Hurricane Sandy Total Loss...need advice

Originally Posted by Colbert

Thanks for all the info guys. I've gotten the same email beden1, but its only for $1500, and you have to finance through BMW.

Which insurance company is it? Or did I miss it

Also - what about sales tax? If you financed the car and paid 7 or 8% tax are you completely out the 4k that you just paid to the state? That would make it even worse.

Originally Posted by beden1

I got this email from BMW today. Maybe this will help the OP.

WE KNOW WHAT YOU’VE BEEN THROUGH. WE’D LIKE TO HELP.

Dear,

For many of us, Hurricane Sandy literally turned our lives upside down. Here at BMW Headquarters, our offices were forced to shut down for days and many of our tri-state employees’ personal lives have been dramatically impacted. With so much damage hitting so close to home, we feel proud that BMW was able to donate $1 million to the American Red Cross to support relief efforts in the areas where help is needed most.

We would also like to extend assistance to any of our owners whose BMWs were damaged beyond repair in the storm. To help you regain your mobility, we would like to extend a special credit on a new or Certified Pre-Owned BMW. This offer can be used in conjunction with all current offers. Please contact your local dealer or call BMW Customer Relations at 1-800-831-1117 to get details about the program.

We know nothing can fully compensate for what you might have lost. At times like these, our attention turns to what really matters. For us, it’s our BMW “family” – that’s you, our owners. Please accept our wishes for a speedy return to normal.

Sincerely,
Peter Miles
Executive Vice President, Operations

+ 1 I also received the e mail . Its worth a try to get in contact with them to see what they are willing to do for you. 48 hours of ownership might push them to give you some good will. Sorry to hear about your problem. Good luck
cheers
vern

Originally Posted by SamS

You make an incorrect assumption that a 2 day old car is worth 100% of the purchase price. Every try to sell your 2 day old car to a dealer across town for the same price you just bought it for?

Two things:

• I would be shocked if a dealer offered him $11K less on trade than he paid for the car. Especially given it had only 48 miles on it.
• Dealers buy cars at trade in value and sell at retail value. The insurance company should be basing their assessment at retail value.

At $11K that represents 22% (assuming $50K purchase price) depcreciation in two days and 48 miles. That is absolutely ridiculous. While I don't expect him to get 100% of the value of the car I don't expect him to take 22% depreciation on it within two days.

Originally Posted by SamS

I am very clear about what GAP coverage is, but you don't seem to be comprehending the situation as the OP is describing to us.

Assume he borrowed 100% of the purchase cost, let's say $45K. Add his financing cost of $2K, and now he has a loan of $47K that is outstanding. The insurance company looks at auction prices of used 2013 F30s and comes up with a value of $36K. Sure, that is low and he should fight it. $47K owed on his note vs. insurance evaluation of $36K is that $11K gap. And GAP insurance would cover that! He could probably fight that $36K valuation, and maybe get it up to $42K. But he's still going to be left with a gap of the insurance valuation vs. what he owes on the note. Maybe $5K.

You make an incorrect assumption that a 2 day old car is worth 100% of the purchase price. Every try to sell your 2 day old car to a dealer across town for the same price you just bought it for?

Just to clarity, the insurance company is not suppose to base your vehicle value using auction prices as this are wholesale prices. We dont pay whole sale when we replace our vehicles. They are suppose to use market value , how much a vehicle with the same options and milleage will cost in addition to tax in a dealer.

Sent from my SCH-I535 using Bimmer App

Originally Posted by enig44

Also - what about sales tax? If you financed the car and paid 7 or 8% tax are you completely out the 4k that you just paid to the state? That would make it even worse.

On top of the settlement value the insurance company should offer tax, tag and title registration fees which will be based off the settlement amount.

The one and only number that OP needs to work on should be the value of the car and tax will be calculated off that to add on top

Originally Posted by sunny5280

Two things:

At $11K that represents 22% (assuming $50K purchase price) depcreciation in two days and 48 miles. That is absolutely ridiculous. While I don't expect him to get 100% of the value of the car I don't expect him to take 22% depreciation on it within two days.

