The 2007 Buick was struck by a flatbed truck while parked in a shopping plaza. I did all the right things: filed a police report, called Intact, our insurance company, and even found video of the accident. 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”, terminated our replacement rental coverage and offered a payment of $4,500 – $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 percent repairable. In this market where inventory shortages have sent used car prices skyrocketing and consumer choice down, Intact considers a repairable car with no structural or mechanical damage as a total loss unconscionable. To expect that anything can be bought for $4,000 is pure fantasy. Why write off a car that can be repaired? Can we get them to fix it? – M., Ontario
Insurance companies have the right to write off your car in Ontario – and there’s no way to force them to fix it, insurance experts said.
“In the Ontario Automobile Policy (OAP1) used by all auto insurance companies in the province, the right to repair or replace rests solely with the insurance company,” said Alex Gemmiti, service team leader at Mitchell & Whale Insurance Brokers Ltd. (Mitch). , an insurance broker based in Whitby, Ont. “In the strict sense, the insurer can choose to either repair or replace, regardless of the value of the vehicle or the cost of repair. They will normally pay the lesser of the two.”
So why would an insurance company decide to write off a vehicle with just cosmetic damage?
Anne Marie Thomas, director of consumer and industry relations for the Insurance Bureau of Canada (IBC), which represents the insurance industry, said she could not determine a threshold at which an insurer would decide to write off a car.
“I can tell you that if it costs more to fix than it’s worth, the insurance company will write it off,” he said.
George Iny, president of the Automobile Protection Association, a Toronto-based auto consumer advocacy group, said insurance companies typically write off a car if the cost of repairs is 70 to 80 percent of market value.
Easier to delete?
“Most consumers are happy with the decision [to write it off] when the repairs are so extensive because they don’t have the same level of confidence in a substantially rebuilt vehicle,” Iny said.
Unfortunately for those drivers who have kept their “boring old sedans” like Buicks, Chevrolet Impalas and Ford Crown Victorias in top condition, the low demand for these vehicles means their value is significantly less than the more popular SUVs, Iny said. . So they tend to be deleted with relatively little damage.
“These vehicles could provide many more years of service, are difficult to duplicate in equal condition and are usually worth less than $7,000,” Iny said.
Although the insurance company must give you market value for the vehicle, they don’t have to give you more than that – even if you can’t find anything in that price range.
“Your insurance policy is designed to put you in the same financial position you were in before your loss,” Thomas said.
Rules vary by province. Although they are similar in most regions, there are exceptions. In Quebec, for example, an insurance claim allows for the “reasonable cost of repairs.”
“In exceptional cases like this, [we’ve] he argued [in Quebec] this ‘reasonable’ could even exceed the market value of a vehicle and insurance companies have accepted this,” Iny said.
When contacted, Intact said it could not comment on the specific case without the reader’s permission. “If a customer disagrees with the outcome of a claim, there are avenues to challenge it,” said Katrina Caguimbal, a spokeswoman for Intact.
If you can prove your car is worth more than the insurer says, the company may agree to increase the payout, IBC’s Thomas said.
“If, by some miracle, you had your vehicle appraised shortly before the loss and it said it was worth $6,000 [instead of $4,000], you could bring it to the insurance company,” Thomas said. “Or you can do your own research and dispute it.”
For example, you could check a used car site like AutoTrader to determine the current asking prices for cars in your area that are the same make, model and year, with similar mileage and options.
You could also get an estimate from a car dealer if you can find someone to work with it, Iny said.
If they’re selling much more on average, you could take that to your insurance adjuster — but there’s no guarantee they’ll agree to it, Thomas said. “It could be a tough road.”
But, typically, the quote reflects the car’s current value in your area, Desjardins spokeswoman Jessica Spina said.
“We are constantly monitoring the development and trends of the car market,” he said. “Adjustments are made for the different situation and choices between vehicles.”
If the loss is cosmetic, you may be able to get a reduced cash settlement and keep the vehicle, Mitch’s Gemmiti said.
“This would allow a customer to use a portion of the value of the vehicle to repair it if they wish,” Gemmiti said. “These options may be more limited if there is structural damage to the vehicle that prevents it from being driven by the Department [of Transportation] standards.”
But if your insurance company agrees to give you the car, make sure you can drive legally and register it, IBC’s Thomas said. If you can’t register it, you won’t be able to secure it.
“It can be a slippery slope,” Thomas said. “Each province has rescue brand legislation.” In Ontario, for example, insurers must determine whether vehicles they have written off (in other words, categorized as a “total loss”) should be labeled “irreparable” or “salvage.”
Salvage means it can be repaired, but it won’t be considered “roadworthy” or insurable unless it has been rebuilt and passed structural and safety inspections, Thomas said.
But if it’s designated as beyond repair, it can only be used for parts and can never be driven back to Ontario, he said.
“If it’s beyond repair, that means this car is now an organ donor,” Thomas said.
Ask for a referee
If you’re still not satisfied with the insurance company’s quote, Ontario’s Insurance Act protects the consumer’s right to dispute the car’s value, Gemmiti said.
If it goes to arbitration, you would have to get a written appraisal of your car, the insurance company would do the same, and an independent arbitrator would review both and decide on a final decision, Gemmiti said.
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