Q: Can a auto insurance company hold your salvage title hostage?
I was in an auto accident 7/5/19 by someone who has Alliance United car insurance. They have 798 reviews on Yelp with 1 star. They totaled my 06 Acura TL that had little damage to its front end. The guy policy limit was $5000 and my car value was $7,800. I decided not to sue and told them to send me the check to get it over with. I finally get the check and the memo said "for car repairs". I asked the adjuster who was going to pick up the car, she said my file say "retaint" meaning I was retaining the vehicle and I get to use the $5000 to fix my car. This was 5 weeks ago, I went to the DMV to see why I haven't received my salvage title yet and it turns out the insurance company never notify the DMV. I confronted insurance company and got some new adjuster guy and he is telling me there is an error on my file and they will like the car. I told them no because I've had it in the shop and paid $4,500 to have it fixed. They won't send the info to the DMV now so I can have my salvage title.
A: To determine if your car is a Total Loss, you must follow the Total Loss Formula.
Total Loss Formula (in California) is Cost of Repairs + Salvage Value ≥ Actual Cash Value.
Salvage value is typically 25% of the Actual Cash Value (but each insurance company uses its own percentage, so these calculations are more or less a guess). ($7,800 x .25 = $1,950)
Here, the Total Loss Formula $4,500 + $1,950 = $6,450, which is obviously less then the Actual Cash Value of $7,800. As a result, there is an argument to be made that you shouldn't receive a salvage title but should retain your original title.
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