TMC is an independent, primarily volunteer organization that relies on ad revenue to cover its operating costs. Please consider whitelisting TMC on your ad blocker or making a Paypal contribution here: paypal.me/SupportTMC

Model S Total Loss Valuation

Discussion in 'Model S' started by nakedsushi, Sep 12, 2014.

  1. nakedsushi

    nakedsushi Member

    Joined:
    Mar 31, 2014
    Messages:
    71
    Location:
    United States
    My Model S85 was in an accident. I don't want to get into the details of the accident here -- I'll save that for another post, but my insurance (only my car was involved in the collision), State Farm, has declared it a total loss. It was pretty obvious after the accident, even without the claim adjuster there, that it would be totaled. They've given me a value for the total loss, but it seems on the low side to me. If I were to replace the totaled car with another Model S with the same specs, I would still be eating at least $15k, not including registration or sales tax. I was under the impression that having a totaled car meant insurance would pay you out the amount it would take for you to buy a comparable car.

    The car prior to the accident was declared in very, very good condition. It was only 4 months old, with 3000 miles on it, no prior dings or scrapes or accidents. It was a dolphin grey (noooooo!) S85 with tech package and parking sensors.

    My questions:

    For users who have gone through the insurance total loss valuation process, does 73k seem like a reasonable amount?

    If the amount seems low, what facts or evidence can I use to contest it?
     
  2. Todd Burch

    Todd Burch Electron Pilot

    Joined:
    Nov 3, 2009
    Messages:
    4,734
    Location:
    Smithfield, VA
    Sorry to hear of your accident, glad you are ok.

    Insurance companies do not typically give you replacement value unless that is a declared feature on your policy. They typically give you actual cash value (ie depreciated). It hurts. I know. I went through it.

    My dolphin gray S85 was a total loss as well. It was purchased for $82,500 new (after the federal tax credit), decently optioned, was 18 months old, in excellent condition, and had 31,500 miles at the time of the accident. (Also had 4 tires with less than 500 miles on them). (Keep in mind this was bought before Tesla jacked up the prices on the Model S--at the time of my accident the equivalent car would have cost me over $10k more). Initial offer from the insurance company was around $62k. I bitched and got it up to $70k. Keep in mind that you have to consider the after-tax-credit value of the car....if you paid $90k out of pocket but the car was really $97,500 due to the tax credit, the value is based off the $90k. (Same goes for used cars, since second-hand buyers don't get the tax credit).

    I felt like I was getting shafted too, but depending on your options, the offer is not too far off. (Expensive cars are clearly not good investments). I even emailed Tesla, and my message was sent to their financial valuation team. Even Tesla said I was getting an OK offer.

    In my case, I had a very early car which was bought BEFORE pricing for an equivalent car went up $10k-$15k, so even getting back to where I was took a serious amount of money. A painful experience, though I was grateful nobody was hurt.

    Some policies have options where you can pay extra for new car replacement. You may want to consider it.
     
  3. yobigd20

    yobigd20 Well-Known Member

    Joined:
    Oct 28, 2012
    Messages:
    5,793
    Location:
    Skaneateles, NY
    while I've never gone through this myself and hopefully I never will, no I wouldn't accept that number if it doesn't make you whole again with an equivalent car. from what I remember reading sometimes it takes weeks or months of arguing with your insurance over this. state farm is known to be one of the worst to deal with. you'll probably have to go to arbitration etc to get more money out of them: State Farm Dropped My Insurance - Page 5

    - - - Updated - - -

    more state farm complaints from other tesla owners:

    in this one, state farm refused to pay the full repair amount, and stuck the owner with paying $7k out of pocket for the repairs which forced the owner to sue them for that last $7k: http://www.teslamotorsclub.com/showthread.php/8877-Model-S-Insurance?p=717850&viewfull=1#post717850

    http://www.teslamotorsclub.com/showthread.php/8877-Model-S-Insurance?p=438408&viewfull=1#post438408
     
  4. nakedsushi

    nakedsushi Member

    Joined:
    Mar 31, 2014
    Messages:
    71
    Location:
    United States
    Thanks for these helpful replies. Since this is the first time I've had to deal with an accident with my insurance (lucky me -- go big or go home). I mainly want to make sure I'm getting paid a 'fair' valuation and am not getting shafted. Good point on contacting Tesla's own financial valuation team about it. How did you end up getting to them? Did you just email support@ ?

    I know there are lots of complaints about State Farm from other customers, but I have to say that prior to this, I've had nothing but good experiences with them. I think it helps that we have a really good agent.
     
  5. iadbound

    iadbound Member

    Joined:
    Apr 24, 2014
    Messages:
    637
    Location:
    No. VA
    In shopping for insurance, I have had extensive discussions with my insurance broker. As Todd and my broker have both explained, the insurance company will usually pay out the depreciated value of the vehicle regardless of how old the car is at the time. Thus, if the car had been totaled on the second you owned it, the insurance company still would have accounted for a significant amount of depreciation under the old school assumption that a car is immediately devalued when driven "off the lot."

