Auto Insurance Negotiation: Your Total Loss Claim

Negotiating with an auto insurance company after a car accident can be a stressful process, especially if your vehicle has been declared a total loss. A total loss means that the cost of repairing your car exceeds its value, and insurance companies may also have their own thresholds for this. When this happens, the insurance company will offer you a settlement based on the vehicle's value. However, you may find their estimate of your car's fair market value to be very low, and you may want to negotiate for a higher payment.

To effectively negotiate with an auto insurance company, it is important to gather all relevant information about your vehicle, including its make, model, year, mileage, and condition. You should also familiarise yourself with your insurance policy, paying close attention to the coverage, deductibles, and any applicable clauses related to total loss claims. Additionally, it is crucial to independently research your vehicle's worth using sites like Kelley Blue Book and NADA Guides.

When negotiating, it is important to remain calm and professional. Express your concerns assertively and provide any evidence or documentation that supports your claim. Remember, the insurance adjuster's primary objective is to settle claims efficiently and cost-effectively for the insurance company, so be prepared to negotiate and provide compelling evidence to support your case.

Research your car's value

Researching your car's value is a crucial step in negotiating with auto insurance for a total loss claim. Here are some detailed steps to help you through the process:

Determine the Vehicle's Worth

Start by assessing the value of your car, taking into account various factors such as its make, model, body style, and mileage. These factors play a significant role in calculating the compensation you can expect from the insurance company. Online tools like Kelley Blue Book (KBB) and Edmunds can provide a ballpark figure for your vehicle's value. However, it's important to note that the estimate may differ based on the condition of your car and other factors.

Get an Expert Estimate

Consider getting an in-depth estimate from a qualified mechanic or an expert witness. They can provide a detailed assessment of the necessary repairs, which can be useful during negotiations. This step will help you understand the extent of the damage and the potential costs involved.

Review Comparable Vehicles

Location can impact a vehicle's value. Therefore, it's essential to find comparable vehicles for sale in your area that match your car's year, make, and model. Visit websites like Auto Trader and Car Gurus to find similar vehicles and print out the listings. These comparables will be valuable when negotiating with the insurance company, as they provide a real-world perspective on the market value of similar cars.

Gather Documentation

Collect as much documentation as possible, including your vehicle's service history, receipts for any upgrades or repairs, and evidence of its condition before the accident. This documentation will support your case and demonstrate the value of your vehicle. It's essential to have concrete evidence to back up your claims during negotiations.

Prepare Your Counteroffer

If you believe the insurance company's offer is too low, prepare a counteroffer supported by your research and documentation. Explain why you think your vehicle is worth more than their initial offer. Use the information you gathered about comparable vehicles and expert estimates to strengthen your argument. Present a well-informed and reasonable counteroffer to increase your chances of a successful negotiation.

Consult a Professional

If negotiations with the insurance company are not progressing, consider consulting an attorney or a public adjuster. They can provide valuable expertise in dealing with insurance settlements and help you navigate the process. Remember that hiring a professional may incur additional costs, so evaluate the potential increase in your settlement amount before making a decision.

Get an estimate

To determine the value of your car, you must first get an estimate. A qualified mechanic or expert witness can provide an in-depth estimate that details all necessary repairs. You can tow your car to an approved auto shop, where they will give your adjuster an estimate for repairs.

You can also get an estimate from a qualified mechanic, or use online tools to get a ballpark figure. Websites like Kelley Blue Book (KBB) and the National Automobile Dealers Association (NADA) can help you determine your vehicle's value for free.

If you've customized your car, find any receipts for any major work done in the last seven or eight months, such as new tires. These added items may increase the fair market value and are the best way to get more money for your car from insurance. If you don't have the receipts, contact the mechanic and ask them to provide you with a copy.

If you don't have the sticker details that accompanied your car when you purchased it, contact the dealer where you bought the vehicle and ask for a list of your vehicle's features. The dealer should keep records of the vehicles they have sold.

If you're unable to locate this information, search online for your vehicle's year, make, and model to determine its value.

