Insurance payout and 'totaling'

You insure your a/c . You have an accident and the insurance company
says that if the estimate is between 60-70% of the insured value, they
declare it totaled.
Why is the cut-off point 30-40% lower than the insured value?

In article ,
Michael Horowitz wrote:
You insure your a/c . You have an accident and the insurance company
says that if the estimate is between 60-70% of the insured value, they
declare it totaled.
Why is the cut-off point 30-40% lower than the insured value?

Because when they total the aircraft they get it and sell it for salvage.
Their total cost is $policy_value-$salvage. As soon as $repair exceeds
that, it's cheaper to total. Consider how much of an aircraft's value is
in the engine, avionics, etc and how much spare parts go for and you can
see that in a lot of accidents there will be a significant salvage value.

--
Ben Jackson

http://www.ben.com/

"Michael Horowitz" wrote in message
...
You insure your a/c . You have an accident and the insurance company
says that if the estimate is between 60-70% of the insured value, they
declare it totaled.
Why is the cut-off point 30-40% lower than the insured value?


Because you can't polish a turd.

"Newps" wrote:

Because you can't polish a turd.


You lost me on that one - Mike

(Ben Jackson) wrote:

In article ,
Michael Horowitz wrote:
You insure your a/c . You have an accident and the insurance company
says that if the estimate is between 60-70% of the insured value, they
declare it totaled.
Why is the cut-off point 30-40% lower than the insured value?

Because when they total the aircraft they get it and sell it for salvage.
Their total cost is $policy_value-$salvage. As soon as $repair exceeds
that, it's cheaper to total. Consider how much of an aircraft's value is
in the engine, avionics, etc and how much spare parts go for and you can
see that in a lot of accidents there will be a significant salvage value.


Oh, it's a way of cutting their losses. When they pay out for a less
than totaled a/c, they loose 100%, but if they total the a/c, they at
least get 30-40% back. Thanks

Michael Horowitz wrote:

You insure your a/c . You have an accident and the insurance company
says that if the estimate is between 60-70% of the insured value, they
declare it totaled.
Why is the cut-off point 30-40% lower than the insured value?

In addition to the salvage value Ben mentions, they typically assume that additional
problems will be found during the repair process, and that the repairs will
consequently cost more than the original estimate.

George Patterson
None of us is as dumb as all of us.

"Michael Horowitz" wrote in message
Oh, it's a way of cutting their losses. When they pay out for a less
than totaled a/c, they loose 100%, but if they total the a/c, they at
least get 30-40% back. Thanks

Think you may find they get more than that. It's pretty much the same with
the auto insurance industry. I personally know of situations where the
insurance company totaled the car; paid the insured (MINUS the deductible,
of course) and parted the car out, and actually retreived close to 85% of
the payout. The insured is ALWAYS the one who takes the big hit, either by
the insurance company totaling "short" or by big premium increases, or both.
If you think you can win with insurance, you're living in a fools paradox.

Best bet is whole life insurance, bought early in life. Of course, the only
way to collect is... sigh

GWK

"Newps" writes:

Because you can't polish a turd.

Nor can you polish a stupid Usenet reply.

"Ricky Robbins" wrote in message
...
On Fri, 28 May 2004 18:13:24 -0500, "VideoGuy" gkasten at brick dot
net wrote:

Best bet is whole life insurance, bought early in life. Of course, the
only
way to collect is... sigh

Whole life? I don't think so.

Ricky

Well.... Maybe I should have just said "life" insurance. Better?

GWK

On Fri, 28 May 2004 20:58:24 GMT, "G.R. Patterson III"
wrote:



Michael Horowitz wrote:

You insure your a/c . You have an accident and the insurance company
says that if the estimate is between 60-70% of the insured value, they
declare it totaled.
Why is the cut-off point 30-40% lower than the insured value?

In addition to the salvage value Ben mentions, they typically assume that additional
problems will be found during the repair process, and that the repairs will
consequently cost more than the original estimate.

George Patterson
None of us is as dumb as all of us.

There are also "overhead" costs associated with recovering the
aircraft (insurance usually picks up the bill), storage fees until
disposition is determined and until the NTSB does their thing, etc.

So when you prang your bird (and you're insured), money
starts getting paid (again, usually by the insurance company)
from the get-go.

Bela P. Havasreti