Auto Insurance Omaha Nebraska NE

Reader’s Question:

Five years ago, I received a check from my insurance company in Omaha, NE for a hail damage claim. But instead of using it to fix my car, I used it to pay off my car which at that time was being financed. Recently, I was in a serious accident that left my right passenger side fender knocked down. Now, my problem is that my insurance company is telling me that since my first claim was not used for the hail damage, they would have to deduct the amount of that check from the cash value of my car. The cash value of my car is $3,000 minus $500 deductible minus $1800 (hail damage check). That leaves me with $700.00. Can they do this when I’ve been paying full coverage on this car since I paid it off?

Joe

Omaha, NE

Yes. Your car insurance company in Omaha, NE can reduce the settlement of your new damage claim after knowing that your first insurance check was not used for the hail damage. When they sent you the insurance check, they know how much the total cost would be for your car’s repairs due to hail damage. Your insurance company is now able to deduct the amount of the pre-existing hail damage claim from their calculation of your vehicle’s actual cash value.

Your insurer is again correct that if you want to keep the car, you would need to pay them the cost of the salvage value since your car is being declared a total loss. To see if there’s enough left over to buy back the car, you would need to see if the amount you’re left over after the deduction of the hail damage claim and the deductible are taken into account. In your case, it is usually deducted from your settlement amount. But if you decide to buy it back, keep in mind that you would now have a salvage title, which may be difficult to find auto insurance for.

It will now be a personal choice for you to carry full coverage, meaning liability plus collision and comprehensive coverages. Many policyholders decide to take off collision and comprehensive coverages after they paid off the car and if the vehicle is so old. The cost of keeping “full coverage” on it does not make sense financially anymore because the car’s actual cash value has become low. I would suggest contacting the consumer division of NE insurance regulator to find out about your specific insurance rights.

 

Tags: auto insurance, automobile