The life of a salvage vehicle

Back at the beginning of my insurance career, I was a total loss claims adjuster. Outside adjusters would give me the files on vehicles they had determined were total losses, and I would call the insureds to settle the claim. Once settled, the salvage had to be disposed of, and thus began my career in used car sales. Yes, you read that correctly, used car sales.

The damaged vehicles went to the salvage yard that sold them for the company once we had obtained the salvage titles. We would send the titles we received from the insured to the department of motor vehicles and they would issue a salvage title in the name of the company, then we would send the salvage title to the salvage yard so they could sell the vehicle. That was the easy part. However, not all claims involved vehicles that had been in an accident; many vehicles were recovered thefts.

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Settling the claims

Claims on stolen vehicles were not settled immediately, since stolen vehicles are often recovered within the first 30 days. Therefore, the company would wait in hopes the car would be found and could be repaired and returned to the owner. If the car was found before the 30 days were up, and the vehicle was damaged but repairable, it was returned to the insured. If the car was found and was a total loss due to the damage, it went to the salvage yard.

If the vehicle was recovered after the 30 days, it still went to the salvage yard if it was significantly damaged. If the vehicle was in good condition after the 30 days were up and the insured had been paid, the vehicle belonged to the company. That was where I came into the claim.

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The vehicles were brought to the main office where I worked, and put on the parking lot in front of the drive-in claims office. When I had accumulated what I considered enough vehicles, or a few vehicles had been on the lot for an extended period, it was time for a sale. I would have a local police officer come out and sign off on the salvage title that the VIN matched and the vehicle was in usable condition.

The condition of the vehicle varied depending not only on the thief and if he had done any damage, but the former owner as well. Sometimes the thieves were neater than the original owner had been. There was the station wagon where the owner had at least one, if not more, large yellow dogs that went everywhere with the owner, as evidenced by the amount of dog hair in the vehicle. Other vehicles had several of the tree-shaped car air fresheners hanging from the rearview mirror, which left the inside of the vehicle overpowered with their scent.

Some vehicles were like new, while others were well used and worn. The newer cars always attracted attention since they were generally in good condition, and often used for joy rides. It was a great way for a buyer to get a good vehicle at an excellent price.

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Selling the salvage

After the salvage titles were prepared, I would post the list of available vehicles internally, and leave a few lists at the front desk. It was amazing how there was a group of people in the community who used to regularly watch the “used car lot” for vehicles they might want to purchase. The vehicles were sold by closed bids. We would look at the value of the vehicle, and sell it to the highest bidder as long as the company got a percentage of the value based on condition.

However, like any good car lot, people wanted to look at and at least start the vehicles if the ignition was intact. When someone wanted to look at a vehicle, he would call me internally or go to the front desk and ask for me. I would come out with an envelope full of keys and walk the person out to the parking lot of vehicles so he could look at what was available. I’d show him the vehicles, let him start the car, and point out all the features.

Fortunately, the receptionist and I got along well, and if someone showed up on a rainy, stormy day, she would run them off and tell them to come another day. I wouldn’t even know until after the fact. Always be nice to your receptionist.

The purchasers were interesting as well; many newly licensed teens of employees started out in one of those used cars. Some parents preferred to buy the teen a larger vehicle for safety, and others preferred smaller cars so the teen could carry fewer passengers. Some purchasers were somewhat regular buyers who had bought from us before and wanted a different or newer vehicle, or had yet another son or daughter reach driving age and they needed a vehicle for that teenager.

Of course having the vehicles on the lot presented its own hazards for the company. While the building had security cameras and staff who patrolled the lot, there was the bold thief or thieves who stole the wheels and seats from a Ford Mustang parked on the lot. How that happened was always a mystery and somewhat embarrassing.

Once the vehicle was sold, the buyer would bring the funds to the office and we would handle the paperwork, and send the buyer and vehicle merrily on their way.  I am sure the salvage process has changed since then, but it does provide a look at the old days of recovered stolen vehicles, at least from one perspective.

Christine G. Barlow, CPCU, (cbarlow@alm.com) is an editor with FC&S Online, the authority on insurance coverage interpretation and analysis for the P&C industry. It is the resource agents, brokers, risk managers, underwriters, and adjusters rely on to research commercial and personal lines coverage issues.