Ins co wants to total Leaf after it's already fixed! UPDATED

[schatzely]

We were in a car accident with our 2013 LEAF and the LEAF's front end was damaged and airbags deployed. We had the car for 6 weeks before the accident happened and the car has 2500 miles on it. The accident was in the end of October and our car was just fixed and ready for pick up yesterday (3 months after the accident). After a painfully long waiting time for parts, and switching body shops mid-repair, due to finding the first, non-LEAF-certified shop, incompetent to repair it (now it is at a LEAF-certified shop) the cost for the repair has reached $22K and our insurance wants to total the car! THE CAR IS REPAIRED ALREADY AND READY FOR THE ROAD!!! So to me this means they will have to pay for the repairs and then also pay for our lease... Has anyone been in such a situation and what happened?

The first body shop was a preferred shop by our insurance and claimed to be capable of repairing the car. They gave a $13K estimate for repairs. When we caught them in incompetence they refused to finish repairs (I am glad they did, because we did not want them to anyway). We requested the car to be moved to a Nissan LEAF certified body shop and because that shop was not on their preferred list an estimator from the insurance came for a new estimate and gave a $15K estimate. So the car went to the Leaf certified shop and they said they will not be able to give an exact estimate, because the car repairs were already in progress by the previous shop, there were parts that had been purchased but not installed, and there may be additional damage that they may find as they go along to repair it... well the car is now repaired and ready to go. Sure enough the certified shop found additional damage that the previous shop did not, like the whole sub-frame of the car had to be replaced... so their bill is about $9K plus the $13K the insurance already paid to the previous shop for the parts and labor the cost of repair reached what they would have considered total loss. So now we can't pick up our car because the insurance wants to go through their total loss department and potentially total the car, even though it is already repaired, and they will have to pay for these repairs... and in my opinion if they do total it they should also pay off our lease too... it is not our fault their preferred shop and their estimator were incompetent enough to not total it in the first place... essentially they would pay for the car twice?!

Meanwhile if we don't get the car back and we don't get a $26K total value for it (to pay $23K for the lease total loss and cover our investment), we will sustain $3K loss from down-payment and monthly leasing fees for the 3 months that they have been fixing it instead of totaling it in the first place (that is not even counting the wall charger and install, the rentals, after we reached our insurance rental max, and paying for gas)... Don't get me wrong, I am not aiming for having had a free car for 6 weeks (the total time we had it before the accident happened) I am willing to accept not gaining back my monthly lease payments for the time we used the car... But, I don't want to end up having spend 3K for owning a LEAF for 6 weeks (not including home charger, etc). The car is like brand new... 6 weeks of driving, 2500 miles on the odometer and 3 months siting in for repairs, with everything repaired, new sub-frame, new dashboard, new charging ports, new many things, repaired by certified shop, with remaining warranty... If I have to take a 3K loss I prefer to just get the repaired car back... And if we do end up without a car and losing 3K, I will not buy a new LEAF for a long time (as much as I liked it for the 6 weeks I had it), not until the market is actually ready for it (parts are available, more body shops know how to fix them, better re-charging infrastructure where I am located), and insurers know what to do with them after a car accident... I just will not be able to drive everyday in fear that an accident (no matter who's fault) will cost me another 3K loss...

The whole situation is ridiculous and I wonder if anyone else has been through the same issue and how it played out.

Thanks!

UPDATE:

We finally have the whole story from the ins co. The total loss department did an "investigation" and determined that the sub-frame of the car was not damaged by the accident, since the pictures their estimator took at the 1st body shop, before the car was moved to the leaf certified shop, show that the frame is not damaged. So the damage must have occurred during the transportation process. On top of that the parts that were ordered by the first shop for $10K and the insurance payed for did not all make it to the shop or when they did were broken. This resulted in re-ordering of some of the parts and additional labor to the total cost of almost $4K that is not accident related (or direct consequence of it). The ins co will put the $4K under a new comprehensive claim and will pay (less our $100 deductible). They will go after the towing company and the 1st bodyshop to recover these charges. If they do recover any money from the towing co and/or the 1st bodyshop they will refund us our $100 comprehensive deductible. There was additional accident related damage to the car found by the leaf certified shop, so total accident related repair cost was almost $18K (vs $15 estimate), which comes close to their total loss threshold, but it does not cross it and it is already fixed anyway, so they will pay the bills less our total of $150 in deductibles. The ins co will call us after the paperwork is done and payment is authorized. Then we should hear from the bodyshop/dealer and probably will pick up our car tomorrow or early next week. The ins co apologized for the confusing voice mail that their inspector left last Friday and that he jumped prematurely to the conclusion that the car will be totaled! Overall, I am OK with how things are resolving. I hope the ins co will remove the 1st bodyshop from their preferred list...

 

[davewill]

This is why we're always told to never put money down on a lease you don't absolutely have to. If the car is totaled, you lose that money. Unfortunately, I don't see where you have a leg to stand on. It's entirely up to the insurance company where to total it or not.

That said, have you talked to the guys at the repair shop? They may have some insight into why the insurance company is doing this.

 

[schatzely]

davewill, thanks for your response!

I am not saying that I have a leg to stand on... I am just stating my opinion on the situation... as it is a rather unusual situation (or at least I have not been able to find any information on such cases)... the car is after all ALREADY REPAIRED!!! Yes, the insurance can total it regardless of my opinion, and I will probably be behind $3K, in which case I will have to decide against buying another LEAF for now... If the insurance gives me the option to just get my repaired car, I would rather do this instead of losing my investment... Just the way I feel about it... Lesson learned about leasing a car and down payment... We intended to buy off the car before the lease is over, which is why we gave a down payment and lowered the monthly leasing fee (anyway, this info is irrelevant to my original post...) I am just asking if anyone was in a similar situation and what happened; did they have options...

The repair shop has no insight into why the insurance is doing this, they said the car is ready for pick up as soon as the bill is paid and they don't care what will happen to the car... I don't expect them to care anyway...

 

[donald]

In the UK, we can get 'gap' insurance. I'm sure you can get the same in the US, to cover the difference between finance/lease fees and write-off value. But, sorry, that clearly won't help you in this situation as you do not indicate you have it. That being said, you may have a case if the dealer had such insurance available for you but he did not offer it, or should have advised you to take some out. That might amount to failing to meet a professional standard of care.

What might help is to determine if you were responsible for the accident. In typical civil law, rather depends on local rules, if the other party is at fault then an insurance company cannot write your vehicle off, because it never became theirs. You can demand to be put back into the situation you were in before the accident.

However, if you were, or were partly, responsible then it'll get a bit ugly because you will probably find that buried deep in the small print insurance company will likely have a clause in which they take ownership of the vehicle if the claim value exceeds the market rate. Normally that kicks in before the repairs are done, and they simply don't do the repairs and sell the vehicle as [their] scrap. However, if it kicks in after repair then you may well be scuppered.

 

[LeftieBiker]

When I leased I was told, when I asked about GAP insurance, that "Nissan self-insures." I'm not sure if this will help you, but you may be able to get some assistance and at least lose less money.

 

[UBUYGAS]

Make sure you keep the EVSE, at least you can make some money back by selling it on eBay!

What happened when you told this the leasing company.

I'm Pretty sure i read someplace that as soon as the insurance totals the car you will get another leased car and your original $3000 will go towards the new LEAF.

You need to ask the dealer.

 

[RonDawg]

First of all, I'm surprised the body ship went ahead and fixed the car without getting authorization from your insurance company. If they knew it needed an additional $9k of work, and went ahead and repaired it without asking first, I doubt your insurance company would pay.

Second, even if your insurance company did authorize it, now that the car is fixed, totaling it out is simply stupid. The whole point of a total loss claim is to avoid spending more money on repairs than the car is worth. But the horse already escaped the barn here, and declaring the car a total loss means they are paying NMAC for the fair market value of the car, PLUS all the money they spent to repair it.

