“Why Couldn’t OUR Car Have Been Totalled?!?”
In the wake of our minivan getting totalled in a storm two weeks ago, besides concern for our safety (we weren’t in it) followed by sympathy, the next most common reaction we’ve gotten is . . . envy.
Yes, envy.
As in, “too bad a tree didn’t total our [ancient, falling apart] car.”
Fair Market Value vs. Replacement Cost
Unlike home insurance policies, which can include a rider covering the home’s full replacement cost, car insurance policies typically only insure the vehicle’s fair market value.
In other words: if a tree crushes your 14 year-old junker with 175,000 miles on it that’s worth $1,300 . . . your insurance company will cut you a check for $1,300.
Minus the deductible, that is.
