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/

(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 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

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

"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

I believe the best bet is no insurance.

Think about it. The insurance company exists to make money. They collect
more in premiums than they pay out. I believe that over the long run, you
will pay more in premiums than you will collect.

I stopped paying collision on my auto the day I got the title. I don't carry
hull insurance on my plane.

I Only insure against a loss that will change my lifestyle. (liability,
home, health)

"VideoGuy" gkasten at brick dot net wrote in message
...

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

Steve Foley wrote:

I believe the best bet is no insurance.

Think about it. The insurance company exists to make money. They collect
more in premiums than they pay out.

Not usually. They usually take the premiums and invest them in things like the stock
market. That's where they really make their money. That's also why premiums skyrocket
when the market goes down.

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

In article ,
Steve Foley wrote:

Think about it. The insurance company exists to make money. They collect
more in premiums than they pay out. I believe that over the long run, you
will pay more in premiums than you will collect.

The insurance company makes the most money by investing the premium
money. When the stock market is doing badly, insurance rates go up.
When the market is doing well, the rates go down.

"VideoGuy" gkasten at brick dot net wrote in
:

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

Next thing you know, insurance companies will start declaring a total loss
on life insurance policies if you sustain 60-70% of injuries. Then they can
make back the difference in salvage value...

How much does a cadaver minus a few fresh vital organs go for these days
anyway?