Stacey's Mazda RX-7, Insurance Settlement
This document last modified May 21, 2003.
Just after Stacey's first message to me, I gave her my
best guesses about what the car was worth. I figured between $3500 and $4000
US. (That was between $5600 and $6400 Canadian.) She ended up getting $9000
Canadian!
A number of issues worked in her favor to obtain such a
settlement. For one, the GSL-SE is an increasingly rare car. Among a
surprisingly large enthusiast market, this highest performance and trim level
of the original, "first generation" RX-7 is considered by many to
be the Holy Grail of rotary powered sports cars. It is the only version of the
original model to include fuel injection and the larger engine size that has
been used in all subsequent RX-7 models. The GSL-SE variant was only made
during the 1984 and 1985 model years, and only available in North
America. Approximately 15% of all RX-7s made in those years were
produced at the GSL-SE option level. That was only 15000 cars, and many of
these cars have been lost since 1985. I was able to pass along most of that
information to Stacey before she spoke with her insurance adjuster. I also
suggested that she search some of the internet resources and online newspaper
classifieds for examples of similar models being sold. And finally, Stacey also
obtained a statement from her mechanic about how well kept the car was:
Over those first few weeks after the theft recovery, Stacey
corresponded with Dave Randall, Jim Linihan and I. So
when her insurance company finally offered a settlement, she wrote to the three
of us:
"I am writing to all of you because something very strange has happened. I am in the
insurance business in British Columbia (BC) Canada
and I know the procedures. After meeting with the adjuster yesterday, showing
him the pictures of the car (before, of course), he could not believe it was
the same car. He told me that he believed it was joy riding kids that stole the
car and that, at this point, it was a write off. He told me it would go to the salvage yard
'for dismantle only.'
I know this means nothing to you guys, but in BC it means
that only car dealers and salvage yards can bid on the car to buy it, not the
original owners. In BC, you have to have a government dealer number or a
registered salvage number to be able to bid on an insurance company write off.
Today they asked if I would store the car. This is
completely unheard of! No insurance company releases a write off car before or
after the settlement. But today, I have possession of the car with no time
limit. Yes, I have contacts at the insurance company, but do I know who would
have arranged this? No!
When the car was towed -- not to my house, at my
request -- my mom went and started to clean the paint off the dashboard.
As it turns out, it's washable! I haven't seen it, but she says it comes
right off!
Tomorrow, I'm having my mechanic come to check the car out.
By the way, the insurance company had offered $9,000
Canadian, and I have the car! Should I accept? Your opinions greatly
appreciated!!!
Stacey"
Dave Randall replied first:
"If you feel that money is
sufficient to cover the cost of replacement items (or a decent paint job, if
nothing else), then it sounds like you'll do OK by taking the money and keeping
the car. Oddly enough, you will find that you appreciate it just a little bit
more as time goes on after such an experience."
Then Jim Linihan chimed in:
"Hi Stacey. It sounds like things are looking up a little more, and you
are in better spirits.
I don't recall if I had sent Dave the pictures or not, but even
if I missed him, Jim Rothe had them all over the 1st generation RX-7 mailing
list. So you had some global news coverage.
Many have lamented those pictures.
About Mr. Doran's car -- the guy who bought the
'85 GSL-SE for $10,000 -- do not include the air dam and spoiler in
your assessment of comparability. Usually, insurance companies won't. I'd throw
in the figures and provide Mr. Doran as a witness to testify, via a written
statement, as to the real world value of the car, as opposed to the almost nonexistent
'blue book' value. If you work for the company (or any insurance
company) you should know that they will raise the offer if they believe you
have cause enough to get more out of them through an arbitrator or court room.
The figures you produce from this misfortune should go a long way towards
replacing or repairing the car, whichever route turns out to be practical after
the mechanic looks into it.
The bottom line, in my opinion only, is that you should
accept the $9K Canadian insurance check for settlement only if you believe you can get the car back to where it was, or
you can find another that may take it's place for the
same price or less. Usually, once you cash that check, it will be settled, so
make sure you are happy with the amount before you settle. I know finding a
replacement for that amount is a pretty iffy proposition around here.
I don't know about you guys, Dave and Jim, but I'm beginning
to sweat bullets about this insurance thing. I need to find an agreed value
policy somewhere in the spring. Barring that, I don't think I'll be enjoying my
car for the next couple of years too much. Once it turns 20 years old, we can
get collectors insurance. Until then, if anything happened to the car, most of
the love and care I have invested would be lost. I paid more for the engine
swap parts and wheels alone than the insurance company would give me for the
whole car if it was tragically crushed by a bus, or disappeared.
Good luck on your car's rehabilitation, Stacey."
When I asked Stacey about buying back her salvaged car, she
fired this one off to me:
"BC Canada Insurance Claims 101
Sit down, student, and listen up! :)
There are three ways that adjusters handle claims:
1) Damage is minimal and repairable. Client pays deductible
to body shop, insurance company pays the rest to the
body shop.
2) Salvage. The car is repairable but is a constructive
total loss, This means the cost to repair outweighs
the actual cash value of the vehicle. They pay the client for the loss, and the
insurance company now has ownership of the vehicle and they either sell the car
to a body shop for them to repair or part it out. At this level, only licensed body shops can bid on the
wreck. The average backyard mechanic cannot bid. You have to have either a
government car dealer number or a salvage dealer number to be able to bid on
the car. It is at this point the serial number is removed by the insurance
company.
3) Dismantle only. The car will never see the road in one
piece again. At this stage, the car is up for bid, available only to government
licensed salvage yards to be parted out.
Originally, my car was slated for dismantle. I managed to
convince them to call it salvage. Yes, the serial number plate is gone, but
that's no big deal for me. All I have to do is fix the cosmetic problems and
have the suspension, transmission & brakes looked at. I already know the
engine and electrical system are fine. Once I have the car inspected and apply
for a British Columbia assigned VIN, I'm on the road again.
The car will always have the history of being rebuilt status
and a new serial number, but I'll have the pictures and the proof that the
interior and hopefully the paint are original."
Once Stacey had an offer of settlement from her insurance
company, I responded to her:
"Actually, their price is about right. Remember the
first pricing estimates that I sent you? They were in the neighborhood of $2500
to $3500 US, or maybe about $4000 to $6000 Canadian. That was before I realized
how low the mileage was, how well the car was cared for, ownership history,
etc. All things considered, they're offering you just a few hundred dollars
more than the car is -- well... was -- probably truly worth. But as long as they're working with you regarding the title, that's
cool."
On November 28, just over one month after the initial theft,
Stacey wrote to me:
"It's done. The insurance company was more than fair.
I received $9,028.80 payment. The option to buy back the car was set at
$457.00. I accepted."
Insurance Check Statement:
Initially, my reaction to Stacey's settlement was that
she did very well. For years, I used to tell the internet community that
"these cars are like grains of sand; there were tens of thousands of them
produced, and they will never be valued the same way that any 'collector
car' would." What's occurring to me now is that they are
finally gaining in value, due to their increasing rarity, their fun-to-drive
factor, and the collective enthusiasm of their owners. Perhaps it's time to start valuing them higher than the used
car market does.
