What Happens When A Vehicle Is “Totaled”

About ten days ago, on the residential 25 mph street where I live, a vehicle drove up over the curb, across a ten foot grass strip, and it took out about 150 feet of chain link fence.  I was upset about this, because this is where I normally park my vehicle, and if it had been parked there, it would have been “totaled”.

I thought that I knew what would have happened with the driver’s insurance company, if he had insurance, but once I started thinking about it some more, I realized that it would have turned out much worse than I thought.

To explain this, I will give an approximate example of what would have happened in my situation.  Let’s say that one year ago I purchased a Jeep Grand Cherokee with Quadra Trac from a private owner in Bismarck, for $5,000 cash.  I purposely bought the vehicle because it had Quadra Trac, which is full time 4 wheel drive, it is always in 4 wheel drive.  This is one of the best things to have in North Dakota during the winter when the roads are always wet, icy, and snowy.

I knew at the time that $5,000 was cheap for this particular vehicle, because similar Jeep Grand Cherokees in excellent condition with this many miles sold for $6,000 to $8,000.  I really liked the one that I bought because it was so nice, and everything worked on it.  It had already been to the dealer for service and inspection, and they found nothing wrong with it.  I had driven it for a year, and I loved it, there was nothing wrong with it.

Now, if my Jeep Grand Cherokee would have been parked on the street where it is normally parked, it would have been totaled by the person who crashed into the fence.  The rear hatch back tail gate would have been pushed in, the vehicle frame on both sides of the hatch back would have been bent, and the rear end underneath the vehicle would have been bent and crumpled.

There is no easy way to straighten all of these bends out of the vehicle frame after this type of collision, and it is nearly impossible to get everything completely corrected.  A repair estimate might be $6,000 to $8,000 or more.

The insurance company would likely try to say that my Jeep Grand Cherokee was worth $3,000 at the time of the accident, that they would like to call the vehicle a total loss, give me a check for $3,000 and make me sign over the title to the vehicle so that they could sell it for salvage.

I would argue that I paid $5,000 for my vehicle one year ago, there was nothing wrong with it, everything worked, and that I had put four new tires on it six months ago.  I would try to send the insurance company advertisements for comparable vehicles for sale in North Dakota that were listed for $6,000 to $8,000.  How am I supposed to buy a vehicle comparable to the one I had, for $3,000?

My pleading probably would not have gotten me anywhere with the insurance company, especially because I would have explained that I wanted to keep the vehicle.  Yes, I would have wanted to keep the Jeep Grand Cherokee that I bought, because it had Quadra Trac, and I knew that everything worked on this vehicle, and it was already paid for.  I would have continued to drive it with a collapsed rear end.

The insurance company would have said O.K., if you want to keep this vehicle, we will give you $3,000 for the value of the vehicle, minus the $1,000 we could have gotten for it at salvage, and we will give you a check for $2,000.

I would have felt that somebody ruined my beautiful Jeep Grand Cherokee that was in excellent condition with everything working on it, and all I got was $2,000.  Does that sound like a good outcome, or a fair deal to you?  The way it works, it is almost like somebody else can destroy your parked vehicle, and you are the one who gets punished for it.

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