Salvage Your Claim
Serge Semirog
A salvaged vehicle is an automobile that has been repaired after having been declared a total loss by an insurance company. In North Carolina, a total loss is when the vehicle is damaged in excess of 75% of the car's fair market value. Once it has been damaged in such a way, the vehicle is assigned a salvaged title which must be declared in a damage disclosure form when the vehicle is transferred to a new owner.
Now imagine that this poor unfortunate car gets in another accident and the new owner opens up an insurance claim. Let's consider what happens when the new owner asks to recover for property damage to the vehicle and the car's diminished value.
When it comes to property damage on a salvaged vehicle, distinguishing between prior damage and damage accrued as a result of the accident may present a potential problem.
The value of the salvaged vehicle is fairly difficult to determine as it may be impossible to find similar vehicles on the market.
As a result, insurance company may decide to arbitrarily reduce the value of your car by up to 50% solely because of the salvage title .
As for diminished value (assuming that the car did not, once again, depreciate more than 75% of its value and is not a total loss), what can you expect to recover? The issue here is that once again the fair market value is in question. The insurance company's appraiser will likely crunch some numbers and ascertain that the vehicle is worth so little to begin with that the diminished value would be negligible.
While you may be purchasing a salvaged car for thousands less than a comparable vehicle with a clean title, a salvage title certainly has drawbacks when it comes to auto insurance claims. A salvage title does not bar your claims, but the road to recovery becomes much more difficult.
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