The Art Of Damage Assessment: Unraveling The Insurance Adjuster's Process

After an accident, the last thing you want is to be underpaid by your insurance company for your vehicle's damage. This is where insurance adjusters come in. They are responsible for evaluating the value of a vehicle in the event of an insurance claim.

The process of insurance adjustment begins with the claim process. Once a claim is filed, an insurance adjuster will be assigned to assess the damage on your vehicle. They will take photographs of the damaged areas and write an estimate based on the cost of parts and labour rates for your area. To get the best price match, adjusters use software that searches for parts based on your vehicle type and location.

The adjuster will then decide whether it is worth paying for repairs or if the vehicle is a total loss. If the repairs cost more than a certain percentage of the actual cash value (ACV) of the car, it will likely be declared a total loss. The ACV is the fair market value of your car at the current rate and its pre-accident condition.

The insurance adjuster will also assess the car's condition, taking into account factors such as the make, model, year, pre-loss condition, mileage, and sales value of similar cars in the region. This helps determine the fair value of the car.

It is important to note that the claim amount proposed by the insurer is negotiable. You can drive up the value of the car by listing additional features, providing the estimated retail value, and presenting comparable sales data of similar cars in your region.

Inspect damage, take photos, and assess repair costs

Inspecting damage, taking photos, and assessing repair costs are crucial steps in the insurance claims process. Here's a detailed overview of these steps:

Inspecting Damage

When an insurance claim is filed, the insurance company typically sends an adjuster to inspect the damage. This inspection involves a thorough assessment of the property, including any structural damage, to verify the legitimacy of the claim. Adjusters look for signs of pre-existing damage, wear and tear, and intentional damage to ensure the claimed damage is covered by the insurance policy. They also determine if the damage was caused by the incident in question or if it occurred previously.

Taking Photos

Photographs play a vital role in the claims process. Adjusters take multiple photos of the damaged areas from different angles to have a comprehensive visual record. These photos help adjusters identify the scope and extent of the damage, locate the damage, and assess the context, such as the size of the affected area. Photos are also used as evidence to support the claim and can be referred to during negotiations.

Assessing Repair Costs

After inspecting the damage and taking photos, adjusters estimate the cost of repairs. They use computer programs and specialized software to calculate the costs, considering factors like the price of parts and average labour rates in the area. Adjusters may consult mechanics or auto body repair experts for more complex assessments. The repair costs are then compared to the value of the property to determine if it is worth paying for repairs or if the property is considered a total loss.

The assessment also involves evaluating the pre-loss condition of the property, including factors like make, model, year, mileage, and sales value of similar properties in the region. This helps adjusters derive a fair value for the property and determine the appropriate compensation amount.

It's important to note that insurance companies aim to minimise their payouts, so claimants should be prepared to negotiate and provide additional estimates to ensure a fair settlement.

Compare repair costs to car's value

When it comes to comparing repair costs to a car's value, insurance adjusters will typically follow a standard process to value your damaged car. This process involves several steps, including:

• Inspecting the Damaged Vehicle: After you file a claim, the insurance company will send an adjuster to conduct a thorough inspection of your car. They will assess the extent of the damage to determine if it's worth paying for repairs. If the repairs cost more than a certain percentage of the car's value (usually around 50%-70%), the car may be declared a total loss.
• Assessing the Car's Condition: The adjuster will then determine the actual cash value (ACV) of your car by considering factors such as its make, model, year, pre-loss condition, mileage, and the sales value of similar cars in the region. This step is crucial in deciding whether to repair or replace the vehicle.
• Estimating the Cost of Repairs: The adjuster will compare the fair market value of the car with the estimated cost of repairs and replacement parts. If the repair costs are close to or exceed the ACV of the car, it will likely be considered a total loss.
• Total Loss Evaluation: If the cost of repairing your vehicle is similar to or exceeds its value, the car is often deemed a total loss. In this case, you will be offered a settlement based on the ACV of the vehicle, which may be calculated differently from the Kelly Blue Book value. You may also have the option to buy back the car from the insurance company and retain the salvage rights.
• Negotiating Repair Costs: You have the right to negotiate the initial claim amount and dispute the insurance company's valuation if you believe it is too low. It's recommended to gather multiple repair estimates from independent auto body shops and present comparable sales data of similar cars in your region to support your claim.

Remember that insurance adjusters work for the insurance company, and their primary goal is to limit the amount of compensation you receive. Therefore, it's important to be diligent and persistent throughout the claims process, provide detailed documentation of the damage, and consider seeking legal assistance if needed.

Decide: repair or total loss?

When an insurance adjuster declares a vehicle a total loss, it means the cost of repairing the car exceeds its actual cash value (ACV) or a specific percentage of its ACV, as defined by state regulations or the insurance policy terms. This threshold varies depending on the jurisdiction. Some states have a set percentage, while others rely on the adjuster's judgment.

If the repair costs exceed the ACV, the insurance company will typically offer a settlement payout to the policyholder. This payout should represent the vehicle's ACV, less any applicable deductible. However, policyholders can negotiate with the insurance adjuster if they believe the offered settlement is unfair.

