So, you have a car. It’s 6 years old with 90,000 miles on it. It’s in good condition, and it serves its purpose. Gets you to and from work. Helps you get your kids where they need to be. You have no payment. You figure you can drive it another 110,000 miles, and it’s worth about $10,000.00. All’s good.
BAM!! Some idiot just ran through a red light while texting on his cell phone. He hit your vehicle, and the estimate to repair it is $7,600.00, so it is now considered totaled under Alabama Law (Section 32-8-87 of the Code of Alabama):
(d) For the purposes of this section, a total loss shall occur when an insurance company or any other person pays or makes other monetary settlement to a person when a vehicle is damaged and the damage to the vehicle is greater than or equal to 75 percent of the fair retail value of the vehicle prior to damage as set forth in a current edition of a nationally recognized compilation of retail values, including automated data bases, as approved by the department.
What now? You want a new car, but you don’t want a payment. You owned your car for six (6) years. You bought it new, and you know everything about it.
The guy’s insurance company offers to settle your property damage claim for $10,000.00. The value of your car. So, now you have to either go find a car you can trust for $10,000.00, or you have to buy a new/used car and finance it (unless you have the cash on hand). In that situation, you will now have a payment you wouldn’t have had.
That’s all they have to pay. The value of the car. Nothing else, unless you were injured or can show some other damage, i.e.: receipts for brand new tires, lost wages, etc.
Is this fair? Should they have to pay more for their insured’s stupidity? You have to spend your time searching for a new/used car? You have to put your money out there if you can’t find one of equal or lesser value than the amount offered to settle the claim. You have to endure the stress and anxiety, not the guy who ran the red light.
Most people in this situation disagree with how this process works. Unfortunately, unless you can get the legislators to enact some new legislation, it won’t change.