I know someone who was involved in an accident with her fairly new car, and suffered significant damage, but the insurance company refused to total it. Repairs ended up costing far more than the car was worth (she could have gotten a new one for the same money) but her insurance company let her keep the car.

As far as gap insurance...gap insurance does NOT reimburse you for your out of pocket costs on acquiring the vehicle. It only covers the difference between the insurance payout, and the outstanding due on the loan. If the insurance proceeds exceed what is owed, then gap insurance does not apply.

In the case of NMAC leases, there is a clause in the fine print on the back that says NMAC will accept your insurance proceeds as full reimbursement for the car, but that you will not be refunded any money in the event insurance proceeds exceed payoff. I am not at home at the moment, otherwise I will quote the exact verbiage from the contract.

 

[RonDawg]

What might help is to determine if you were responsible for the accident. In typical civil law, rather depends on local rules, if the other party is at fault then an insurance company cannot write your vehicle off, because it never became theirs. You can demand to be put back into the situation you were in before the accident.

However, if you were, or were partly, responsible then it'll get a bit ugly because you will probably find that buried deep in the small print insurance company will likely have a clause in which they take ownership of the vehicle if the claim value exceeds the market rate. Normally that kicks in before the repairs are done, and they simply don't do the repairs and sell the vehicle as [their] scrap. However, if it kicks in after repair then you may well be scuppered.

That's not how it works in the US. Whether or not a car is totaled has nothing to do with who is at fault. It's purely a financial decision: are the repairs going to cost more than the car is really worth?

Fault only comes into play when it comes to who reimburses who. And if you file a claim, you are agreeing to play by the insurance company's rules, including at what point they consider a car's damage to be uneconomical to repair. Even if I'd rather they total my car because I feel its value has diminished and that I feel "it will never drive the same way again", if my insurer insists on repair vs. write-off, I have little recourse. The insurer is only obligated to make me "whole" again.

Conversely, a lot of relatively recent-vintage cars are ending up in junkyards with what appears to be repairable damage, because the costs to repair them exceed their fair market value. If my 2006 Audi were to be involved in anything but the most minor of accidents, it would likely be totaled.

 

[TonyWilliams]

... we will sustain $3K loss from down-payment and monthly leasing fees for the 3 months that they have been fixing it instead of totaling it in the first place...
The whole situation is ridiculous and I wonder if anyone else has been through the same issue and how it played out.

Thanks!

Exactly why you should never put a "down payment" on a lease. It's not a Nissan problem, or an insurance problem. You paid the money and should have known that is 100% at-risk.

 

[garsh]

Ask the insurance company if you can purchase the totaled car.

I know many people who've done this with older cars. The car is totaled because it's not worth the cost of fixing everything. They purchase the car few a couple hundred dollars from the insurance company, who's happy not to have to deal with it. Then they get just enough fixed on the car that road-worthy & passes inspection - you don't worry about replacing plastic pieces, straightening body panels, and repainting.

If you're out the down-payment anyhow, and the car is already fixed to like-new condition, then this could end up being a away to recoup most of the loss.

edit:

they said the car is ready for pick up as soon as the bill is paid

Perhaps the insurance company is not planning on paying the body shop at all, and letting them keep the car. Man, this situation is bad, I feel for you.

 

[epic]

I'm always skeptical on the insurance industries motives.They take a track record for a vehicle,do their actuary work and walla their price for future policies.I do believe there are few leaf claims,so far.This one can balloon the tables.They will profit from this presumed blunder 10 times over.On increased future rates.
The sinareo just makes NO sence.As Texans say "The dog don't hunt".I believe there is more to the story.

 

[donald]

That's not how it works in the US. Whether or not a car is totaled has nothing to do with who is at fault. It's purely a financial decision: are the repairs going to cost more than the car is really worth?

hmmm.... Well, whichever jurisdiction, it is a matter for the terms of the contract, not of any statute. The issue is that for the insurance company to 'write it off', then they have to own it. There has to be a clause that says the insurance company will take ownership of the vehicle after X event, and/or Y event, etc..

