TheSamba.com :: View topic - Is cheating on taxes affecting insurance?

Mon Jan 11, 2016 5:12 pm

One thing that scares me is the thought of someone hitting my poor Bug and their insurance saying "here's $500. We'll keep the car because it's 'totaled'". Of course there's agreed value insurance that will help fill in the void. But it doesn't seem right that it had to be that way.

One thing people mention is that if you can prove that someone sold a vehicle like yours in your area for so much, then yours should be worth so much too. The problem I see is that a lot of guys I know go write $1 on the title and register it as of they only paid $1 in order to avoid taxes. But doesn't that mean that if I were to try to prove I paid so much and so-and-so paid so much yet they were all registered as $1 cars, wouldn't that be incentive for the insurance company to say, "Here's your dollar!"?

Maybe I'm over thinking this.

Mon Jan 11, 2016 7:52 pm

the last bus I did for myself I paid 1200.00 for. it was a rolling shell with 1 piece of glass. it was what I reported to the state of Connecticut too. most DMV's have gotten wise to that crap. be careful, as they may go by book value if what you write down is "too good to be true"

it's now insured thru grundy, at an agreed value of over 60K. with several photos and a link to a build thread emailed to them, that is what they offered....and I could have gone up if I chose to.

seeing that would cover my monetary investment in that piece of shit and give me a few hundred to walk around with, I say let them hit me, because if I tried to sell it through the 'normal' channels, I would never get that from the vw world...

Mon Jan 11, 2016 8:31 pm

That's pretty good actually. I need to get that insurance for my Bug.

Actually for the record I paid $3000 for my Bug and I put $3000 on the title. In the above post I was speaking hypothetically.

Mon Jan 11, 2016 8:38 pm

People scamming the insurance companies with fake claims and also uninsured motorist is what is causing these problems. In Oklahoma it is reported that 2 out of 5 drivers DO NOT have insurance even though it is a law that you must have it.

If the Kelly Blue Book says your 42 year old car is only worth $500 then that is all the insurance companies are gonna pay.

Mon Jan 11, 2016 8:50 pm

vwracerdave wrote:
If the Kelly Blue Book says your 42 year old car is only worth $500 then that is all the insurance companies are gonna pay.

if you have a regular liability policy then yes, but if you have an agreed value policy not so much

Mon Jan 11, 2016 9:20 pm

Our DMV a couple years ago started using KBB or NADA classics to double check claims of $5 beetles. When I went to pay for my title on my '62 ragtop- I supplied them with an honest (as always) BOS for $5500. What I got was a morbidly obese midlife crisis divorcee telling me I'll probably get a call from the Id. State Tax Commission because my car actually books for $22,500! I went ballistic on her. I invited her and her taxman over to see a non-driving, faded gray beetle with a rusty hood, blah blah...

After reporting her to her supervisor- she was reprimanded and I got a refund check for $20 because she could not figure out that the day's date minus the date of sale (8 days previous) was less than 30 days.

So... I'm hunching CO will soon put an end to the $1 beetle sales- and they will continue be a non-issue for insurers. Insurance firms know classic cars better now- and want a piece of the classic car action. Just insure your car with a quality company. No decent company would ever go off your purchase price- they'll go off how it is, not how it was.

Mon Jan 11, 2016 9:29 pm

Where can a guy find the KB value? Last time I check KB.com only went back about 20 years.

Mon Jan 11, 2016 9:42 pm

vwracerdave wrote: People scamming the insurance companies with fake claims and also uninsured motorist is what is causing these problems. In Oklahoma it is reported that 2 out of 5 drivers DO NOT have insurance even though it is a law that you must have it.

If the Kelly Blue Book says your 42 year old car is only worth $500 then that is all the insurance companies are gonna pay.

I'm Honest John through and through. I would never want to scam an insurance company. But I also don't like giving them all my money either.

Do you have any suggestions what to tell the wife if I bought the car for $3000, put $6000 into it, the neighbor backs over it in his Hummer and then his insurance comes with a truck and a $500 check?

In that case I wouldn't expect them to pay me $9000. But if these cars are only worth $500, I guess we're all screwed.

Mon Jan 11, 2016 9:56 pm

I just found NADA (nothing in Spanish?!) it says that my car where I live is worth:

$2,159 originally, $3,650 low retail price, $7,400, average retail price and $17,800 for high retail price. I could live with the low price of I had to. The average retail price isn't that bad. If I could sell if for the high retail price I'd buy two more and do it again! :!:

Mon Jan 11, 2016 10:43 pm

vwracerdave wrote: People scamming the insurance companies with fake claims and also uninsured motorist is what is causing these problems. In Oklahoma it is reported that 2 out of 5 drivers DO NOT have insurance even though it is a law that you must have it.

