Insurance Buy Backs

What is an insurance buy back? When a vehicle has been poorly repaired in the course of an insurance claim and where the cost to re-repair those deficiencies are not economically feasible, the insurance company will buy the vehicle (back) from the consumer.

This is not as rare a situation as you might think. As a matter of fact, Copart, a company that auctions insurance salvage actually lists “buy backs” as a category of salvage.

Problem? Problem 1, in as much as these deficiencies tend to be safety related in order to be so cost ineffective to total a vehicle. More disconcerting is the fact that these vehicles are normally, complete, running vehicles that most people would not be able to determine were unsafe.

Problem 2, because they are complete and running there is little if any chance that those inequities will be corrected before they are returned to the road.

Furthermore some insurance companies choose to buy these vehicles back below the total loss threshold and will offer them with clean titles. Even when auctioned with a Salvage Title, some will be moved from state to state to clean up that title.

Hopefully these vehicles will be captured in the National Motor Vehicle Title Information Service (NMVTIS) that has been the subject of a previous blog (November 20, 2008) and will be again in the near future.

So the problem is that once again we have consumers being subjected to the undisclosed purchase of previously damaged and possibly unsafe vehicles. Additionally, even if we aren’t the purchaser, these vehicles are on the road and possibly heading toward us.

Oh and by the way, have you heard that Copart is opening up those salvage auctions to the general public? That’s right, let people that do not understand what the issue might be will be allowed to bid on a vehicle that looks okay to an untrained eye. You don’t suppose that would drive the price of salvage up do you? "Enron ethics" hard at work once again.

The solution is that previously poorly repaired vehicles need to be removed from our roads if they cannot be re-repaired economically and are purchased by insurance companies.