Ethical Question

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Bigfoothunter
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Ethical Question

Post by Bigfoothunter » Wed Mar 16, 2011 6:10 pm

I had a car hit the back of my car, the accident caused minimal damage of about $1,000. I went to dealership and got an estimate, and then insurance adjuster for the person that hit my car provides another estimate and check directly to me.

It is ethical for me to keep the money and not get my car fixed? It is an older car, and the damage is hardly noticable. The dealership said all the damage is cosmetic. The car has about 90k miles on it.

I would appreciate your feedback. Bigfoot

The Wizard
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Post by The Wizard » Wed Mar 16, 2011 6:16 pm

You can do what you want with the $$$, ethically.
Point being: if you were to sell the car as-is next week, it would sell for less due to the damage...

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Post by Triple digit golfer » Wed Mar 16, 2011 6:17 pm

Absolutely, there's nothing unethical about it. You were wronged. Your car is worth $1,000 less now. You are entitled to damages. Just my opinion.

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kpanghmc
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Post by kpanghmc » Wed Mar 16, 2011 6:18 pm

I would not have any problem with that. The value of your car went down due to the accident and the check is to reimburse you for that depreciation in value.
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sscritic
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Post by sscritic » Wed Mar 16, 2011 6:18 pm

It is certainly ethical. Your car was damaged. It is now worth less than it was before. You have now been "made whole."

You used to have a $8,000 car, say; now you have $7,000 car and a check for $1000.

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woof755
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Post by woof755 » Wed Mar 16, 2011 6:20 pm

I agree. No guilty feelings.

In fact, you are doing the reasonable thing. The only way to avoid getting the $1000 for a car you knew you weren't going to fix would have been to not report the accident at all--not fair to you.
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stlrick
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Post by stlrick » Wed Mar 16, 2011 6:23 pm

If they had wanted to make certain how the money was used, they would have made the check payable to the collision shop. It was made out to you, for you to use as you wish.

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Post by GammaPoint » Wed Mar 16, 2011 6:23 pm

As others said, nothing to feel guilty about. I'd feel much more guilty about accidentally littering. Glad you didn't get hurt.

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serbeer
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Post by serbeer » Wed Mar 16, 2011 6:24 pm

yes

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touchdowntodd
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Post by touchdowntodd » Wed Mar 16, 2011 6:27 pm

id be glad not to get hurt and keep the $1k for myself..

i wouldnt fix something very minor cosmetically, and at 90k, id still be driving the car for another 100k so screw the value LOL
tryin to do this right... thanks guys

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Opponent Process
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Re: Ethical Question

Post by Opponent Process » Wed Mar 16, 2011 6:27 pm

Bigfoothunter wrote:I had a car hit the back of my car
if you were hit by another car from behind, ethical.

if you caused another car to hit you from behind, maybe not so much.

sometimes it's hard to know which is which. I always take the money when I can get it, but do usually feel bad for the other party.
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woof755
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Post by woof755 » Wed Mar 16, 2011 6:31 pm

serbeer wrote:yes
explain, please
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monkey_business
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Post by monkey_business » Wed Mar 16, 2011 6:42 pm

Realistically speaking, in this case you actually come out ahead by keeping the money rather than getting the car fixed. Suppose the car is worth $10,000. Suppose the car is now worth $9,000 due to the damage. If you repair it, it might still not be worth $10,000. After all, people might notice it was repaired, and if you're ethical, you might disclose this information yourself. In such a case, the car will probably sell for less.

Also, as the car gets older and depreciates more, the damage will become less important and effectively will affect the car's value less and less. If you wait until the car is worth $3,000, I am pretty sure it will not be worth $2,000 because it has some cosmetic damage - so that $1,000 will actually be worth even more, relative to the car's value.

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dm200
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Re: Ethical Question

Post by dm200 » Wed Mar 16, 2011 7:01 pm

Bigfoothunter wrote:I had a car hit the back of my car, the accident caused minimal damage of about $1,000. I went to dealership and got an estimate, and then insurance adjuster for the person that hit my car provides another estimate and check directly to me.

It is ethical for me to keep the money and not get my car fixed? It is an older car, and the damage is hardly noticable. The dealership said all the damage is cosmetic. The car has about 90k miles on it.

I would appreciate your feedback. Bigfoot
Yes, in this case, this is just fine, IMO. It is your choice. If the insurance company wanted the car to be fixed, they would have made the check out that way. What you do give up (May be no0n-issue) is the right to ask for more because there is hidden damage that is only discovered when the repair shop does the work.