    As to the valuation that the insurance company has given you, that is a different matter. It may very well be that the depreciated value was greater than the $73k that the insurance company offered, but I have no idea on that front.

    Some insurance companies offer so-called replacement value policies which generally provide sufficient funds to buy a new comparable model for a certain period of time after the car has been purchased. I'm personally looking at such a policy because I worry about what a total loss would mean. In part, it can help ensure you can get a new Tesla, and it should help cushion any potential upside financing issues, which is obviously a separate issue. I've even looked at agreed value policies, but I've concluded that the new car replacement option is sufficient for now.
     
  6. Brightonuk

    Brightonuk Member

    Joined:
    Mar 16, 2014
    Messages:
    377
    Location:
    Plantation
    I have a question related to the above post
    I drive my S with a bike hitch and most days will have my Cevelo R5 on the back, the bike if you purchased it new with the setup I have would be around $10k, Frame, Rims, Gear set etc would the insurance cover the bike if it was totaled (that is I got rear ended)
     
  7. scott2613

    scott2613 Member

    Joined:
    Jun 3, 2013
    Messages:
    116
    Location:
    Wisconsin
    Speaking from many years of experience with insurance adjusters, I'd do some negotiation. They are close if you take the $7,500.00 tax credit into consideration. They are bound to make you "whole" again. The meaning of that is just what it says. They have to replace your property with something comparable, no more no less. That means all extra costs associated with the loss, title, registration, sales tax etc. including replacing lost or damaged personal items inside up to a certain amount stated in the policy.
    State Farm, as a company is very reputable on balance. Often, it's their adjusters and inside people who can vary in their idea of what's fair. They have many different backgrunds and experience levels so do your best to be reasonable and cordial with them and don't be afraid to speak to someone above them if you feel things aren't going well.
     
  8. Canuck

    Canuck Active Member

    Joined:
    Nov 30, 2013
    Messages:
    3,959
    Location:
    South Surrey, BC
    Not true. Your policy will specify the basis of payment. It's usually on an "actual cash value" basis but what does that mean? The best definition is what your car would have sold for on the open market just prior to the loss. But it's also usually a defined term in the policy of insurance. For instance, this is from one large insurer's policy wording:

    ________________________________________
    "Actual Cash Value" will take into consideration such things as the cost of replacement less any depreciation.
    In determining depreciation "we" will consider such things as:
    (1) the condition of the property;
    (2) the resale value of the property;
    (3) the normal life expectancy of the property; and
    (4) the use of the property;
    immediately before the loss or damage.
    ________________________________________

    Taxes are not payable on actual cash value settlements -- only on replacement costs payments if you have replacement cost coverage -- and only once the property is actually replaced and taxes are paid. Title, registration, etc. are not payable.

    It's best to read your policy terms and then obtain evidence to support your claim. The best way to do that is to get Car Trader, Craigs List, Ebay, etc. ads comparable to your car and see what the asking price is. Now, Courts know that cars don't always sell for asking price, so Ebay is good because you can bookmark bid items and follow through to the sale. Don't take the insurers first offer, unless it is the actual price comparable vehicles are selling for. Go to them armed with the policy wording and print outs of the sale prices for comparable vehicles. That is what you are entitled to and tell them they owe you "A duty of good faith." Use those exact words because a breach of that duty often entitles an insured to punitive damages.
     
  9. TexasEV

    TexasEV Active Member

    Joined:
    Jun 5, 2013
    Messages:
    3,787
    Location:
    Austin, TX
    Tesla sells the loaners, which are always just a few months old, for a discount of 1% per month and 1% per thousand miles. So if they were selling a 4 month old car with 3000 miles, that's 7% off the new price. You can use that's calculation to see if you're getting a fair price or not.
     
  10. yobigd20

    yobigd20 Well-Known Member

    Joined:
    Oct 28, 2012
    Messages:
    5,793
    Location:
    Skaneateles, NY
    My insurance has a line on it for "aftermarket items" specifically for this case. So I have additional insurance to cover my XPEL wrap and tint and rims etc. it's like a few dollars extra every 6 months.
     
  11. Canuck

    Canuck Active Member

    Joined:
    Nov 30, 2013
    Messages:
    3,959
    Location:
    South Surrey, BC
    Also, if you don't have coverage through your vehicle insurance, your homeowner's insurance will likely cover your bike, although most have a limit of around $1k for bikes unless you separately schedule them. If you have a $500 deductible, it's usually not worth the claim given that it may affect your premium come renewal.
     
  12. Todd Burch

    Todd Burch Electron Pilot

    Joined:
    Nov 3, 2009
    Messages:
    4,734
    Location:
    Smithfield, VA
    Same here. Almost 20 years of accident and claims-free driving--then one day I decide to go and total the big one. Go figure...

    I contacted ownership and ownership forwarded it on to their valuation team.

    Tesla obviously has a stake in ensuring resale value of the car, so when I contacted them they had just started a group to research and help ensure maximum resale value.

