How to Get the Most out of Your Total Loss Vehicle Settlement

If you were in an accident and the insurance company has declared your car a total loss, you will want to get the most money you can from the insurance settlement to help you afford a replacement vehicle. It is a sad fact that most vehicles are worth less than the amount you owe on them, so it is important to get every dollar you can.

Do You Have Rental Coverage?

It is important that you ask if you have rental coverage and how much it will cover for each day you are in a rental car. This coverage usually ends a few days after the insurance company settles the claim with you. They will not wait forever for you to agree to a settlement though, so be reasonable in your negotiations.

Move the Car Right Away

To make sure you are not caught with out of pocket expenses, you should immediately agree to your insurance company’s request to take the vehicle for its salvage value. The salvage value is the amount your car is worth to be sold as parts in its current, post accident condition. If you delay in releasing the vehicle, storage charges at the tow yard will build up and ultimately become your financial responsibility. Often, the insurance company will give you a “drop dead” date by which you must either take the car yourself or release it to the company.

If you think you can fix the car yourself, you do not have to release the car to the insurance company. You can instead get it towed to your residence or other storage location. Some insurance companies will pay for the cost of this tow, since they would have to pay another tow even if they took possession of the salvage. Do not forget to ask about this if the adjuster does not mention it to you. Although not a common practice, some people will try to negotiate with the insurance company to get a lower salvage value, thereby increasing the final settlement check.

Fixing the Car Yourself

If you are a mechanic and choose to fix the car yourself, make sure you first investigate your state’s regulations for repairing a total loss and re-registering it. In some states, you must first apply for a “Total Loss Salvage Title” which is a title assigned to your vehicle that gives you ownership, but will not allow you to register the vehicle. Once the vehicle is repaired, you must have it towed to a designated inspection station so that it can be approved as roadworthy. Another reason states require this inspection is to confirm the repairs are done with legally-obtained parts. After the inspector clears your car, you will then have to apply for another title, designating your car a “Repairable Total Loss”. You can then register the vehicle again. Your insurance company may refuse to continue covering the car for collision after they have paid for a total loss.

How Much is Your Car Worth?

Insurance policies cover the “actual cash value” of your vehicle. In usual circumstances, this would mean the cost to replace the car, less depreciation. But in cars, depreciation is very subjective. For this reason, companies generally value vehicles through a combination of blue book lookups and “for sale” advertisements for cars matching the make, model, year and condition of your car.

Maintenance Records

Many people will tell you to send the adjuster maintenance records or receipts for those new tires you put on the car only last week. However, if you send in maintenance records that show the vehicle was well maintained, the insurance company will increase the salvage value of the car, thereby increasing the overall value. The problem with that is the insurance company will deduct that higher salvage value if you decide to keep the vehicle, leaving you with the same value you started with. If you let the insurance company take the car for salvage, then providing maintenance records is worthwhile.

How Companies Place a Value on Your Car

It is important to review all of the information regarding how the insurance company came to the total loss value of your car. Ask them for the paperwork that shows their calculations. Most insurance companies will use "CCC" or "ADP" to do a review of the market and come up with a fair value for your car. They may also use the NADA value, Kelly Blue Book, and internet resources.

Negotiating the Settlement

Do not automatically take the first offer the adjuster gives you and do not get angry if you think it is too low. The best way to deal with this is to do your own market research. You can do this easily by going online and checking various dealerships, want ads and used car sites. Get the book values online and print them out. If your used car search turns up at least three vehicles that match yours that are valued much higher than what the company offered, you can send printouts of your research to the insurance company. The adjuster will review the information and most likely come back to you with a more acceptable offer.

Ask About Added Expenses

When negotiating the settlement, make sure you ask about the registration fees you are losing because of the vehicle’s total loss. When you get a replacement vehicle, you will have to pay to title and register that car as well. You can ask the adjuster to repay you for the part of your registration period that went unused and for the cost of the new title.

Contact Your State Insurance Department if Needed

If you are unable to come to an agreement with the insurance company, and they are threatening to cut off your rental coverage, it is important you immediately contact your state’s Department of Insurance for help. They will steer you in the right direction and persuade both you and the insurance adjuster to compromise and come to a settlement.

Appraisal

If that does not work, you have the option of settling the matter through Appraisal. This involves each of you picking an independent appraiser to value the vehicle and see if the two can agree on a value. If not, a third independent appraiser will decide the final value. Both you and the insurance company must accept the decision. This process will usually cost you more in appraisal fees than the difference you are disputing with your insurance company. It is used more effectively when there is a value dispute with a classic or custom car.

Third-Party Law Suits

You insurance policy specifies that you cannot sue your insurance company over the value of your car. If someone else was at fault for the accident, and you are unable to agree with your own company on the value of your car, you could consider negotiating with the other person’s company. If the other company does not make a good offer, you can consider suing the other person for the value of your car. It is rare that this avenue will get you a better settlement. While the legal wrangling is going on, you are stuck without money to pay for a replacement car.

Be Nice

As long as you keep a cool head and do your research, you should be able to negotiate with your insurance company for a fair settlement. Remember, the adjuster is a regular person, just like you. Always treat your adjuster with politeness and respect and you will be likely to receive the same treatment in kind.