The parking lot outside the demolished 7-11 store in Moore is a temporary junkyard for battered vehicles. Crumpled cars line up awaiting their owners, who can then tell their insurance company where the car is so it can be towed to a real junkyard.
How can you tell who owns a car, or even what kind of car it is, when it is battered, mud-caked and nearly unrecognizable? You rely on the vehicle identification number.
So far, there have been more than 12,600 auto insurance claims resulting from Oklahoma?s recent tornadoes. Some of these claims are total losses; others are for anything from hail damage to windshields blown out by flying debris.
If a car is a total loss, it is considered beyond repair or it is determined that it would cost more to repair it than the car is worth. Among the basic coverage types for auto insurance is comprehensive coverage, which pays for damage from natural disasters. If you are making payments on a car, the lender requires comprehensive coverage. While this is optional coverage for those who have paid in full for their cars, many choose it to protect their investment in their vehicle.
How insurers pay total loss claims for cars
Auto insurance provides comprehensive coverage on an actual cash value (ACV) basis, which means the insurance company owes what the car is worth in the local market area at the time of the loss. To determine what that cost is, insurers get quotations from qualified dealers in the area or check nationally recognized sources, such as Kelley Blue Book or the NADA Guide from the National Automobile Dealers Association.
Full replacement cost coverage is not available under a typical auto policy, although some insurers provide new car replacement for a limited number of years if the auto is insured when new.
If you are financing a vehicle that was totaled by the tornado, the insurer is likely to issue a claim check with both your name and the lien holder?s name on it. You and your lender will then agree on how to release that claims money.
Sometimes, the loan amount is more than the ACV value of the car. Many people in this situation have extra coverage through a Guaranteed Auto Protection (GAP) endorsement on their auto policy or through a separate GAP policy.
If you disagree with the auto valuation
Ask your claims adjuster to explain how the settlement amount was derived. If you still disagree, you can ask for an appraisal of the loss. There is a specific provision in the policy for appraisal which lists the responsibility of both parties, so check your insurance policy for this information.
If you remain dissatisfied, discuss your concerns with your insurance company before cashing the check. You?ll want to understand if cashing the check releases the insurer from further liability; many times this information is on the back of the check.
If you decide you want to hang onto a salvaged vehicle, you would be responsible for the cost of repairs.
What happens if you purchased only the minimum state-required liability coverage or had no auto insurance? Unfortunately, you will not have paid for coverage related to natural disasters. You may, however, qualify for a casualty loss from the Internal Revenue Service?you can find more information in this IRS Disaster Resource Guide. Additionally, the Oklahoma Insurance Department has online resources for tornado victims and a consumer hotline: 1-800-522-0071.
Source: http://disasternews.iii.org/?p=581
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