Our 2007 Buick was parked in a shopping center when it was struck by a flatbed truck.
I
followed all the correct procedures: I reported the incident to the
police, I contacted our insurance provider, Intact, and I even located
video of the collision.
The car was assessed at Intact’s preferred
body shop as needing approximately $3,800 in repairs. Based on this
quote, Intact declared the car a “total loss,” ended our coverage for a
replacement rental and offered a $4,500 payout – $4,000 for the value of
the car and $500 for HST. In my conversation with the body shop, they
confirmed that the damage was cosmetic and 100 per cent fixable. In this
market where inventory shortages have driven used car prices way
In
Ontario, insurance companies have the legal right to write off your
car, and there is no way to force them to fix it instead, according to
insurance experts.
According to Alex Gemmiti, service team head
for Mitchell & Whale Insurance Brokers Ltd. (Mitch), a Whitby,
Ontario-based insurance broker, "the authority to repair or replace
remains completely with the insurance company in the Ontario Automobile
Policy (OAP1) used by all motor insurers in the province." "In a strict
sense, the insurer may elect to repair or replace the car, regardless of
the vehicle's value or the expense of the repair. In most cases, they
will choose to pay the lesser amount.
So why would an insurance provider choose to write off a car that only had minor damage?
The
Insurance Bureau of Canada (IBC), which represents the insurance
industry, has Anne Marie Thomas as director of consumer and industry
relations. Thomas was unable to identify a specific point at which an
insurance company will decide to write off a car.
I can tell you that the insurance company will write it off if the cost of repairing it exceeds its value, she stated.
According
to Toronto-based automobile consumer advocacy group Automobile
Protection Association president George Iny, insurance companies often
write off a car if the cost of repairs is between 70% and 80% of the
market value.
Much simpler to write off?
When repairs are
so extensive, "the majority of buyers are comfortable with the decision
[to write it off] because they don't have the same level of confidence
in a completely rebuilt car," Iny said.
Unfortunately, limited
demand for "old, boring sedans" like Buicks, Chevrolet Impalas, and Ford
Crown Victorias means that their value is significantly lower than more
well-liked SUVs, which is bad news for drivers who have maintained
their "old, boring sedans" in excellent condition, according to Iny.
Therefore, they frequently incur little damage when being written off.
These
automobiles, according to Iny, "may serve for many more years, are
difficult to recreate in equivalent condition, and are typically worth
less than $7,000."
Even if you are unable to discover anything in
that price range, the insurance provider is only required to give you
the market value of the vehicle.
The goal of your insurance policy, according to Thomas, is to return you to your pre-loss financial situation.
By
province, the laws change. There are certain exceptions even though
they are generally similar. An insurance claim is allowed in Quebec, for
example, for the "fair cost of repairs."
"We've argued [in
Quebec] that'reasonable' might even exceed the market value of a
vehicle,'" Iny said. "In unusual circumstances like this one, insurance
companies have approved it."
When approached, Intact stated that
it was unable to comment on this particular situation without the
reader's consent. There are options available for customers to challenge
the conclusion of a claim, according to Katrina Caguimbal, an Intact
spokesman.
added value?
According to IBC's Thomas, if you can
show that your car is worth more than the insurer claims, they might
agree to enhance the amount.
"You could bring it to the insurance
company," Thomas added, "if by some miracle you had had your vehicle
assessed just previous to the loss and it stated it was worth $6,000
[instead of $4,000]. Or you might conduct independent study and refute
it.
For instance, to find out the current asking prices for
automobiles in your area that are the same make, model, and year, with
comparable mileage and options, you could visit a used car website like
AutoTrader.
If you can find a dealer who will cooperate, you might also ask them for an estimate, Iny said.
You
might mention this to your insurance adjustor if they are selling for
much more on average, but Thomas cautioned that there is no assurance
they will accept it. It might be a difficult road.
But normally,
the offer takes into account the car's actual market worth in your
region, according to Desjardins spokeswoman Jessica Spina.
We
closely monitor the vehicle market's development and tendencies, she
said. Adjustments are made to account for the variations in options and
condition among vehicles.
You might be able to receive a smaller
cash payout and keep the car if the damage is only cosmetic, according
to Mitch's Gemmiti.
This would enable a client to, if they so
choose, use a percentage of the value of the car to repair it, according
to Gemmiti. "These possibilities may be more limited if the vehicle has
structural damage that prevents it from meeting Ministry [of
Transportation] criteria for driving."
However, IBC's Thomas
advised that if your insurance provider agrees to provide you the car,
you must ensure that you would be able to legally drive and register it.
You won't be able to insure it if you can't register it.
It
might be a slippery slope, said Thomas. "There are laws governing
salvage branding in every province." For instance, in Ontario, insurers
must decide whether to label automobiles they have written off as
"irreparable" or "salvage" (i.e., classified as a "total loss").
According
to Thomas, salvage refers to something that can be fixed but won't be
considered "fit to drive" or insurable until it has been rebuilt and
passes structural and safety testing.
However, if it was declared
damaged, it could only be utilized for components and couldn't be
driven ever again in Ontario, according to her.
Thomas added, "If it's irreparable, then this car is suddenly a vehicle organ donor."
Request an umpire
The
Ontario Insurance Act safeguards a customer's ability to contest the
value of the car if they are still unsatisfied with the insurance
company's offer, according to Gemmiti.
If the case proceeds to arbitration, you would need to obtain a documented appraisal of your car, the insurance provider would do the same, and an impartial arbitrator would review both to reach a decision, according to Gemmiti.
