5 Tips to negotiate the best settlement for my totaled car


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Written by
VP, People & Compliance
Reviewed by
Licensed Auto Insurance Agent
UPDATED: 2021-03-01T20:03:42.862Z
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A totaled car on the side of the highway.

Having gone through two car accident negotiations with the auto insurance company within four months of each other due to two totaled car accidents (neither of which were our fault), it’s apparent that understanding how to negotiate the best settlement for a totaled car was important to obtain the best deal on a totaled vehicle.

Many claimants accept the car insurance company's first offer, without reviewing the details of the offer. For example, you may remember to tell the insurance claims adjuster the vehicle had a DVD player, but did you tell him/her that it was a split-screen DVD player? You may not realize it, but these types of added items may increase the settlement amount. If you do not have an agent, or if your agent is not particularly helpful, being armed with the best negotiation tactics could result in a higher settlement for you. But first, get yourself familiar with the claims process.

Here are five tips on how to negotiate the best loss settlements for your totaled car.

1. Know what you are selling to your car insurance company.

If your insurance company deems your vehicle totaled, then according to certain policies, your insurer may need to buy your totaled car from you at a reasonable price based on the value of your car immediately preceding the accident.

Once the adjuster deems your car totaled, it is in your best interest to provide the adjuster with the sticker details that accompanied your car when you purchased it. If the cost of repair for your vehicle exceeds a certain percentage of the car's value before the accident, insurance companies will declare it a "total loss." Some car insurance companies will total a vehicle if the damage to vehicle is at or above 51% of its pre-accident value. Other insurance companies will total it at 80%. A vehicle is considered a wrecked vehicle when it's so disabled that can’t operate without substantial repair or reconstruction.

Didn’t save the sticker? Contact the dealer where you purchased 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, then search online for your vehicle's year, make and model to determine exactly what features your vehicle had. Be sure to provide this information to the adjuster so that the adjuster may make the highest possible initial offer at the outset.

2. Prepare your counter offer.

After providing the adjuster with your vehicle's features, prepare your counter offer. Avoid waiting until you have the adjuster's offer to start your research.

With the sticker or list of the vehicle’s features, one option is to visit nadaguides.com. Enter the information of your vehicle to determine the value of your car. Remember, the important amount is the retail value, not the trade-in value. You are not trading in your car; you are selling your car to the insurance company. Print the estimated retail amount and features used to determine the amount, as you will need to show this to the adjuster when you make the counter offer.

Also, find any receipts for any major work performed on your vehicle in the last seven or eight months, such as new tires. If you don't have the receipts, contact the mechanic and ask them to provide you with the receipt.

3. Determine the comparables (comps) in the area.

Visit a few used car websites and print those that are for sale with similar features and mileage as yours. Some sites to visit include autotrader.com and cargurus.com.

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4. Obtain a written settlement offer from the auto insurance company.

Once the adjuster contacts you with an offer, ask them to email it to you with the valuation report or CCC report (Certified Collateral Corporation report). Many insurance companies rely on this report to provide a market evaluation showing the value of the car and ultimately use it to determine the settlement amount. Confirm that all of your vehicle's features are considered on this report and that the report correctly lists the mileage. Upon receiving the written offer, ask the adjuster to show three additional items:

A. Sales tax   they are responsible to payout the state sales tax B.Payoff lien amount   the amount to be paid directly to the auto financing company for any outstanding vehicle loans C. Net settlement amount — the amount that you will receive from the company.

5. Make your counter offer for your totaled car.

Compare your written offer with NadaGuides.com (or similar website) and used car printouts you previously researched. Do they match up? Based on the these figures, determine a reasonable counter offer. Email the adjuster your counter offer and attach all documentation that you based your counter offer on, including the NadaGuides.com value, used cars reports, and recent repair costs. Without supporting documentation, your offer is less credible.

Proper research, documentation, and setting reasonable expectations should result in a fair settlement. If you believe you are not receiving a reasonable offer after negotiation attempts, contact your agent for guidance or certain states' office of consumer affairs may provide additional advice.

If the insurer totals your car, they will payout the car's actual cash value, minus your deductible. Your car will then sent to a salvage yard for an auction by the highest bidder and usually whacked up for parts. Insurance companies keep the money they got for the salvage vehicle.

But what can you do if you want to keep the car because you don't agree with the insurance company's assessment of the damages? Options for keeping a totaled car are limited. When you buy a car insurance policy, you sign a contract that says that you can't make your insurer payout more than your car is worth. In contrast, most states require insurance companies to follow the guidelines so you will be restored to the same financial condition you were in prior to the accident.If you still can't come to an agreement on value, you can contact a consumer representative at your state's insurance departments.

Bear in mind that you might not be able to buy collision coverage and comprehensive coverage on a rebuilt-title car. But if the insurance check for your totaled vehicle is less than what you owe, you can save yourself and buy gap coverage when you buy a new car.

After a car accident, it's common for your car insurance rates to increase. It may be a good time to shop around for a new car insurance company. Our research shows that customers save an average of $390 annually when switching auto insurers.

If you're in the market for a new car insurance company, see who other drivers rate as the best car insurance companies.

Summary: How to negotiate the best settlement for your totaled car

  1. Know what you are selling to your car insurance company.
  2. Prepare your counter offer.
  3. Determine the comparables (comps) in the area.
  4. Obtain a written settlement offer from the auto insurance company.
  5. Make your counter offer for your totaled car.

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