Review the adjuster's offer

Reviewing the adjuster's offer is a critical step in the negotiation process for a total loss claim. Here are some detailed instructions on how to approach this stage:

Understand the Adjuster's Offer

Before entering negotiations, it's important to carefully review the details of the adjuster's offer. Examine the specific amount they have determined for the settlement and how it relates to the value of your vehicle and the extent of the damage. Understanding their valuation and assessment will help you identify areas where you may want to challenge their conclusions or negotiate for a higher settlement.

Compare with Your Own Research

It's essential to conduct your own research to determine your vehicle's worth independently. Use online tools, such as Kelley Blue Book (KBB) or the National Automobile Dealers Association's (NADA) website, to get an estimate of your vehicle's value. Consider factors such as the year of manufacturing, similar vehicles for sale online, and local market prices for comparable vehicles. This research will help you identify any discrepancies or undervalued aspects of the adjuster's offer.

Gather Supporting Evidence

To strengthen your case, gather supporting evidence that demonstrates your vehicle's value. Obtain a written estimate from a professional body shop or a qualified mechanic, which can show that your vehicle is worth more than the adjuster's appraisal. Additionally, ask for your Certified Collateral Corporation (CCC) report, which is an itemized list of your vehicle's features used by the adjuster to determine its market value. Review this report for accuracy and ensure that all relevant features and trim levels are listed correctly.

Prepare a Counteroffer

If you believe the adjuster's offer is too low, prepare a counteroffer that reflects the true value of your vehicle. Utilize your research and documentation to support your counteroffer. Include receipts or estimates for any recent work done on your vehicle, as this can help prove its worth. Remember to be reasonable and well-informed in your counteroffer, as insurance companies expect some level of negotiation in these situations.

Communicate and Negotiate

Present your counteroffer and supporting evidence to the adjuster and initiate negotiations. Communicate clearly and provide detailed explanations for why you believe your vehicle is worth more than their initial offer. Remember that you have the right to negotiate and ask for a higher settlement if you feel it is warranted. However, always maintain a professional and respectful tone during negotiations.

Seek Legal Advice if Necessary

If negotiations with the adjuster prove unsuccessful and you still believe you have a strong case, consider seeking legal advice. Hiring an attorney can be a last resort option to help relieve the stress of total loss negotiations and provide you with skilled representation. They can guide you through the process and assist in fighting for a fair settlement amount. Keep in mind that hiring an attorney typically incurs costs, and there is no guarantee of a higher settlement even with legal representation.

Get legal help if needed

If you're unsatisfied with the negotiation efforts, you can hire an attorney as a last resort. An attorney will be more familiar with the process and can help you fight for the settlement amount you think you should have. They are armed with experience and skill, and can help relieve some of the stress surrounding total loss negotiations.

It is important to point out that there will likely be a cost associated with hiring an attorney, and there is no guarantee that you will win a new settlement even if you hire one. As such, it may be a good idea to ensure that the attorney’s fees won’t outweigh the potential increase in your settlement amount if your insurance company agrees to a higher payout.

If the insurer refuses to negotiate fairly, an attorney can demand supporting evidence for the insurer’s low offer and possibly pursue bad faith claims if unreasonable conduct is evident. During negotiations, immediately ask about your policy’s loss of use coverage for rental reimbursement.

Approaching negotiations calmly but armed with thorough research is key. Your insurer must honor its obligation to make you whole, so don’t hesitate to push back if their valuation seems inadequate.

Get everything in writing

Getting everything in writing is an important step in the negotiation process. When you and your claims adjuster agree on a settlement, be sure to get the terms in writing to validate the agreement. This ensures that everyone understands their financial obligations and is on the same page with expectations. It also helps to protect both parties by setting appropriate expectations and helping to ensure they are met.

Ask the adjuster to show you the sales tax, the payoff lien amount, and the net settlement amount. The insurer is responsible for paying out the state sales tax and the amount to be paid directly to the auto financing company for any outstanding vehicle loans. Having these monetary amounts on hand will help when negotiating your total loss settlement.

You should also ask for a copy of the Certified Collateral Corporation (CCC) report. A CCC report is an itemized list of your vehicle's features that an adjuster uses to help determine the market value of your car. Check that all of your vehicle's features are considered in this report and that the report correctly lists the mileage.

Once you have agreed on a settlement, ask the adjuster to give you a written statement along with the total loss payment offer. This statement should include estimates, evaluations, and deductions used in calculating the payment, as well as the source of these values.

Frequently asked questions