If we take the money out of the picture, and instead say, "I'd like my car replaced with the same car I lost." (ie, replacement value) Would there be a dealer that would or could find a similarly equipped car for 11K less than what was lost? I'd guess not, and so would expect "replacement value" to mean I could get the same car in the same condition (ie, fewer than a couple of hundred miles).

But I don't know the specifics of the OP's policy.

Originally Posted by Metalusmc

Just to clarity, the insurance company is not suppose to base your vehicle value using auction prices as this are wholesale prices. We dont pay whole sale when we replace our vehicles. They are suppose to use market value , how much a vehicle with the same options and milleage will cost in addition to tax in a dealer.

Sent from my SCH-I535 using Bimmer App

I believe you, but it appears his insurance has a different MO.

Originally Posted by Metalusmc

Just to clarity, the insurance company is not suppose to base your vehicle value using auction prices as this are wholesale prices. We dont pay whole sale when we replace our vehicles. They are suppose to use market value , how much a vehicle with the same options and milleage will cost in addition to tax in a dealer.

Sent from my SCH-I535 using Bimmer App

Exactly correct.

Originally Posted by Colbert

Honestly, this is my first vehicle, and I had no idea what gap insurance was. It wasn't offered at the dealership nor by the financing company, so i was completely blind...

You live in NY, right? "Gap" insurance typically covers the difference between replacement value and actual cash value. ACV is probably what your policy covers.

Other posters are correct: you need to not roll over. I live in Massachusetts. Here, insurance companies are required to make a good faith offer within, I think, 10 business days. This leads many insurers to promote their "fast" claim service -- which is really just an attempt to steamroll people to take their first offer. In fact, many people don't know that in Mass., you can (and should) negotiate and if you can prove the first offer wasn't a good-faith offer, you can even sue the insurance company.

Whatever you do, keep in mind that you don't have to accept your insurance company's estimate of ACV. Like you, a reasonable person who had a new car with <50 miles on it would not expect to settle for "ACV" as determined by the insurance company.

Due to Sandy losses, your insurer probably is praying you'll take their offer. Just say no.

BTW, would you be willing to shame your insurer by naming them here? I'd like to know who offers someone whose been victimized by a 100-year storm a pittance on a new car.

A question about gap insurance: I understand how it works for financed cars. But what if you paid cash? Does gap cover the cost between replacement value and ACV in that case as well?

To the OP, it seems like the first thing you have to fight on is the ridiculous depreciation the insurance company came up with. Their amount makes sense for a one year old car, but not a 2-day old one. Perhaps your dealer can provide them actual data on how much a car used as little as yours can go for. My guess is the loss should not go beyond 10%. Anything you cannot recoup might be counted as a loss, and hence a deduction, for tax purposes.

Btwy, I hope everyone who has been a victim of this storm is slowly recovering. There are quite a few of you here.

There is a good reason why some insurance companies advertise on TV that they will save you hundreds of dollars on car insurance. It appears you just found one of those reasons. Not all insurance is created equal. Somewhere in the reams of documents you signed it probably states how the value is determined. My insurance company pays full replacement for the first 15 months. Not all do this.

The money they're offering is basically $11,000 less than what I paid for the vehicle including taxes. I'm not sure they will pay the taxes on it also, but if they do, then it would technically just be a $6000 deficit. Btw, the insurance company is the one with the talking reptile

Originally Posted by Colbert

The money they're offering is basically $11,000 less than what I paid for the vehicle including taxes. I'm not sure they will pay the taxes on it also, but if they do, then it would technically just be a $6000 deficit. Btw, the insurance company is the one with the talking reptile

I see, so $5K is for tax, license, and registration. You need to find out whether your policy covers that. Unfortunately, it seems like it is not an automatic thing. Here is an excerpt from an article: "Car insurance companies are responsible for paying the actual cash value or market value of your vehicle so you can replace it with a similar one. In addition, they may also be responsible for other costs associated with purchasing a new vehicle, such as sales tax, title and vehicle registration."

This is complete BS. I would not agree to this settlement, you should be within a few hundred $$, not 6-11,000
BTW- After this, I'd change insurance companies also.

