How to buy back a totaled car cheap.

[shadrach74]

Originally Posted by cfos

And that is the life lesson. There are no "fare" police. There are only days you are at a loss, break even, or go ahead. And if you think about it, if you come out ahead, is that fair? I'm sure you don't consider a loss as being fair, do you? Well, in order for you to come out ahead, someone has to come out at a loss. You can't agree with being ahead and then complain about being fair. There is a reason Thomas More's Utopia is a work of fiction.

The insurance company is paying out because their client pulled out in front of another vehicle collide with it and caused damages. It's an outcome they plan for and is underwritten into the premium. You have no idea if the insurance company "lost" on this policy or not. For everything that went wrong in this situation, the payout is relatively minor.

[cfos]

Originally Posted by shadrach74

The insurance company is paying out because their client pulled out in front of another vehicle collide with it and caused damages. It's an outcome they plan for and is underwritten into the premium. You have no idea if the insurance company "lost" on this policy or not. For everything that went wrong in this situation, the payout is relatively minor.

I agree with the first statement, not the rest. If you were following along, the people involved are high school students, yes? If the pay out is the $8-10k Jake (plus whatever the other side may be) is suggesting... I'd argue I do have an idea of whether the insurance company lost out. Assuming the kid is 16-18 years old, he couldn't have been driving for more than what? 3 years? You think this kid paid $8-10k+ in premiums over >3 years?

My guess is the kid was a part of the parent's policy and thus, insured for less as a result of a family plan. Even so, if the kid paid for his own policy, I seriously doubt he was paying in a like amount to what is being paid out, in total. Just think about it and revisit your statement.

[thstone]

Insurance is based on aggregate risk and not based on what any certain indidual paid in during a length of time or what the insurance company paid out for an accident.

Each of us are placed into a risk group based on factors such as age, driving history, location, value of car, car model, etc. Then each of us pays what the insurance company calculates (based on historical actuals for each risk group) to be our "share" of covering ALL of the claims. Those participants who are placed in higher risk groups pay a higher share of the total and vice-versa for the lower risk groups. Over time and over a large number of participants, the number of accidents is fairly stable as are the total cost of claims so it becomes fairly easy for an insurance company to estimate the cost of insurance to an individual.

Thus, it is generally irrelevant whether any single person has paid in enough over time to cover their particular claim. We all cover some amount of all of each others claims!

Alternatively, we could all be "self-insured" where we pay into our own personal fund and pull from that fund when we need to pay a claim. However, that would require each of us to pay in at a very high rate so we could each cover the worst case claim.

Generally, it is much cheaper to "share the risk" among a larger number of participants since the odds of an expensive claim is fairly low. This keeps the amount we have to pay lower yet still provides each of us worst-case coverage.

This is why insurance, as most of us know it, exists.

[jdlmodelt]

I just added my 16 year old daughter to my policy and the guy stated it would go up just slightly...$1800/year.

Originally Posted by cfos

I agree with the first statement, not the rest. If you were following along, the people involved are high school students, yes? If the pay out is the $8-10k Jake (plus whatever the other side may be) is suggesting... I'd argue I do have an idea of whether the insurance company lost out. Assuming the kid is 16-18 years old, he couldn't have been driving for more than what? 3 years? You think this kid paid $8-10k+ in premiums over >3 years?

My guess is the kid was a part of the parent's policy and thus, insured for less as a result of a family plan. Even so, if the kid paid for his own policy, I seriously doubt he was paying in a like amount to what is being paid out, in total. Just think about it and revisit your statement.

[BrokenLinkage]

@BIGJake-
Just wanted to say I'm impressed with your level headed maturity and reasoned thought throughout this escapade. Not sure I could have have pulled off such equanamity at your age. If only your grammar could catch up...
I feel pretty sure most of us would be less free with the preaching if you were a bit older. And yeah, I question the wisdom of putting such a fine sportscar in the hands of someone that hasn't suffered enough mediocre cars to really appreciate it, much less a high profile car that is expensive to maintain at a time of life when funds are usually scarce and any flying above the radar results in getting shot down.
But I like your attitude and humility, keep making lemonade. And if you can keep your ego separate from the car, and afford to maintain it, then I say ignore PL's usually very sage advice and just drive the stick out of it everywhere you go!
BOL with the replacement.

[BIGJake111]

Originally Posted by jdlmodelt

I just added my 16 year old daughter to my policy and the guy stated it would go up just slightly...$1800/year.