• Determine the vehicle's worth: Consider factors such as the year of manufacturing, the value of similar vehicles online, and use websites like Kelley Blue Book (KBB) or the National Automobile Dealers Association's (NADA) guide to estimate the vehicle's pre-accident value.
• Get an estimate: Obtain a written estimate from a qualified mechanic or an auto body repair shop. This will provide an in-depth assessment of the necessary repairs and their associated costs.
• Negotiate with the insurance adjuster: If you feel the settlement offer is too low, negotiate with valid reasons and evidence. Provide comparable listings, independent appraisals, or written estimates to support your claim.
• Get legal help if necessary: If negotiations with the insurance adjuster are unsuccessful, consider hiring an attorney or a public adjuster as a last resort. They can provide expertise and assist in dealing with the insurance settlement process.
• Obtain a written settlement agreement: Once a settlement is agreed upon, ensure that the terms are spelled out in writing to validate the agreement and set clear expectations for both parties.

It is important to note that policyholders have the right to appeal the adjuster's decision if they disagree with the total loss declaration. This may involve getting independent repair estimates or challenging the determined ACV. Additionally, policyholders can choose to keep their totaled vehicle and repair it themselves, but it will likely be rebranded as a "salvage" vehicle, and the settlement payout may be reduced.

Offer settlement based on car's value

When a car is deemed a total loss, the insured person is offered a settlement based on the car's value. This value is calculated differently from the Kelly Blue Book value and takes into account the condition of the car and the replacement cost through local sellers.

• Know what you are selling to the insurance company: Provide the insurance adjuster with the sticker details that accompanied your car when you purchased it. If you don't have the sticker, contact the dealer where you purchased the vehicle and ask for a list of your vehicle's features. This way, you can ensure you're getting a fair market value.
• Prepare a counteroffer: Research the value of your car and come up with a number that you feel is fair for a settlement. It should be the absolute minimum you are willing to accept. Keep this number in mind but don't reveal it to the adjuster as it could impact what they offer you.
• Determine the comparables (comps) in the area: Visit used car websites and look for cars with similar features and mileage as yours.
• Obtain a written settlement offer: Ask the adjuster to send you a copy of the valuation report, payoff lien amount, and net settlement amount before accepting any offers.
• Make your counteroffer: Compare your written offer with similar websites and used car printouts, and determine a reasonable counteroffer. Email the insurance carrier your counteroffer and attach all documentation that you based your counteroffer on.

Remember, you don't have to accept the insurance company's first offer. You can negotiate the offer if you believe it does not reflect the actual cash value of your car.

Negotiate with claimant on final settlement

Negotiating with a claimant on a final settlement is a critical aspect of the insurance adjuster's role. Here are some detailed strategies and considerations for this process:

Understanding the Adjuster's Role and Tactics

Insurance adjusters are hired by insurance companies to investigate claims and determine the company's liability and the compensation amount. It is important to remember that adjusters are trained to reduce compensation and deny liability. They are not looking for the truth but aim to save the company money. Thus, their initial settlement offers are often extremely low to test the claimant's awareness of their rights and the value of their claim.

Knowing Your Bottom Line

Before entering negotiations, it is crucial to determine the minimum settlement amount you will accept. This figure should be based on the true value of your vehicle, the extent of damages, and any relevant economic and non-economic losses. Having this number in mind will help you stay focused during negotiations and ensure you don't settle for less than what you deserve.

Gathering Evidence and Documentation

Evidence and documentation are critical to supporting your claim and negotiating a higher settlement amount. This includes medical records, evaluations from medical experts, auto repair bills or estimates, police reports, eyewitness statements, photos or videos of the accident scene, and proof of lost income. Having strong evidence will improve your negotiating position and increase your chances of a higher settlement offer.

Calculating a Full Settlement Amount

Using your evidence and personal experience, calculate a full settlement amount that includes all pertinent past, current, and future economic and non-economic damages. This should reflect what you legally deserve and help you determine if the adjuster's offer is reasonable.

Not Accepting the First Offer

It is almost always advisable to decline the insurance company's first settlement offer. Their initial offer is typically far below what they are willing to pay. By rejecting the first offer, you demonstrate your awareness of your rights and the value of your claim.

Negotiating Using Strong Evidence

During negotiations, use your evidence and documentation to support your claim and justify a higher settlement amount. Emphasize the strongest points in your favor, such as the other party's fault in the accident, the severity of your injuries, reasonable medical costs, lost income, property damage, and any long-term physical effects or emotional distress caused by the accident.

Consulting a Lawyer

If you feel overwhelmed or unsure about the negotiation process, consider consulting a lawyer, especially a personal injury attorney. They can help you navigate the complex world of insurance settlements and ensure your rights are protected. Most personal injury lawyers work on a contingency fee basis, so you don't pay unless they get you a monetary award.

Getting the Settlement in Writing

Once you and the adjuster reach an agreement, confirm the terms in writing. Send a letter to the adjuster stating the agreed-upon settlement amount, the date by which you expect to receive the settlement, and the injuries or damages covered by the settlement. This protects both parties and sets clear expectations.

Frequently asked questions