My insurance wants to write off my car. Can I get them repaired when used car prices go up?

Our 2007 Buick was hit by a flatbed trailer while parked in a mall. I did everything right: I filed a police report, I called Intact, our insurance company, and I even found video footage showing the accident. The car was appraised at approximately $3,800 in repair needs at Intact’s preferred body shop. Based on this offer, Intact declared the car a “total loss”, terminated our cover for a replacement rental and offered a $4,500 payout – $4,000 for the value of the car and $500 for HST. When I spoke to the body shop, they confirmed that the damage was cosmetic and 100 percent repairable. In this market Where inventory shortages have sharply pushed up used car prices and sharply reduced consumer options, it is unreasonable for Intact to consider a repairable car that has no structural or mechanical damage as a total loss. To expect anything to be able to be bought for $4,000 is pure fantasy. Why would they 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 get them to fix it instead, insurance experts said.

“Under the Ontario Automobile Policy (OAP1), used by all auto insurers in the province, the right to repair or replacement 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, Ontario. “In a narrow sense, the insurer can choose between repair or replacement, regardless of the value of the vehicle or the cost of repair. Usually they pay the lesser of the two.”

So why would an insurance company decide to write off a vehicle with only cosmetic damage?

Anne Marie Thomas, director of consumer and industry relations at the Insurance Bureau of Canada (IBC), which represents the insurance industry, said she cannot provide a threshold at which an insurance company decides to write off a car.

“I can tell you that if the repair costs more than it’s worth, the insurance company will write it off,” she said.

George Iny, president of the Automobile Protection Association, a Toronto-based automotive consumer advocacy group, said insurance companies typically write off a car when the cost of repairs is 70 to 80 percent of market value.

Easier to write off?

“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 fundamentally rebuilt vehicle,” said Iny.

Unfortunately for those drivers who have kept their “old, boring sedans” like Buicks, Chevrolet Impalas and Ford Crown Victorias in tip-top shape, low demand for these vehicles means their value is significantly less than more popular SUVs, Iny said. Therefore, as a rule, they are written off with relatively little damage.

“These vehicles could have many more years of service, are difficult to duplicate in the same condition, and are typically worth less than $7,000,” said Iny.

The insurance company has to tell you the market price for the vehicle, but nothing more – even if you can’t find anything in this price range.

“Your insurance policy is designed to put you in the same financial position you were in before your loss,” Thomas said.

The rules vary by province. Although they are similar in most regions, there are exceptions. For example, in Quebec, an insurance claim takes into account “reasonable repair costs”.

“In exceptional cases like this [we’ve] argued [in Quebec] this ‘reasonable’ could even exceed a vehicle’s market value, and insurance companies have accepted it,” said Iny.

When contacted, Intact said it could not comment on this particular case without the reader’s permission. “If a customer disagrees with the outcome of a claim, there are ways to dispute it,” said Katrina Caguimbal, a spokeswoman for Intact.

value added?

If you can prove your car is worth more than the insurer says, the company could agree to increase the payout, IBC’s Thomas said.

“If you miraculously had your vehicle appraised just prior to the damage and it was valued at $6,000 [instead of $4,000], you could take that to the insurance company,” said Thomas. “Or you can do your own research and dispute it.”

For example, you could check a used car site like AutoTrader for the prices currently being charged 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 dealership if you can find one who will cooperate, Iny said.

If they sell for significantly more, on average, you could take that to your insurance adjuster — but there’s no guarantee they’ll agree, Thomas said. “It could be a tough road.”

But usually the offer reflects the current value of the car in your area, Desjardin’s spokeswoman Jessica Spina said.

“We are constantly following developments and trends in the automotive market,” she said. “Adjustments are made to the different conditions and options of the vehicles.”

If the loss is cosmetic, you may be able to receive a reduced cash settlement and keep the vehicle, Mitch’s Gemmiti said.

“This would allow a customer to use part of the vehicle’s value to repair it if they so choose,” Gemmiti said. “These options may be more limited if the vehicle has structural damage that does not allow it to be driven by Ministry [of Transportation] standards.”

But if your insurance company agrees to give you the car, make sure you drive legally and can register it, IBC’s Thomas said. If you can’t register it, you can’t insure it.

“It can be a slippery slope,” Thomas said. “Each province has laws about branding salvage products.” In Ontario, for example, insurers must determine whether vehicles they write off (ie, classify as “total loss”) should be labeled as “irreparable” or “junk.”

Salvage means it can be repaired, but it’s not considered “roadworthy” or insurable unless it’s been rebuilt and passed structural and safety inspections, Thomas said.

But if it’s been branded beyond repair, it can only be used for parts and never allowed to be driven again in Ontario, she said.

“If it’s beyond repair, that means this car is now a vehicle organ donor,” Thomas said.

Ask for a referee

If you’re still not satisfied with the insurance company’s offer, Ontario’s insurance law protects a consumer’s right to contest the value of the car, Gemmiti said.

If it comes to arbitration, you would need to get a written appraisal of your car, the insurance company would do the same, and an independent arbitrator would look at both and decide on a final resolution, Gemmiti said.

Do you have a driving question? send it [email protected] and include “Driving Concerns” in your subject line. Emails without the correct subject line may not be answered. Canada is a big country so let us know where you are so we can find the answer for your city and province.

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