Ours went up 1.200 and that was with adding my car as well, sorry to hear. What does she drive?

[shadrach74]

Originally Posted by cfos

I agree with the first statement, not the rest. If you were following along, the people involved are high school students, yes? If the pay out is the $8-10k Jake (plus whatever the other side may be) is suggesting... I'd argue I do have an idea of whether the insurance company lost out. Assuming the kid is 16-18 years old, he couldn't have been driving for more than what? 3 years? You think this kid paid $8-10k+ in premiums over >3 years?

My guess is the kid was a part of the parent's policy and thus, insured for less as a result of a family plan. Even so, if the kid paid for his own policy, I seriously doubt he was paying in a like amount to what is being paid out, in total. Just think about it and revisit your statement.

I don't think you really understand how insurance works... See thstone's very simple and accurate explanation.

To put a finer point on it: Insurance companies don't price individual policies to be profitable. They price the that particular risk group to profitable.

In simply terms the concept is this - if underwriting shows a $20,000 payout for every 50 teenage drivers annually, they build a policy based on that info that will generate enough revenue from the insured drivers in that risk pull to cover the planned costs (based on stats) plus a number of other multipliers plus the company's administrative costs, plus a margin.

So if on average the payout $20K annually for every 50 insured and the average premium for this group is $1600; the company has $80K in revenue for every $20K it pays out.

I've completely made up these numbers, but the concept stands true.

Car insurance companies don't ever really loose, the just win by a lesser margin some years. They would not be going concerns for very long if they weren't underwriting policies that made sense...

It's not winners and losers, it's a number's game. Jake is a line item, it's not personal. A decent adjuster will not be taken advantage of, and it's Jake's responsibility to be his own advocate (the adjuster likely won't). It's not being greedy, it's being prudent.

[cfos]

Originally Posted by shadrach74

I don't think you really understand how insurance works... See thstone's very simple and accurate explanation.

To put a finer point on it: Insurance companies don't price individual policies to be profitable. They price the that particular risk group to profitable.

blah blah blah, numbers, arithmetic, etc.

Actually, I do understand how insurance works without going into history of house fires, I'm just looking at the data in a different way -- you know, like when a President-elect wins by popular vote, yet loses the election by the electoral vote, or how Michael Jordan didn't have fouls called on him and gets game winning shots (or LeBron's "Crab dribble"), or my father's favorite argument ''Mickey Mantle would have had the most stolen bases ever, if he didn't have bad knees". It's just a simple argument. No need to break out the HP 12C.

Surely, we can take something out of context (right?) and look at the question in a different way, yes? I certainly stomach enough of that here without commenting on everything about guns, car-flipping, etc.

If not, fine. You win. I'll say this now, and you can all sleep well -- The 986 really IS A CLASSIC! All things before and after are crap!!! Standard transmission should be required to vote!!! The Boxster is SO NOT A GIRL CAR!!! All things even, no one should ever buy a new car because of all things in life, car purchases must equal out and balance when it comes to a car purchase and we cannot accept a loss on this single purchase, ever!!!! BOB is NOT A UNICORN!







But, if you can conceive of what I proposed, bearing in mind that I'm not concerned with the ins, outs, and what-have-yous of what goes into the calculation of the rate... I am saying, in this particular instance, I don't think the insurance company got enough money for the individual through their set rate, to offset what they are paying out.

Stating it simply, insurance company received "x"; insurance company pays our "(x1-x2)+y"; (x1-x2)+y > x. QED.

That's it.

Now, having said this and since you and thstone are so much more knowledgeable about rate calculation than I, what is the modification for a person who gets into the accident? Is it just a simple jump to a higher risk group? What amount of a pay-out determines if someone is dropped? What if the driver is a member of a family policy? Does the policy go up if the kid is dropped? If the parents drop the kid do they return to the pre-kid rate? I'd assume teen drivers are already in a high rate group, so what is the next step? 1 standard deviation (SD)? Is it 2? Do we employ the Avagadro constant? Moreover, how do these accidents, or accidents such as this, go into the recalculation of rates of everybody? Do "safe drivers" go up a 1/2 a SD? How frequently are the rates calculated? How is it that Allstate has/had(?) that policy where rates actually go down over time? Was that all a lie?