There may be a clause that says they will refuse to make a pay out, unless you hand over title, or it may say you agree they will take over the title in the event that the vehicle's repairs costs make it non-viable to repair. It has to say something like that in the small print because the insurance company cannot assume title of the car when it chooses, it has to be under contract and by agreement with the title holder.

In this case, if the OP hasn't requested the work themselves (i.e., if the work was requested by the ins co.) then in any normal contract law the OP has a right to recover their property, and the party who instructed the work is liable for it. The body shop will have a lien on the goods, but the OP can ask a Court for an order that they release the car, and after that it is a civil matter between the body shop and, presumably, the ins co that instructed the work, and the OP would no longer be a party to that dispute.

... and, in fact, this one sounds like it may well be a candidate court case as there will be a few thousand riding on it.

 

[RonDawg]

That's not how it works in the US. Whether or not a car is totaled has nothing to do with who is at fault. It's purely a financial decision: are the repairs going to cost more than the car is really worth?

hmmm.... Well, whichever jurisdiction, it is a matter for the terms of the contract, not of any statute. The issue is that for the insurance company to 'write it off', then they have to own it. There has to be a clause that says the insurance company will take ownership of the vehicle after X event, and/or Y event, etc..

There may be a clause that says they will refuse to make a pay out, unless you hand over title, or it may say you agree they will take over the title in the event that the vehicle's repairs costs make it non-viable to repair. It has to say something like that in the small print because the insurance company cannot assume title of the car when it chooses, it has to be under contract and by agreement with the title holder.

Correct but as I said earlier, when you file a claim with your insurer, you're agreeing to a bunch of things. One of them is that yes you will hand over title to the car in exchange for a fair market value payoff, should the vehicle be declared a write-off. Then again this car is a lease, so the OP never had title in the first place. But there is a clause in the lease contract that the car be returned in acceptable condition at lease end.

Yes you could not file a claim, but then you'd end up fixing the damage yourself (and for some minor at-fault accidents not involving another car, some people prefer to do that to prevent their premiums from rising) or just have a bunch of crunched metal sitting around your property.

 

[Nubo]

Maybe their reasoning is that after repairs reach a certain price, the future safety and reliability of the car is in question. While it may seem wasteful, maybe there is a liability issue?

 

[smkettner]

I know you might be losing some money but just the same I would let it go to them and get a new EV.

 

[schatzely]

Thank you all for responding! All of you gave us good pointers for things we should check out and scenarios that we may anticipate...

One thing that bugs me is that the certified shop had the estimate form the ins co for $15K and we called multiple times asking them for an estimate for repairs considering that out of the $15K only $2K were left for payment to the second shop and we warned them that exceeding this amount will likely need authorization from our ins co. So in my opinion they should have halted ordering parts and working on the car as soon as they reached over $2K and contacted us and the ins co. So the second body shop (LEAF-certified) did play unfair in my opinion, but this is just my opinion... So I can see it how the ins co may end up refusing to may them anything over the remaining $2K that were left in the estimate...

My speculation is that the ins co will not want to pay this car twice if they pay for repairs now and continue insuring it, because if we get in another accident they will potentially have to total it and would have paid twice for the car. So I think that if they total it now, repaired, they pay $46K (or less if they refuse to pay the second body-shop), the ins co will own the car now and auction it with a savage rebuilt title to cover some of their cost (I doubt they will get $22K for a LEAF with a salvage rebuilt title, but will still get more than if it was not repaired at all)...

Safety and reliability of the repaired car may play a role, but since it was repaired in a LEAF certified shop, I would guess that the liability will be with this shop and not the ins co... However, I don't know anything... I am just speculating...

We are supposed to hear back from the ins co this week with what will happen and whether we have any options. I am sure they will give us an option to cancel the claim and pay for the whole claim out of our pocket... which is not an option that we can accept... I'll update as we get more info...

