When An Insurance Company Mistakes Your Rare BMW For A Clunker

The owner of a rare 1981 BMW M535i came home last month to find his car had been smashed by an out-of-control Volkswagen. Now the insurance company says the BMW is only worth $1,500, totaled. Enthusiasts? Man the barricades!

The story comes from the forums of MyE28.com, where Christopher Kohler of Phoenix has detailed the battle entering its fourth week with State Farm. Kohler wasn't home the night a 1998 VW Jetta careened through his neighbor's yard and smacked into his M535i, and at first neither he nor his neighbors noticed any severe damage.

But then Kohler saw coolant on the ground:

I focused more closely on the airdam. I noticed it had made contact with the oil cooler, which bent the bracket, sending the cooler and the auxiliary fan into the AC condenser, which is what pierced the radiator. On top of that, the lower part of the core support is indeed bent.

Kohler had bought the M535i with 147,000 miles last year as a restoration project; only about 40 are known to have been shipped to the United States, and he had insured the car for $6,000. He compiled a parts list of about $2,500 and gave it to State Farm, the insurance company for the VW driver.

After analyzing his car, State Farm offered him $1,542.07 and a salvage title, using a plain 528i from Pennsylvania with 130,000 miles as the closest comparable vehicle.

Here's the response from State Farm:

Your vehicle was in Poor condition at the time of the accident the interior was stripped the dash was cracked and damaged....Because you were in the process of rebuilding the vehicle we do not owe for what you were going to place in the vehicle, again we owe for the repairing the damage or the actual cash value for the vehicle at the time of the accident.

Kohler has rejected the settlement mainly because of the salvage title, which he contends would destroy any value restoring the car might create. And the fellow enthusiasts on MyE28 have jumped in with advice on handling the insurance claims, ways to value his car and general support in fighting The Man.

(H/T to David!)