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frugalhen
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Post by frugalhen » Wed Mar 16, 2011 7:53 pm

it is completely ethical. You are given a check to compensate you for "property damage"

The property is your car. If you choose to spend the money it is up to you. You do not have to use it to repair the car.
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Bigfoothunter
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Post by Bigfoothunter » Wed Mar 16, 2011 7:54 pm

Many thanks for the responses. It makes me feel more confident in my decision. Bigfoot

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rcshouldis
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Re: Ethical Question

Post by rcshouldis » Wed Mar 16, 2011 9:41 pm

Bigfoothunter wrote:I had a car hit the back of my car, the accident caused minimal damage of about $1,000. I went to dealership and got an estimate, and then insurance adjuster for the person that hit my car provides another estimate and check directly to me.

It is ethical for me to keep the money and not get my car fixed? It is an older car, and the damage is hardly noticable. The dealership said all the damage is cosmetic. The car has about 90k miles on it.

I would appreciate your feedback. Bigfoot
Of course ! In fact it makes sense to save that money for your next auto purchase.

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Post by gabylon » Thu Mar 17, 2011 12:12 am

I agree it is ethical to keep the money. You deserve to be compensated for the damage whether you fix it or not.

My only nitpick with some of the arguments is that I don't believe there is necessarily a one-to-one relation between the cost of the repair and the reduction in the car's value. Particularly on a well used car. I would venture the OP would not pay $1,000 more for the repaired car than for his damaged car, since he says it's hardly-noticeable and doesn't feel the need to fix it.

And I may now understand the OP's dilemma. If it were his money, he wouldn't spend it, because he believes it's not worth the cost, but if it's the insurance's money... But again, it was the other party's fault, and it is standard procedure to value the compensation as the cost of getting the damage fixed. No real dilemma here.

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Post by abuss368 » Thu Mar 17, 2011 8:04 am

Take the money and give it to Madoff to invest.

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serbeer
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Post by serbeer » Thu Mar 17, 2011 10:01 am

woof755 wrote:
serbeer wrote:yes
explain, please
OP asked whether "It is ethical for me to keep the money and not get my car fixed?" My opinion is that it is ethical. His car value is reduced. It is his moral right to chose to drive the car with reduced value and keep the compensation in form of money.

Moreover, insurance companies account for that. Example: my parents had hail damage to their roof. Insurance company paid in form of check. My parents chose to live in the house with damaged roof and invest the money. In about 6 years, another hailstorm hit. They filed claim again. Insurance company declined to pay because they know there was prior claim (it is in the database, so even different insurance company would see it), the roof has not been replaced as can be easily seen, so the roof was damaged prior to storm already, hence nothing to compensate. If parents replaced the roof the first time, they would have new roof and would have been compensated for the 2nd hail damage to it as well. Bad decision in retrospect, but they were within their moral rights to choose to continue to live under bad roof and keep the compensation. And live with consequences. "You have the right to make decisions and be responsible for them."

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Post by eucalyptus » Thu Mar 17, 2011 11:26 am

"My only nitpick with some of the arguments is that I don't believe there is necessarily a one-to-one relation between the cost of the repair and the reduction in the car's value."


I agree. Reimbursement is for cost of reapirs, not diminution in value. That becomes a problem with high value cars whose resale value may be greatly affected by an accident history.

Anyway, to the OP - keep the money if you'd like.

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Post by paulsiu » Thu Mar 17, 2011 11:34 am

i had this happened to me as well. Someone rear-ended me and estimate was for replacing the bumper cover and the dent. I talked to my body shop and had the repair the dent and I kept the somewhat scratched up bumper cover. I figure it'll get scratch up again any way and pocketed about $600.

It's perfectly legal and ethical.

Unethical would be to blame a pre-existing problem on the collision.

Paul

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Post by chaz » Thu Mar 17, 2011 11:40 am

It's legal and ethical to keep the money or repair the damage.
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Post by Opponent Process » Thu Mar 17, 2011 12:03 pm

how about these (first one is true-my own condition-second one is hypothetical)?:

1. you keep getting rear-ended and pocket the money each time.
2. you park on the street instead of in your garage or assigned parking space, and collect money from people who hit your car.

my curiosity stems from the fact that we've actually made some pretty decent money from our (paid off) cars getting hit. at this point the cars produce a small passive income stream, or represent a small side business.
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JimHalpert
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Post by JimHalpert » Thu Mar 17, 2011 12:17 pm

Insurance companies that offer a check hope you will accept it as (many times) their first offer is actually less than what it would cost them to repair the car. Make sure the offer is fair.

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Rod Flash
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Post by Rod Flash » Thu Mar 17, 2011 9:39 pm

I've been reading these forums for a long time, and this is the first time I've ever seen unanimous consensus on any topic.

And I concur, totally ethical.

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Post by Kulak » Thu Mar 17, 2011 11:49 pm

Fine, I'll bite.

