Car insurance and coverage in case of total loss

So my friend had a car accident. It was fault of other drivers as per police report. Kind of a cascading accident on highway.

Since the car is a Porsche Boxster, it seems insurance company might push for a lumpsum offer instead of repairs. Car is 12 years old but was in very good condition just before the accident. So just wanted to be prepared

How would you suggest to go about this?what factors to consider ? I am aware that there is a thing called Current value of the car which is determined by the age , mileage etc. But is it really a fair estimate of the replacement value of the car? Not talking about replacement with a new car. But a replacement which could be considered like-to-like.

And by the way, what determines that a vehicle should or should not be classified as „an accident vehicle „ as it impacts the future sale price. Isn’t it?

I hope your friend is well.

I bought my car in November 2019 for 22,000 EUR, my car insurance (AXA) estimates the value of the car at 32,700 CHF, go figure!

Not sure how this is handled in Switzerland or anywhere else as I thankfully never had as much as a scratch, but total loss in my insurance is referred to as:

  • the repair costs exceed the present value
  • for the compensation type “present value supplement” or “purchase price guarantee,” the repair costs exceed 60 % of the value of the vehicle during the first two years in operation.
    “Present value of the car” past the 8th years since purchase is calculated to 40-50% of purchase price +10%.

If I was your friend, and as a huge petrolhead myself, I’d resist accepting repairs in a car that had a very serious crash. Various components (ie the whole frame, the axle, the transmission) can get bent out of shape which no reasonable repair effort can fix, and can lead to more problems later. Personally I’d take the lump sum, no like for like or repairs, and go buy a car I rate as a car I like. I trust my own judgement of what a car is worth far more than any insurance agency’s.

P.S. A used Audi S3 or BMW M2 is a far far better driver’s car than a used poor man’s squished VW Beetle (I mean Porsche overall and Boxter in particular).

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Thanks for detailed input. I will pass that along.

I had a similar experience in the past, I don’t remember the numbers so I will just invent them:

I had an accident and it was not my fault, reported by the police too, so to pay would have been the other car insurer.
Car was about 10 years old, it was valued 5k, the price to get the same car from a private seller was around 8k (really a common proportion case on that age price).
The quotation to fix it was 5.5k, you don’t need to bend the chassis or anything else to have a big amount here, because the quotation contains the fix using brand new parts and to paint scraped parts as new, in my case I had front and rear bumpers, one wheel with brake and shock absorber, airbags.
The insurer said it was a total loss, and that I would got 5k as per the actual value of the car, as stated before I would needed 8k to get the same car.
What came out is that the rules says that if it’s total loss the insurer gives you the money but keeps the car (unfortunately I cannot recall where this comes from, better to double check), so getting 5k I would have been forced to give them the car!
Since I loved the car and it was really well maintained, I talked to the mechanic and found a way to go at 4.8k of repair cost (I renounced to fix a minor aesthetic damage and found a second hand wheel), this way I was able to keep the car.
The insurer was not happy about that, they called me several times to try to change my mind, I guessed that they wanted (this is just an example) to gave me 5k, to spend 1.5k in repairs and to sell it for 8k.

Sorry for the long story (don’t be picky with the numbers :sweat_smile:), but I wanted to try to give you an idea on how they can play on this.

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Thanks
But when you finally kept your car, was it classified as „accident car“ ?

I think it all depends on how big the damage is, and some of it is not visible externally

I also think the cost to replace a Porsche even with similar age would be higher than the current value of the car because if inflation in old car market. Similar to your case where a replacement car was costing more than current value

It was not classified as “accident car” or “totaled car” because the amount to repair it was lower than the value, and there was no issue with safety.
I think the rules are not made for those passionate in youngtimer cars, so there is a big range of cars between 20 and 10 years old that are valued less than what the real value on the 2nd hand market is. I would say is not depending on the brand but on how much a car is requested.

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Not sure I understand, they gave you 5k and you kept the car? Why would they give you 5k and keep the car themselves then?

Sounds like a ton of business hassle to repair and sell cars, I am struggling to believe big insurers get into this hustle for 1-2k profits, sounds more like what a small used car yard would do (and does, in Greece). I could be wrong, of course.

They gave me 4.8k and I kept the car because it was under the total loss amount, they wanted to give me 5k with the right to keep the car because of the total loss reached. I can try to retrieve the real numbers just for our curiosity.

I think you’re right I was just oversimplify, I don’t think they do that by themself, I think they just sell it to those that fix it or use it for spare parts.
My intent was only to say that they had a big interest to keep the car, and that is not normal for an insurer if you don’t make money out of it. I think it’s just a way to mitigate their expenses but of course I can’t prove that, only suggesting to check accurately if you want to keep the car.

I remember that even on the normal fixes my mechanic was able to set a better price, the initial calculation was made by their expert, I guess they can inflate prices a little bit to be over the threshold by a good range.

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All makes sense, thank you! No need to find the real numbers.

Always!

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This primarily applies to collision insurance (e.g. the accident is your own fault). Since the other car was at fault, your friend has a liability claim against the other car. The claim is covered by the other car’s third-party liability insurance.

The full third-party legal liability can go much further than just the actual cash value of the damaged car. For example, it can include compensation for loss of income, etc. Depending on the case, legal liability may be determined by a court of law.

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Actually for this case , it is limited for the damage to car fortunately. Let’s see what insurance claim process leads to

Thanks for the input though

Well, it would be the guilty party making an insurance claim against their liability insurance. Their insurance provider will then make your friend an offer. Your friend can accept the offer or, if they are unsatisfied with it, take it to court in hopes of getting better compensation. In the latter case, the court would decide on the guilty party’s liability for the property damage.

If he has receipts for new parts, that can increase (a bit) the insurance offer.