Update on my Avalon

[moving2]

ShiningArcanine-

One one hand, you stated that you think there is a mob mentality going on here and that what a car is worth is an individual decision, and that you do not expect the insurance company to agree with your valuation.

On the other hand, you imply that you think the insurance company should give you full replacement value and even go so far as to say "I probably should write to someone in the state government giving him a piece of mind regarding what cars in collisions are deemed to be worth, but that is for another day."

I think rangerxl put it best, so I'll repaste it here:

"The replacement value is what it would cost to buy an identical 1995 Avalon with similar miles. What it costs to buy a car that is 12 years newer is completely irrelevant.

A 2007 Avalon is NOT a direct replacement for a 1995 Avalon. The 2007 Avalon has 0-100 miles on it, a warranty, no wear and tear, and is a NEW car. To expect the insurance company to replace a 12 year old car with a brand new one is just rediculous. It doesn't matter that the 1995 was bought new either. It was new in 1995. It isn't now. It's current direct replacement is another 1995 Avalon."

So, how do you respond to this post, specifically? That is, how do you expect an insurance company to give you replacement value considering the above points that rangerxl has so clearly made? As an insurance company, how would you justify giving anything close to replacement value while ignoring the following factors:

- depreciation
- miles on vehicle
- lack of or reduced warranty
- wear and tear
- new features/mechanicals on different model years or even complete model changes
- new car vs. used car
- potential fraud (crash an old vehicle, get a new one!)

You seem to bring up 2 different issues: what the car is worth to you personally, and what it *should* be worth to an insurance company, to the point where you feel you might write someone in the state government about it. I understand how you feel about the car's value to you, but I do not understand how you feel an insurance company should look at it, and I'm curious how you would make a case to your state government considering the points made above.

Would love to hear what you have to say about this.

 

[GROUCHO MARX]

One man's trash is another man's treasure.

 

[ekpolk]

And then there's the issue of public policy. To require insurance companies to replace old cars with new ones would be horrible public policy (and please don't get the idea I have any sympathy for insurance companies -- I don't). Not only would this create a huge incentive for fraud, but it would also represent an attempt to have an illusory "free lunch." If the law did require insurers to replace old cars with new ones, they'd simply have to jack up their rates to reflect the fact that they'd be forced, in effect, to pay $30,000 for a car that's worth maybe $5,000 (these figures offered as an example). We would end up, in effect, making car payments through the bureaucracy of our insurance companies.

Shine, would you be willing to pay $30,000 for a car that's actually worth only $5,000? Assuming your answer is "no," why should an insurance company be required to do so? And if they are, why should they not charge much higher rates to reflect their much higher outlays?

 

[Vaca]

One of the fundamental concepts of insurance theory is indemnification - simply meaning that an insured value should be no more than the actual value.

Like others have stated and/or insinuated earlier in this thread, it is very dangerous to insure something for more than it's actual value. Actual value is rather easy to determine on such a common object as a '95 Avalon. It gets quite a bit more complicated when you're considering insuring, say, a singer's voice, or a fashion model's legs, or even an uncommon classic car, or a piece of art.

If this kid thinks his parents' Avalon is really worth $38,000, then he is pretty clueless or else he's yanking our collective chain.

 

[jsharp]

Ok, I've now cleaned the coffee off of my monitor and decided - No way is this thread real. I thought this board had a no troll policy?

 

[c502cid]

Jsharp, between this and the accident thread, no one could make up something this good! Best entertainment all week!

 

[drivewaytech]

It is not at all to be expected that a new car be offered to replace an older car that has been totaled. However, it would be nice if I did not have to pay the exact or higher monthly premium for insurance when my auto turns 5 years old as I did when I bought the car new. Example: $1200 per year to insure a $25,000 vehicle today, $1200 per year to insure a $3500 vehicle 5 years later. Yes, life is grand... oops forgot about inflation... Life is a couple hundred grand.

 

[ekpolk]

Originally Posted By: jsharp
Ok, I've now cleaned the coffee off of my monitor and decided - No way is this thread real. I thought this board had a no troll policy?

Yeah, you're right. He hasn't re-appeared, and the longer that goes on, the more "troll-ish" it looks.

Perhaps it's time to apply a little of this: