Do auto insurance companies receive money for taking older vehicles off the road?
Monday, January 26th, 2009 at
8:49 pm
Caraleigh asked:
Auto insurance companies seem to total older cars whether or not they are in great condition. This made me wonder whether auto insurance companies get paid by the state or whoever to total older cars.
Auto insurance companies seem to total older cars whether or not they are in great condition. This made me wonder whether auto insurance companies get paid by the state or whoever to total older cars.
Tagged with: Auto Insurance Companies • Insurance • Older Cars
Filed under: Auto Insurance
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No, they only get paid when you pay your insurance bill. Older vehicles are worth less and often the repairs are more than the worth of the car. It wouldn’t make much sense to do $1,000 worth of work to a $200 car after all.
There is no conspiracy here between the state and insurance companies.
No, they don’t get paid for getting older cars off the road. They total cars if the cost to repair them reaches or exceeds a certain threshold (usually 70%) of the actual market value of the vehicle. Most older vehicles are not worth the repair cost it’s going to take to get it back in a pre-accident condition so they total it.
This is ridiculous — older cars are totaled more often because they are worth less on the open market and NO — there is no secret state run operation that pays insurance companies to ‘get’ old cars off the road.
Damn.
No, they don’t.