Fixing it or not isn't a dilemma, but I can kind of see an argument that accepting the full $1000 is unethical. You're entitled to be made whole, of course. But suppose the damage doesn't reduce the value of the car by $1000 -- that is, given the value of the car, you and 95% of the "population" of owners, had you done the damage yourself, would just drive it that way. And suppose potential buyers would discount only it by $500 on average. So in sscritic's terms you now have a $7500 car and a $1000 check. I guess the question to ask yourself is, "Am I profiting from this?" If yes, one solution might be to give the surplus back to the other driver to offset his (presumably) higher premiums.

I drove very cheap cars in in my 20s. On at least three occasions I was rear-ended with light/cosmetic (but unmistakable) damage and just told the other driver not to worry about it. Their expressions of relief and gratitude were more gratifying than money.

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Post by SSSS » Fri Mar 18, 2011 12:30 am

Opponent Process wrote:2. you park on the street instead of in your garage or assigned parking space, and collect money from people who hit your car.
I know of a guy who parks his expensive motorcycle sideways on a very narrow street, so that everyone has to swerve around it. It's been there for about three years and somehow has not been hit yet.

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Post by PorBogle » Fri Mar 18, 2011 1:04 am

My car got backed into at 4 in the morning by my old neighbor who didnt see it. We pay for insurance for a reason and, most likely, no matter how much the damages amounted to be, they would raise his rates. I went to the most expensive shop in town, got an estimate faxed and received a check for the amount the next week. I then got the car fixed for about 1/3 of the check and pocketed the rest. My insurance was paid for the next couple years. Ethical or not, I am not sure. Good for me on the tax we call insurance, hell yeah.

**I live in CA and think I remember something about accident forgiveness with AllState, which he had.
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Post by Tiekoon » Fri Mar 18, 2011 1:48 am

Bigfoot

Speaking of ethics, how about we flip this conversation?

Just how ethical was it for the insurance company to buy you off for the $1000. I would suspect in the act of endorsing the settlement check, you relinquished/waived any and all claims for additional or future unseen damages. To include your body, as well as the automobile!

Not an attorney or insurance agent here, just “been there – done that”. Also, not saying right or wrong but, to be sure, the offending party's agent/adjuster was acting in the best interest of his employer.

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Re: Ethical Question

Post by wlpotts » Fri Mar 18, 2011 4:21 am

Bigfoothunter wrote:I had a car hit...the accident caused minimal damage of about $1,000. and then insurance adjuster ... provides another estimate and check directly to me.

It is ethical for me to keep the money and not get my car fixed?
In my opinion, if you have accepted the monies, the ethical thing to do is to make the repair happen since that is what the payment is for. If you decide not to have the repairs done and keep the money as a personal gain then that is another matter.

You might want to consider what the ethical and morally responsible thing to do is when you place a resale value on the vehicle.

Respectfully,
WLP
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Re: Ethical Question

Post by monkey_business » Fri Mar 18, 2011 10:45 am

wlpotts wrote:
Bigfoothunter wrote:I had a car hit...the accident caused minimal damage of about $1,000. and then insurance adjuster ... provides another estimate and check directly to me.

It is ethical for me to keep the money and not get my car fixed?
In my opinion, if you have accepted the monies, the ethical thing to do is to make the repair happen since that is what the payment is for. If you decide not to have the repairs done and keep the money as a personal gain then that is another matter.

You might want to consider what the ethical and morally responsible thing to do is when you place a resale value on the vehicle.

Respectfully,
WLP
You can typically just ask for cash in lieu of repairs. The insurance company doesn't care if you fix your car, they are just reimbursing you for damages incurred based on your policy with them.

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Conscience

Post by Munir » Fri Mar 18, 2011 11:42 am

The fact that the OP asked the question means that there is an ethical issue at hand. It doesn't matter what the insurance company wants or thinks. It's what the OP thinks and feels about it. Someone has paid for this $1000, whose purpose is car repair. Ultimately, it came out of the customers' premiums paid by individuals to the insurance company. I do not think there a slam-dunk response of "yes, it's ethical". The OP is commended for asking the question. The decision is really up to him and his conscience, and not up to others (on this forum) nor for the insurance company to decide.

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Post by marco100 » Fri Mar 18, 2011 11:54 am

Yes, it is ethical to keep the money you received, and not get the car repaired....and here's the "real reason" why....


BECAUSE, you DID NOT get paid the money "to repair the car."

You got the money TO SETTLE YOUR LEGAL CLAIM against the person who hit you.

The insurance company, in SETTLING the claim by paying you money, did NOT admit any fault by its client. What you gave them in exchange for the money, was NOT a promise to repair your car, but rather, a promise NOT TO SUE their client for damages.

