their liability or cost to settle the claim by totaling it because total settlement-salvage recovery is less than repair cost. Another factor is insurance companies don't like body shops and vice versa, if they total it they write a check and they're done with it. The insurance companies believe that adjusters are incompetent because they can't identify all the damage OR the body shops are thieves because they keep finding more damage than the adjuster noted. Insurance companies believe auto manufacturers are overcharging for their replacement parts so they require body shops use CRAP parts (Certified Replacement Auto Parts) body shops don't like that because CRAP parts don't fit so they spend more time installing them (that they aren't paid for-hey get flat rate) or last like they should. The insurance industry drank the kool aid and bought the line from CRAP manufacturers that their parts are as good, now that they find out they're not they get to pay for the same claim twice (they really love that). If you live in a No-Fault auto insurance state you're pretty much screwed when you have a claim, the insurance companies have gotten no -fault laws written in their favor. If yo live in a state that still has traditional insurance AND you're not at fault you have a better chance of being made whole, because the other driver's insurance company has to make you happy enough to accept the settlement. As for the first offer being low, that's business you'd be surprised how many people actually accept the offer. If you make it clear your willing to go to court and you have adequate justification for your claim they know they stand to loose and get to pay the claim and court costs and maybe punitive damages, it's out of their control and they like that even less than body shops or paying for the same claim twice.
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