If the Kelly Blue Book says your 42 year old car is only worth $500 then that is all the insurance companies are gonna pay.

In Arizona if you don't have insurance they cancel your registration.
I'm guessing not all states are smart enough to do that though.
If you get pulled over... not sure what happens, probably a big fine.
Or maybe it's police forfeiture time?

Mon Jan 11, 2016 10:43 pm

Juanito84 wrote: vwracerdave wrote: People scamming the insurance companies with fake claims and also uninsured motorist is what is causing these problems. In Oklahoma it is reported that 2 out of 5 drivers DO NOT have insurance even though it is a law that you must have it.

If the Kelly Blue Book says your 42 year old car is only worth $500 then that is all the insurance companies are gonna pay.

I'm Honest John through and through. I would never want to scam an insurance company. But I also don't like giving them all my money either.

Do you have any suggestions what to tell the wife if I bought the car for $3000, put $6000 into it, the neighbor backs over it in his Hummer and then his insurance comes with a truck and a $500 check?

In that case I wouldn't expect them to pay me $9000. But if these cars are only worth $500, I guess we're all screwed.

Keep your receipts to prove what you have into it too.

Mon Jan 11, 2016 11:12 pm

EverettB wrote: Keep your receipts to prove what you have into it too.

Will do! And thank you!

Tue Jan 12, 2016 12:28 am

What makes you think the DMV reports to your private insurance co what you paid for the car?

EverettB wrote: In Arizona if you don't have insurance they cancel your registration.
I'm guessing not all states are smart enough to do that though.
I'm surprised that this problem has been going on for decades when a solution exists. Where I live they solved this problem over 40 years ago. We can't buy insurance without registration, and we can't buy registration without insurance. We buy them at the same instance.

Tue Jan 12, 2016 12:34 am

Bruce wrote: What makes you think the DMV reports to your private insurance co what you paid for the car?

Just a guess. Where do insurance companies get their numbers of what your car's worth? Apparently from Kelly Blue Book. But where does Kelly Blue Book get its numbers? Would it be the DMV? I'm just asking because I don't know.

Tue Jan 12, 2016 2:02 am

Juanito84 wrote: Bruce wrote: What makes you think the DMV reports to your private insurance co what you paid for the car?
Just a guess. Where do insurance companies get their numbers of what your car's worth? Apparently from Kelly Blue Book. But where does Kelly Blue Book get its numbers? Would it be the DMV? I'm just asking because I don't know. My bet is they get their info from wholesale car auctions and car dealers.

Tue Jan 12, 2016 5:50 am

In OK you must have insurance to buy a yearly tag. If your insurance expires the day after you buy a tag they don't care. You can now drive the next 364 days without any. Sure they can ticket you and impound your car for not having insurance, but that does nothing to help the car that got damaged by the uninsured driver.

Tue Jan 12, 2016 7:07 am

vwracerdave wrote: In OK you must have insurance to buy a yearly tag. If your insurance expires the day after you buy a tag they don't care. You can now drive the next 364 days without any. Sure they can ticket you and impound your car for not having insurance, but that does nothing to help the car that got damaged by the uninsured driver.

In Colorado, uninsured motorist insurance is required.

Tue Jan 12, 2016 7:48 am

vwracerdave wrote: In OK you must have insurance to buy a yearly tag. If your insurance expires the day after you buy a tag they don't care. You can now drive the next 364 days without any. Sure they can ticket you and impound your car for not having insurance, but that does nothing to help the car that got damaged by the uninsured driver.

Paying sales tax for a private sale over and over is a govt scam.

When I put a hold on my insurance on the bug for the winter months, and engine rebuild time, I received a letter from the DMV saying I needed to explain why I was not carrying insurance on a registered vehicle. The explanation process was easy, and anyone could "scam the system", but at least they were monitoring it, for good or bad.

But I never have heard of insurance valuing your car based off of the listed price on a bill of sale, or title.

My current insurance asked me for what I valued the car at, and away we went. I'm sure if it was something in the abnormal 5 digit range, they might ask for more documentation.

Tue Jan 12, 2016 7:50 am

With all the bs I'm going thru still[ since 7/12/15] on my drunk hit n run, I will have a current appraisal by bonded appraiser before my rail goes on the road again.

Tue Jan 12, 2016 7:58 am

Here in Colorado if you don't have insurance you can't keep it registered. If you can't keep it registered you get charged $25 per month (up to $100) for non-registered months the next time you want to re-register it.

It is a scam to make more money.