My daughter had her used '05 330xi for a year and a half when an old lady plowed into her and totaled her car.
My insurance company NJ Manufacturers is paying me $300 less than I paid for the car.

OP please "out" your insurance company.

Originally Posted by tturedraider

btw - GAP coverage actually has nothing to do with your claim.

This delta in price is EXACTLY what gap insurance is for.

Originally Posted by SamS

I am very clear about what GAP coverage is, but you don't seem to be comprehending the situation as the OP is describing to us.

Assume he borrowed 100% of the purchase cost, let's say $45K. Add his financing cost of $2K, and now he has a loan of $47K that is outstanding.
You make an incorrect assumption that a 2 day old car is worth 100% of the purchase price.

If his loan was for 45k all he owes is 45k + 2days worth of interest. Not the full amount of interest due over the life of the loan.

He already outted them. Talking reptiles and such :-)

Please forgive any grammatical errors, sent from mobile

Originally Posted by Psalm11_6

He already outted them. Talking reptiles and such :-)

With all the money they spend on advertising, they must cut corners somewhere

Remember that insurance companies are looking after their shareholders, not their customers. Insurance companies low-ball their customers hoping they will cave and take a better slightly better offer but still below what they were due. You just have to fight.

In this case, I would publicize their actions as much as possible. I could see a politician trying to get mileage out of this by fighting "greedy" insurance companies.

Colbert -

A lot of both good and bad advice here. My take:

1. Read the policy and see what it says your coverage is. That is what you need to work from.
2. Don't hire a lawyer now - they only one who will make out if you do is the lawyer.
3. Do talk to people like DigitalMPower who know the business and have offered their help/advice.
4. Do explain to the insurance company why you feel their offer is inappropriate. Don't fight - instead understand you're negotiating. Do this all in writing.
5. If necessary contact your states Insurance Commission/Department/whatever. Let the company know you'll be doing this. Insurance is a regulated business and having these agencies start an inquiry with a company on your behalf can be a motivating factor in getting a settlement.
6. Understand the 'company' is just a collection of people. Escalate your interactions with them until you find the individual who can/will help.

As a longer-term lesson, insurance just isn't about price. The fine print in the policy and how they handle claims are very important parts of choosing a carrier.

I have no idea how my carrier rates in price, but I know they handle claims well. I also checked my policy and see it includes a clause that if I total a new car within the 1st year, they pay for a new car (less deductible). Sometimes stuff like this has real value.

Originally Posted by bmw_or_audi

A question about gap insurance: I understand how it works for financed cars. But what if you paid cash?

GAP insurance does one thing - it pays the difference between the loan balance on a financed car and the settlement amount paid by the insurance company when the settlement amount is less than the loan balance. That is the ONLY thing GAP insurance does. There is no such thing as GAP insurance, in any way, shape or form for a car that is paid for in cash.




It is standard operating procedure across the auto insurance industry that the settlement paid includes tax, title, and license based on the value the insurance company pays for the car, even with chintzy insurance companies.

Thanks for all the info guys, its really appreciated. I'm going to start negotiating with them tomorrow, and I also applied for possible FEMA assistance. Hopefully things will work out to just a minimum loss

PS- Please tell them I said, they blow!

Originally Posted by Colbert

Thanks for all the info guys, its really appreciated. I'm going to start negotiating with them tomorrow, and I also applied for possible FEMA assistance. Hopefully things will work out to just a minimum loss

Have you read your actual policy? You need to read it carefully, even though you may not be a lawyer, looking for definitions and clauses that support your case. Also, a call to the state insurance commissioner in Albany asking what the general requirements are in your state for settling might give you some additional leverage.

Assuming that they know their first offer was a lowball and that they assumed you wouldn't know (or find out) that they can't do that, you should also start making noises with them that you will pursue additional claims in the courts for bad faith offers. The ability to do that depends on your state's individual regulations. You'd be well served to call regulators to learn what consumer protections exist in NY. It's a good bet the lizard ain't gonna tell you. Insurance is heavily regulated; make that work for you, not for them.

If they know more about the process in NY than you do, you can be absolutely certain they will try to use that to minimize their loss.