Thank you again for the comments!

P.S.
We did keep the EVSE and we had it rebuilt for dual voltage. Ironically it arrived back in the mail the day after the accident so we never even got to use it since the rebuilt.

The leasing company (NMAC) said that they just want the check for $23.9K that is outstanding for the car and that usually the ins co will assume ownership. If we pay the balance we will own it... that's what we were told...

I don't remember being offered a gap insurance, because we would have taken it. We did gap insurance for all our vehicles we financed to own. This is the first lease we are doing and we've been through 7 cars (we still own 3 of them and the leaf is the only leased) the rest were traded or sold privately as our needs changed... and as I had mentioned we planed on refinancing the LEAF to own it.... The "Nissan self-gap-insures" does sound familiar though...

 

[schatzely]

I know you might be losing some money but just the same I would let it go to them and get a new EV.

I am not sure I understand what you mean by "let it go to them". Getting a new EV will depend on how much money we loose... unfortunately this is the way our current financial situation is... The monthly payment we can afford can only be reached after a down-payment, and losing our previous down-payment will mean we don't have money for a new one... In about a year our finances are expected to be better and maybe the market will be better prepared for these cars...

By the way after looking at our lease, the lease offer required $1000 down.

 

[RonDawg]

My speculation is that the ins co will not want to pay this car twice if they pay for repairs now and continue insuring it, because if we get in another accident they will potentially have to total it and would have paid twice for the car. So I think that if they total it now, repaired, they pay $46K (or less if they refuse to pay the second body-shop), the ins co will own the car now and auction it with a savage rebuilt title to cover some of their cost (I doubt they will get $22K for a LEAF with a salvage rebuilt title, but will still get more than if it was not repaired at all)...

That's a potential situation for any car that has been repaired. That's also a potential situation if they total the car, you go buy another one, and crash that too..

Safety and reliability of the repaired car may play a role, but since it was repaired in a LEAF certified shop, I would guess that the liability will be with this shop and not the ins co... However, I don't know anything... I am just speculating...

As long as the car used OEM replacement parts, and was repaired using acceptable industry practices, I don't think safety is an issue. Otherwise every car out there would get totaled once it was in an accident.

The leasing company (NMAC) said that they just want the check for $23.9K that is outstanding for the car and that usually the ins co will assume ownership. If we pay the balance we will own it... that's what we were told...

If you pay off the lease, I don't think it would matter. As I mentioned above, a total loss payout would require you and NMAC to relinquish ownership to the insurance company.

 

[schatzely]

The leasing company (NMAC) said that they just want the check for $23.9K that is outstanding for the car and that usually the ins co will assume ownership. If we pay the balance we will own it... that's what we were told...

If you pay off the lease, I don't think it would matter. As I mentioned above, a total loss payout would require you and NMAC to relinquish ownership to the insurance company.

I agree with everything you said! The last one, I guess I should clarify, that NMAC said they will transfer the title to us if we pay off the balance out of our own pocket and the insurance is not involved (the money we use to pay it does not come from the insurance). If the insurance is involved and the money comes from them, then the ins co will own it...

 

[RonDawg]

The leasing company (NMAC) said that they just want the check for $23.9K that is outstanding for the car and that usually the ins co will assume ownership. If we pay the balance we will own it... that's what we were told...

If you pay off the lease, I don't think it would matter. As I mentioned above, a total loss payout would require you and NMAC to relinquish ownership to the insurance company.

I agree with everything you said! The last one, I guess I should clarify, that NMAC said they will transfer the title to us if we pay off the balance out of our own pocket and the insurance is not involved (the money we use to pay it does not come from the insurance). If the insurance is involved and the money comes from them, then the ins co will own it...

Yeah but you'll be paying the body shops involved (or reimbursing your insurer) to the tune of $22k...plus the $24k payout...so you'll be the proud owner of a $46k Leaf.

If the insurer is footing the repair bill, you're largely at their mercy in terms of what will happen with the car, whether it be repaired or declared a total loss.