Tuesday, May 24, 2016

Hail Damage and Insurance Lessons Learned

This story comes from a friend.  His older model truck was victim to serious hail damage, and the interactions with his insurance company that followed are quite interesting. 

Here's his first email to our work community asking for advice...

In the recent hail my truck took on some dings. Nothing major (to me) but enough that the repair cost exceeded the value of the truck so the insurance company totaled it (it's a 13 year old truck so doesn't take much to total it). I didn't know what that meant at the time but they gave me two options: 
  1. Sign the title over to them immediately and they give me the value of the vehicle minus deductible,
  2. Keep the truck and they give me the value of the truck minus salvage value and deductible

I chose option 2 because I figured the truck is still drivable, in good shape, just as good as it was before the hail except for cosmetic damage, and I could take my time finding another truck instead of having to do it immediately.
...uh, not so much.
It wasn't explained to me by the insurance company but I now know that  
  • a) my insurance company will no longer insure the truck because they do not insure salvage-value vehicles,
  • b) I need to send my truck title in to the state with a form to get it switched out for a salvage-title,
  • c) I need to have it inspected (and possibly fill out another form) and send that to the state to show that the truck is drivable
  • d) and if I want to drive the truck I need to get it insured by a company that will insure salvage-value vehicles. 
I called the DMV and they told me I can't drive the truck because it hasn't been deemed drivable yet and isn't titled correctly. And, of course, it isn't insured. What a mess.
Has anyone dealt with this type of situation before? If so, do you have any advice for navigating through the state process for salvage titles? Can I sell the truck without first getting the salvage title (in other words, can the new owner do that)? Can I insure the truck without getting a salvage title? Is the salvage title only needed if I sell the truck?
Thanks for any info you can give.

And here's his next email that tells the story of his resolution to the situation...

As a follow up to my post about hail damage I wanted to provide an update on some things I learned so everyone can benefit if faced with this situation.
First, the insurance company (Travelers) was wrong in claiming that the vehicle must get a salvage title. It took me a while to convince them but they finally came around after doing some research on their own. In the state of Texas, hail damage does not constitute requiring a vehicle to get a salvage title if the cost of repairs is more than the value of the vehicle. This makes perfect sense when you think of a salvage vehicle as being mechanically unsound and worth more in parts than as a whole. Obviously hail does not affect the mechanical quality of a car, only the cosmetic appearance of a car. I spoke to the DMV several times to validate the information, and the insurance company also validated the information. So the first part is done. I do not require a salvage title.
Second, the insurance company dropped me from coverage claiming that they do not cover salvage title vehicles. I spoke with them about this as well. Since the vehicle is not a salvage title vehicle they can’t drop my coverage. They said I would need a written form from a mechanic to state the vehicle was safe to drive. I balked. I spoke to a supervisor (2 of them actually) and told them the story, how I was not given all of the information to make an informed decision, etc. and said if they couldn’t cover the vehicle I would have to find an insurance company that could, and take my homeowner’s policy and other auto policy with me. They notified me a few hours later that they do deem the vehicle safe to drive (go figure) and will cover me for liability, which is all I wanted.
So the end story is good, the path getting there was painful. I will likely still change insurance companies after this experience. Bottom line: if you have hail damage to a vehicle that costs more to repair than the value of the vehicle you do not need to get a salvage title. And don’t be afraid to fight your insurance company for what you believe to be fair.
Be safe out there. 
I just wanted to post this as a PSA for anyone out there dealing with a similar situation.

Have a great day.