Your Safety’s At Stake: Total loss consideration and standard auto insurance carriers

By: Denise Koslowsky

Not all auto insurance policies are the same. Every carrier offers differing contracts, coverage and of course, costs. Advocate Brokerage prefers that our clients insure their automobiles with one of our elite carriers whenever possible. We have shared articles with notes as to why in the past including a real life example from our very own Denise Koslowsky that you can find here.

A lawsuit against Nationwide Insurance making the news recently caught our attention and brought up an important point that we wanted to share. The lawsuit is an appeal being heard by the Pennsylvania Supreme Court in the case of Berg v Nationwide, and it is intended to assess how much responsibility a carrier has for the quality of collision repairs.

The Case Details
Following an accident, the insurance company recommended that the Berg family have their vehicle repaired at one of their direct repair program shops.

This is common; most conventional insurance companies strongly advise that you utilize their own network shops to repair any damage that occurs to a vehicle during an accident.

Once the vehicle was evaluated at the repair facility, they recommended that the vehicle be considered a total loss due to the extensive damage done to the frame. Nationwide disagreed and according to a summary of the case, they said: “repairs are approximately 50% of the actual cash value, Nationwide will never recover the difference in salvage value.” They recommended that the car be repaired.

Your Safety Is At Stake
Contracts and coverage can be very different between an elite insurance carrier and a standard insurance carrier. There are important considerations to make when evaluating whether you are going to choose a standard auto insurance policy to save money or invest in coverage with an elite carrier. We would like to share a few of those considerations and how they apply to your family’s safety.

Total Loss Consideration is the threshold at which the insurance company decides it is no longer worth it to repair the vehicle. For most standard insurance carriers total loss consideration is generally 75% of the actual cash value of the car (it can vary state to state) while for elite carriers such as Chubb, Pure, Berkley One and AIG, it is considerably less, more along the lines of 50%. As described in the case notes above, Nationwide chose to have the vehicle repaired because they would be suffering a loss rather than taking this potentially unsafe vehicle off the roadway.

Re-Inspection is when the insurance company sends someone out to inspect the vehicle after repairs have been made to ensure that the car has been restored to meet safety standards. This is a service that is provided by premier carriers but often not provided by standard carriers. In the case detailed above, court records did not indicate that the vehicle was inspected after repairs were made.

In our opinion, insurance carriers do have significant responsibility to the people they insure. Not only do they have an obligation to keep our roadways safe by making sure that cars that are unsafe are totaled, they also bear a responsibility to inspect vehicles after they are repaired to be sure they are ready to once again travel the roads.

“It’s important you don’t skimp after an accident because if you are putting your family back in that car, it’s got to be safe.”
Chubb Insurance

Final Piece Of Advice From Advocate
We are here to provide you with as much information as possible so that you can make informed decisions regarding your auto insurance. When you consider the safety implications, it makes no sense to take a chance on coverage. We hear every day from people considering making the switch to a conventional insurance policy because the change will save money. While we respect their point of view, we do our best to highlight the differences in coverage from our elite carriers so that you can understand that all auto carriers are not equal. We also want everyone to understand that we really do have your best interest in mind when we recommend certain coverage and certain carriers. In fact, we will obsess about providing the best coverage for your car. If you have any questions related to your automobile coverage, please get in touch with us at 914-723-7100 for a no obligation review. The results may surprise you!

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