Here's Everything that's Broken on My 1966 Imperial Crown Convertible and Why it's INDESTRUCTIBLE!
I'm watching this video and I'm listening to Hoovie and the Wizard talk about crumple zones and how Chrysler Imperials have been banned from demolition derbies and i got a clue about why cars might sometimes be declared a total loss by insurance companies even though the damage appears to be minor.
Newer cars have crumple zones that are supposed to absorb the impact of a crash and so protect the cabin and the occupants.
A while back my wife's SUV got rear ended. From the outside, the damage to the rear bumper appeared to be minimal, just a couple of scratches. However, underneath the plastic bumper there was steel bumper that had gotten crushed and needed to be replaced.
So I'm thinking that if a wreck has caused any deformation to the crumple zone, the insurance company is liable to declare the car a total loss even if the damage could be repaired. Crumple zones are disposable. If it gets crumpled once, that's it. Even if it is straightened out so that it looks like new, it will not have the same strength as it did before.
Put all this in my mental blender and I came up with this theory. The insurance company does not want to be on the hook if the car is in another wreck and someone gets hurt because someone is liable to claim that the repairs that the insurance company authorized weren't adequate to restore the car to like-new condition. And since personal injury claims are easily ten times as large as claims for damage to the car, the insurance company totals the car and so frees themselves from any future obligation.
Which means two of our cars could be more dangerous if they are ever involved in a wreck. Since the odds of being in a serious wreck are low, I am willing to take that chance.
The insurance companies use their claim payouts to justify to regulators & customers the need for higher rates.
ReplyDeleteAny bit of higher rate hikes go into the float, this is where the insurance companies make their big money.
"Berkshire's insurance operations have roughly $115 billion of float as of the latest available data."
Free money for them to invest as they like (Berkshire invests in equities) till pesky claims show up.
I wondered why insurers were so eager to settle by totaling a fixable car, the claims are the cost of business to ensure they have a big float to play with.