That's it. That's what the insurance company "bought" from you. Not a "car repair," but rather, a promise from you to NOT take legal action.

Were you to turn around and FILE A LAWSUIT against their client for property damage to your vehicle, then yes that would probably be UNethical, since the money you received was in exchange for your promise NOT to file a lawsuit.

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Re: Conscience

Post by marco100 » Fri Mar 18, 2011 12:03 pm

Munir wrote:The fact that the OP asked the question means that there is an ethical issue at hand. It doesn't matter what the insurance company wants or thinks.
Of course it matters. But what the insurance company "thinks" or "wants" is embodied in the terms of the settlement agreement, which could be a separate piece of paper or could be a notation on the check.

The insurance company did NOT "want" OP to fix his car. Unless OP agreed to fix his car, he has no legal, moral, or ethical obligation to do so.

What the insurance company "wants" is for OP NOT TO SUE their client.

A settlement agreement is a legally binding contract. As long as OP fulfills the terms of that contract in good faith, he's morally and ethically A-OK.


It's what the OP thinks and feels about it. Someone has paid for this $1000, whose purpose is car repair.
This is totally wrong. The purpose of the payment/settlement is not for car repair, it is to settle a legal claim. If the insurance co. wanted OP to fix his car with the money, the payment would have been conditioned on his fixing it. Obviously it was not.

Ultimately, it came out of the customers' premiums paid by individuals to the insurance company.
That's what the premiums are for. To pay valid claims. Nothing in OP's post indicates his claim lacks validity in any respect.



I do not think there a slam-dunk response of "yes, it's ethical".


Actually it's about as close to a slam dunk as you could ever get in this sort of thing.


The OP is commended for asking the question. The decision is really up to him and his conscience, and not up to others (on this forum) nor for the insurance company to decide.
I have no idea what caused the OP to even think it might be unethical in the first place not to get it fixed. It sounds like a friend or relative might have been jealous of this little "windfall" and wanted to guilt OP into making an unnecessary repair.

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Post by SP-diceman » Fri Mar 18, 2011 1:48 pm

No one would slip and fall in a Kmart,
if you had to use the money for its intended purpose.




Thanks
SP-diceman

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monkey_business
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Post by monkey_business » Fri Mar 18, 2011 4:01 pm

SP-diceman wrote:No one would slip and fall in a Kmart,
if you had to use the money for its intended purpose.




Thanks
SP-diceman
These kinds of cases do not aim for reimbursement but more for negligence, punitive damages, etc. If someone "slips and falls" in a Kmart and break their leg, they will not simply seek compensation for their medical bills, but also for a plethora of other things they could come up with, such as "emotional damage", in an attempt to maximize their claim.

If you incur $X damage to your insured property and you get $X reimbursement, it does not matter how you use the money. Suppose I own $50,000 of inherited jewelry that is insured and gets stolen during a burglary. Does it mean I am ethically obligated to buy jewelry with the $50,000 the insurance company pays out to me? It is "intended" to be $50,000 for jewelry losses, after all.

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Re: Conscience

Post by Munir » Fri Mar 18, 2011 5:32 pm

marco100 wrote:
Munir wrote:The fact that the OP asked the question means that there is an ethical issue at hand. It doesn't matter what the insurance company wants or thinks.
Of course it matters. But what the insurance company "thinks" or "wants" is embodied in the terms of the settlement agreement, which could be a separate piece of paper or could be a notation on the check.

The insurance company did NOT "want" OP to fix his car. Unless OP agreed to fix his car, he has no legal, moral, or ethical obligation to do so.

What the insurance company "wants" is for OP NOT TO SUE their client.

A settlement agreement is a legally binding contract. As long as OP fulfills the terms of that contract in good faith, he's morally and ethically A-OK.


It's what the OP thinks and feels about it. Someone has paid for this $1000, whose purpose is car repair.
This is totally wrong. The purpose of the payment/settlement is not for car repair, it is to settle a legal claim. If the insurance co. wanted OP to fix his car with the money, the payment would have been conditioned on his fixing it. Obviously it was not.

Ultimately, it came out of the customers' premiums paid by individuals to the insurance company.
That's what the premiums are for. To pay valid claims. Nothing in OP's post indicates his claim lacks validity in any respect.



I do not think there a slam-dunk response of "yes, it's ethical".


Actually it's about as close to a slam dunk as you could ever get in this sort of thing.


The OP is commended for asking the question. The decision is really up to him and his conscience, and not up to others (on this forum) nor for the insurance company to decide.
I have no idea what caused the OP to even think it might be unethical in the first place not to get it fixed. It sounds like a friend or relative might have been jealous of this little "windfall" and wanted to guilt OP into making an unnecessary repair.
Macro100 is talking legalese, and I am discussing ethics. Two differtent worlds.

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