    By the way, if you can find some Craigslist/E-Bay/TMC sales of Model S's similar to yours, you can use that as evidence.

    Problem with me is that there were so few cars being listed for sale when this happened that I couldn't find a decently comparable car. Moreover, all I saw were asking prices, not sale prices.

    Also tried the loaner route, but Tesla only had a few on-hand: none of which was close to what I wanted. Thus a new order---and I'm still waiting to drive an S again.
     
  13. yobigd20

    yobigd20 Well-Known Member

    Joined:
    Oct 28, 2012
    Messages:
    5,793
    Location:
    Skaneateles, NY
    There was an eBay listing I came across not too long ago that was a P85 with 48.7k miles and the listing said it sold for $85k. (Like a few weeks or a month ago). That seems pretty high given the mileage. Not that I would argue, bc I have 56k miles on my P85 so I'd hope that mine is still worth a decent amount and that this proves that Tesla's $1 off per mile driven is not the calculation that should be used to determine value.
     
  14. DRoss

    DRoss Banned

    Joined:
    Sep 14, 2014
    Messages:
    6
    FYI.. I checked with Cincinnati Insurance how has handled our P&C coverages since 1980.. They are great and have very high ratings. They said they would cover replacement cost for a period and a liberal "total" amount after that. We have never had anything "totaled" or a major claim all these years. We have had house hail damage and comprehensive claims for truck tire retreads coming off and hitting the car. They were amazing. No driving around for bids, or coming to them for their estimates... Unlike some of the others , they use OEM parts. FYI of folks are looking.
     
  15. Canuck

    Canuck Active Member

    Joined:
    Nov 30, 2013
    Messages:
    3,959
    Location:
    South Surrey, BC
    You should never rely on what you are told by an insurer or broker without being advised of the exact policy terms they are referring to. I have seen many time when insurers and brokers have provided incorrect information, mostly done innocently due to poor knowledge of actual policy conditions, but sometimes done intentionally to sell policies.

    If you are told "they would cover replacement cost for a period" find out what that period of time is, as stated in the policy, and make sure the exact words "replacement cost" are contained in the policy. And if you are told they will pay "a liberal "total" amount after that" ask them where in the policy this is stated and read it for yourself. If your broker won't do that, find a different broker. If something should go wrong, and you car is totalled, what your broker told you is often meaningless because of the "Parol evidence rule" that often prevents the court from even hearing what you were "told" since the contract governs the claim -- not what you were told. So, being told things really often means nothing at law. You are signing agreeing to contractual terms regardless of what you are told:
    Parol evidence rule - Wikipedia, the free encyclopedia
     
  16. DRoss

    DRoss Banned

    Joined:
    Sep 14, 2014
    Messages:
    6
    Good point. I asked for a email or paper copy of the policy for Tesla. Expect to get it Monday. Thanks.
     
  17. taurusking

    taurusking Member

    Joined:
    Jul 12, 2014
    Messages:
    876
    Location:
    East Texas
    Not necessarily true..there are insurance companies that will pay on agreed value rather than cash value. I have Geico and they offer only cash value - depreciation if car is totaled (Hopefully it never happens). I am still researching on the agreed value of the car and as Canuck says cannot trust the broker until policy clearly states so...who knows the fine print other than insurance company?

    I called couple of insurance agents and one of them do offer "premium new car replacement pkg" ...which includes GAP + Glass coverage as well...but still investigating
     
  18. DEinspanjer

    DEinspanjer Member

    Joined:
    Apr 1, 2013
    Messages:
    189
    Location:
    Salem, NH
    Oh geeze.. just reading this thread and the other State Farm ones is leading me to believe it will be a long time before I am able to own another Model S...
     
  19. GBK

    GBK Member

    Joined:
    May 21, 2014
    Messages:
    7
    Location:
    Newport News, va
    I totaled my 2012 P85 vin 2311 4/2014... I got rear ended by a Dodge Ram going 50 mph, while I was stopped in traffic on the interstate. I argued with insurance that my Model S was was worth at least as much as a similarly equipped 2014. I won. They had no way to assess an aftermarket value.. There were too few 2012's for sale.
    currently driving a grey P85 vin 45xxx
     
  20. nakedsushi

    nakedsushi Member

    Joined:
    Mar 31, 2014
    Messages:
    71
    Location:
    United States
    I talked some more to the claims department. They estimated my S's value based on a third party company that does estimates. This third party took the sales price of 2 "similar" Model S's in the area and adjusted down based on my mileage and specs.

    I say similar in quotes because they're similar in that they're all Model S's, but mine is a standard S85 and the other two were P85's, had different options and milages. I noticed that they took some value off my estimate for not having options that I _did_ have on my car, so I sent them proof of the options, so now they're in the process of revising it. We'll see.

    I do think some of it has to do with how new the S's are in the market. My claims adjuster said this was the first Tesla she had to handle and admitted not being too familiar with it.
     

Share This Page