Read the following information about Matt. Has this ever happened to you or someone you know? What could Matt have done to prevent the situation he experienced?

Matt was recently in a major accident that caused extensive damage to his eight-year-old sedan. When his insurance company asked Matt to get an estimate of the cost of repairs, he took it to a well-respected repair shop. They quoted a total repair bill of $5,250. Matt was prepared to pay his $250 deductible as long as the insurance company paid the rest. Since the book value of a car of his make and model, in good condition, is only $3,240, the insurance company "totaled" his car, declaring it a total loss and reimbursing him only to the extent of the book value. Matt must either repair the car using the insurance company reimbursement plus over $2,000 out of his own pocket or accept the loss and buy another car.

Answer rating: 100% (QA)

Present book value of the car in good condition of similar make and model 3240 Total cost of repai... View the full answer