On November 16, 2023, an insurance adjuster shared insights into the impact of rising repair costs on determining whether a car is considered “totaled” or salvageable. In a post on theautopian.com, the adjuster explained that factors such as the increasing technological complexity of cars and difficulties in obtaining replacement parts have led insurance companies to reassess their criteria for determining the value of a damaged vehicle.
The adjuster admitted that his job could be disheartening at times, as he was responsible for deeming cars total losses. For instance, even a minor accident could result in a car being sent to the scrap yard if the cost of repairs exceeded the car’s value. The calculation involved assessing the car’s value, estimating the cost of repairs (including potential supplementary repairs), obtaining a bid for the salvage selling price, and comparing these figures. If the car’s value was higher than the combined total of these factors, it would be repaired.
Unfortunately, this practice has left many car owners in difficult situations. The adjuster mentioned instances where elderly individuals, who believed that their car would be the last they ever owned, had their vehicles deemed total losses. Fixed-income individuals and car collectors who had painstakingly restored vintage cars also faced the challenges of suddenly having to find new vehicles.
The adjuster stressed that informing car owners of the total loss determination was not a pleasant task. Many people did not anticipate having to go car shopping unexpectedly. The adjuster expressed sympathy for the owners and acknowledged the lack of upside in these conversations.
In conclusion, the adjuster shed light on the changing dynamics in the insurance industry regarding total loss claims. The rise in repair costs and the complexities of repairing newer cars have resulted in more vehicles being deemed total losses. This has had a significant impact on car owners, who find themselves in unexpected circumstances and faced with the challenge of finding a replacement vehicle.