How a few dollars worth of parts can total a vehicle

Changes in both auto parts supply chains and manufacturers’ discontinuation of certain parts are causing claims adjusters to deem newer vehicles as total losses, even though the vehicles have sustained what looks to be only superficial damage.

“I’ve asked a number of adjusters that I speak with, and they are all saying the same thing,” says Jesica Ryzynski, a claims specialist at Mitch Insurance. “All of a sudden, we’re seeing a dramatic increase in vehicles being deemed a total loss.”

She’s been involved with six or seven claims over the past two months involving cars her clients assumed could be repaired that ended up totalled out.

“When I see these photos of vehicles after a loss, I ask, ‘Why on earth is this a total loss?’ The vehicle looks to be fine, or something very cosmetic to the untrained eye,” she says.

“Maybe the hood’s a little bit dented. But there can be so much more going on, and that’s often frustrating. Sometimes people have managed to drive that vehicle home…but then [a mechanic does a] full teardown and finds things that either are not repairable or it’s not worth repairing.”

For these clients, the problem is not caused by the kind of large-scale parts unavailability the insurance industry saw during COVID-19. “The issue is that [specific parts are] often discontinued,” she adds. “You can’t find them now.”

Nuts and bolts problems

For example, specialized bolts are required to secure a pickup truck’s bed behind the cab. If those parts are unavailable, the vehicle gets totalled, says Mark Fernandez, national director of operations at Accurate Auto Appraisal.

“It’s typically four to six bolts [to secure the bed] and they’re almost always one-time use. And [sometimes] they’re just not made anymore,” he says. “For example, if you go and look for a 2009, [the] truck’s still probably in good shape, except that it isn’t repairable because…you can’t put the bed back on. All shops should be using [original equipment] bolts.”

He adds some shops without manufacturer certifications will use other bolts, but stresses that’s not safe because they may not be strong enough to hold the bed in place during even routine driving.

“Last thing we want to see is a pickup bed that comes flying off on the 401,” he says.

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He dealt with another unexpected totalling due to a dead battery in a 2017 Chevrolet Volt that thieves had attempted to steal. The manufacturer had discontinued battery production even though the vehicle wasn’t yet 10 years old.

“There is a known issue with these batteries, for which GM is providing a buyback. But they [maybe] didn’t manufacture enough batteries…so if anyone has to replace that battery…they’re out of luck,” he says.

“There’s still a piece of information that’s missing from my puzzle: was the battery [already] dead and that’s why they couldn’t steal [the car]? Or was it [damaged] during the [theft] attempt, when they were messing around with the electrical system?”

Consoling clients

To navigate client disappointments stemming from these situations, Ryzynski’s built working relationships with appraisers she can talk to about the nuances of certain repairs. “I can have [these] conversations…to help when [a client’s] had a total loss and questioning [why their vehicle] could not be fixed.”

She recently saw a 2023 pickup where a body twist led to an appraiser totalling the vehicle after accounting for what parts were needed, the length of time to get those parts, and how long the client would be in a rental. “The insurance company is going to weigh [that] out [and may determine it] doesn’t make any sense,” she says.

Plus, tariffs from the ongoing cross-border trade war are making some parts too expensive to source.  

Another issue when totalling out older cars is that it’s difficult to determine values. Appraisers will pull recent sales figures for comparable vehicles, which requires data for the same model year, trim level, and, as close as possible, kilometres driven.

“That becomes very challenging with older model vehicles,” Ryzynski says. “If [a client has] a 2007 vehicle, to find that vehicle for sale, because they’re looking [for its] current market value, [is difficult]. There are often no comparables, or very, very few.”

Insurers also want to stay within the claimant’s province and, if possible, their metropolitan area or other jurisdiction. “They [also] look at the actual condition of the insurance vehicle. If you have babied that vehicle, you’re going to get some extra points for that,” she adds.  

Phil Porado

Phil, an award-winning journalist with over 30 years of experience in financial topics, has been managing editor of Canadian Underwriter for more than three years.