[Timco]

Originally Posted by cfos

Actually, I do understand how insurance works without going into history of house fires, I'm just looking at the data in a different way -- you know, like when a President-elect wins by popular vote, yet loses the election by the electoral vote, or how Michael Jordan didn't have fouls called on him and gets game winning shots (or LeBron's "Crab dribble"), or my father's favorite argument ''Mickey Mantle would have had the most stolen bases ever, if he didn't have bad knees". It's just a simple argument. No need to break out the HP 12C.

Surely, we can take something out of context (right?) and look at the question in a different way, yes? I certainly stomach enough of that here without commenting on everything about guns, car-flipping, etc.

If not, fine. You win. I'll say this now, and you can all sleep well -- The 986 really IS A CLASSIC! All things before and after are crap!!! Standard transmission should be required to vote!!! The Boxster is SO NOT A GIRL CAR!!! All things even, no one should ever buy a new car because of all things in life, car purchases must equal out and balance when it comes to a car purchase and we cannot accept a loss on this single purchase, ever!!!! BOB is NOT A UNICORN!


But, if you can conceive of what I proposed, bearing in mind that I'm not concerned with the ins, outs, and what-have-yous of what goes into the calculation of the rate... I am saying, in this particular instance, I don't think the insurance company got enough money for the individual through their set rate, to offset what they are paying out.

Stating it simply, insurance company received "x"; insurance company pays our "x+y"; x+y > x. QED.

That's it.

Now, having said this and since you and thstone are so much more knowledgeable about rate calculation than I, what is the modification for a person who gets into the accident? Is it just a simple jump to a higher risk group? What amount of a pay-out determines if someone is dropped? What if the driver is a member of a family policy? Does the policy go up if the kid is dropped? If the parents drop the kid do they return to the pre-kid rate? I'd assume teen drivers are already in a high rate group, so what is the next step? 1 standard deviation (SD)? Is it 2? Do we employ the Avagadro constant? Moreover, how do these accidents, or accidents such as this, go into the recalculation of rates of everybody? Do "safe drivers" go up a 1/2 a SD? How is it that Allstate has/had(?) that policy where rates actually go down over time? Was that all a lie?

So, guns and car flipping aside, if I get a new policy tomorrow with a new company and total my car day 1, will my payout or settlement be less than if my accident happened with my current carrier of 10+ years?

The lowering rate thing is based on driving class. Someone with no accidents for 4 years is less likely to cause an accident than someone 2 years accident free. We have Am Fam and our rate is way low because our house, rentals, my commercial policy, and my business liability policies are all with them. I guess that makes me a better driver?

[cfos]

Originally Posted by Timco

So, guns and car flipping aside, if I get a new policy tomorrow with a new company and total my car day 1, will my payout or settlement be less than if my accident happened with my current carrier of 10+ years?

The lowering rate thing is based on driving class. Someone with no accidents for 4 years is less likely to cause an accident than someone 2 years accident free. We have Am Fam and our rate is way low because our house, rentals, my commercial policy, and my business liability policies are all with them. I guess that makes me a better driver?

I have no idea. Do you have gap insurance? I don't have the whole package like you; I just pay in full. I do know that my family's rate, over time, varies during renewals. Sometimes, I find the same or better coverage for less than the new rate, and I move. But, what if the driver starts at 16 and has no accidents for 4 years. Is this 20 y.o. less likely to have an accident? Is his rate less that a 23 y.o. married returned missionary that didn't drive for 2 years? I dunno. Oh, and I'm sure you are a better driver -- I mean, you drive standard and are more "in touch" with your car.

[Timco]

Originally Posted by cfos

I have no idea. I don't have the whole package like you; I just pay in full. I do know that my family's rate, over time, varies during renewals. Sometimes, I find the same or better coverage for less than the new rate, and I move. But, what if the driver starts at 16 and has no accidents for 4 years. Is this 20 y.o. less likely to have an accident? Is his rate less that a 23 y.o. married returned missionary that didn't drive for 2 years? I dunno. Oh, and I'm sure you are a better driver -- I mean, you drive standard and are more "in touch" with your car.

Pretty sure there's only one blanket drop in rate around 22-24 regardless of real hands on driving due to maturity. If there's tickets or accidents, forget that drop. Not much windshield time for missionaries. (I joined way after missionary age)

Not sure about the better driver comment. I've never claimed that and am quite sure your car will cross the finish line before mine. I've never owned an auto trans.