When I say “Total Recall”, I’m not talking about a movie remake that comes out August 3rd. I’m talking about what happens when your insurance company wants to total your car instead of paying for repairs, but then you recall (see what I did there?) improvements you have made to your vehicle.
Your car may be worth more than you think, thanks to something called “Betterment” or “Diminished Value”. Gather ’round whilst I regale you with a personal experience that got me $4,000.
13 years ago, I had a fender-bender. When I asked the other dude for his insurance, he said, “I lost it yesterday.” Since that was also the day I was born, I believed him. Uninsured motorists are soooo clever.
Happily, there wasn’t that much damage to my 1986 maroon Honda Accord DX. Unhappily, the insurance adjuster said my car was totaled. I asked, “How do you figure?” He went Socrates on me and answered my question with a question. Our conversation ping-ponged as if Aaron Sorkin had written it himself.
“How old is the car?” 13 years.
“How many miles?” 328,536.
My hooptie had sentimental value, but did it have much actual value? I’d put about $4,000 into it the previous year. Was I like one of those people who spend thousands of dollars on dialysis for their 27 year old Siamese kitty, Mr. Tibbers? Maybe.
Admittedly, I may not have seen things as they really were. This was my first car ever. I bought it new, right out of college. It was my chariot as I crisscrossed the country on the stand-up club circuit. It took me to work in 297 cities, over 42 states – including all the places named in The Steve Miller Band’s “Rock ‘n Me” and Sade’s “Smooth Operator” songs. On the road, it was the closest thing to a home.
It Gets Better -ment
I still wasn’t convinced of my car’s fate, so I called my Honda mechanic back in Ohio. She agreed that it was totaled, but Tina had great news. Because I had put in about $4,000 worth of repairs over the previous year, I could get that back from the insurance company, minus my deductible. My car was like George Bailey – worth more dead than alive!
My buddy who worked for his family’s car dealership said that he knew it had sentimental value to me, but if I can get $4,000 – take it! I pulled the plug and walked away with a check.
Tina used the term “Betterment”. She said I had made my car better, and therefore was entitled to compensation if my insurance company wanted to total it. Sweeeeeet! Nowadays, some folks call it “Diminished Value”. Laws about this differ from state to state. If your car gets totaled, talk to your insurance agent about Betterment or Diminished Value.
Somewhere around 300,000 miles, my car started having trouble getting into 2nd gear. Instead of repairing the transmission, I opted to get a two year old transmission from the K. Watanabe Corp. They import slightly used engines and transmissions from Japan. For the same price as simply fixing the packing in one gear, I got an almost new transmission.