Auto Insurance Forum

I bought a used Ford Explorer three months ago for $13,600, including tax, tags, and title. Recently I was in an accident that was the other driver's fault. His insurance company totaled my SUV, but they are telling me that its fair market value is far less than the numbers I've come up with in my research.

In addition, the insurance company says that by law, it is not responsible for auctioning my salvaged vehicle. Instead, they want to subtract almost $3,000 from my settlement check for the amount they would have gotten in the auction. Now I am stuck with a wrecked SUV that I don't want — can they force me to take it back?

Also, they have not said a word about paying for my rental car or storage fees incurred while I waited for the repair estimate.

Krista, California

Yes, it's true that California law doesn't obligate insurers to auction your totaled vehicle when you make a third-party claim, according to Phil Gross of the California Department of Insurance (DOI). (A third-party claim is a claim you make on someone else's insurance policy. A first-party claim is one you make on your own policy, and in that case, the insurer would be contractually obligated to auction the vehicle after the insurer decides to total it.)

It's also true that the insurer can deduct the salvage value of that vehicle — that is, the amount they would have gotten at auction — from your settlement. However, Gross says, the insurer must provide you with detailed information regarding who will buy your vehicle for that amount of money. If you do not have this information, I suggest you ask for it. You also should ask for a copy of your claim file, which may give you insight into where the insurer turned to find a price for your salvaged SUV.

After you receive the salvage-value estimate, which will include the name of the potential buyer, you can arrange with that buyer to have him or her pick up your SUV and pay you for it. They should pay you the amount the insurance company deducted from your settlement check.

If you disagree with the insurance company regarding the market value of your vehicle, I suggest you present the insurer with your research and ask the company to show you where you can buy a similar Ford Explorer for the amount they offered. California law says the insurance company must consider all the evidence when it arrives at a value for a totaled vehicle.

Finally, the insurer should pick up the tab for your rental car and storage fees.

Fore more information, we have two stories about totaling wrecked vehicles: Questions surface on how insurance companies calculate a car's "total" value and Legal battle brewing over payments for totaled cars.

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Disclaimer: We are journalists, not financial planners or insurance brokers. Nothing we say should be interpreted as a recommendation to buy or sell any insurance product, or to provide other financial or legal advice.