Can you negotiate the insurance payout for a totaled car?

Q: Is negotiating with insurance adjuster total loss worth it?

Yes . Negotiating can get you a higher settlement amount for your vehicle and allow you to purchase a new car that meets your needs.

Do you have to accept an insurance offer on a totaled car?

No, you do not have to accept the insurance company's first total loss settlement offer.

“As a claimAn insurance claim is a request you make to your insurance company for coverage after your car is damaged or you have an accident. You can file a claim online, by phone, or in writing. adjuster and a doctor who has seen first-hand the insurance claim process for totaled vehicles, I can say that no, you don't have to accept the first offer that comes in for a totaled car. Remember, they need you to sign a release which states that you are in agreement with their offer,” says Alan Himmell, a public insurance adjuster with Allstar Adjusting in Florida.

If you’re offered a lower value than you expected, you can work with your claims adjuster to negotiate the total loss value. Written estimates can help bolster your argument to improve your chances of approval.

“Sometimes, I have noticed that the insurance company is spot-on with their offer,” Himmel says. “However, you never want to assume the offer is fair. You can do your own homework. The real trick to getting the highest number is simply going onto the marketplace by checking local dealerships and listings. This will tell you what it will cost you to actually purchase the vehicle with real-world accuracy. Collect this documentation, and this is what you will present to the claim adjuster. I have had several patients with totaled cars get more money, thousands more in fact, by doing this.”

Can you negotiate an insurance payout for a totaled car?

You can negotiate your insurance payout when your car is totaled; if you feel the offer is unfair, you don't have to accept it.

When an insurance company declares your vehicle a total loss, it means the cost of repairing your car exceeds its actual cash value (ACV) or a specific percentage of its ACV, as defined by state regulations or the insurance policy terms.

How to negotiate a total loss insurance settlement

Here's how to negotiate a total loss settlement, which we'll illustrate with the example of a policyholder we'll call Miriam.

Miriam's car was stolen, taken on a joyride and crashed. The insurance company tells her it's a total loss.

Here are the steps to take in a situation like this to negotiate the total loss settlement.

1. Understand your policy

Know the details of your insurance policy, including coverage limits and deductibles.

Miriam reviews her policy. She carries full coverage with a $500 comprehensive deductible. Her insurance will cover the car at its actual cash value.

2. Determine the actual cash value and review the adjuster's offer

The value of your car must first be assessed to determine compensation. Several factors are of consideration, including your vehicle’s make, model, body style, and mileage.

The adjuster will use your insurance company's proprietary method of calculating your vehicle's value as it stood prior to the incident. This may not match what you owe on the vehicle or what you believe it's worth. Research the value of your car prior to the accident. You can use online valuation tools to get an estimate.

The adjuster tells Miriam her car is worth $15,000. Miriam knows her car was in pristine condition with low miles and no scratches or dings. She spends some time researching and determines that the value of her car should be $18,000.

3. Gather documents.

Collect as many documents as possible, including your vehicle's service history, receipts for any upgrades or repairs, and evidence of your car's condition before the accident.

“In general, the best practice is to arm yourself with a wide base of information from a variety of sources as to value the vehicle prior to engaging in any negotiation,” says Sawan. “Additionally, the market for used car sales can sometimes lead to higher offers...Depending on how skillfully this is worked into the negotiation, it can often result in a much higher offer.”

Miriam has pictures of her car just before the accident. She knows what the odometer read because it recently had an oil change. She gathers this documentation as well as her research into the fair market value of cars like hers in similar excellent condition.

4. Prepare your counteroffer

If you believe the offer is too low, prepare a counteroffer supported by your research and documentation. Explain why you believe your vehicle is worth more than the offer.

Miriam uses all of her documentation to create a counteroffer of $18,000. She presents it to the insurance company along with all of her supporting documentation.

5. Get outside help if necessary

If you’re unsatisfied with negotiation efforts, you can hire a professional like a public adjuster or a lawyer. Public adjusters are state-licensed professionals who understand how the claims process works and can negotiate with your insurer for a better settlement amount.

Typically, public adjusters work on a contingency basis, charging a percentage of your settlement as payment. They work for you, not the insurance company. If negotiations are still unsatisfactory, you can also hire a lawyer who specializes in insurance issues. However, this could be costly, so determine if it's worthwhile.

Miriam's insurer offers her $17,500 after review, which she accepts. After her deductible she receives $17,000 for her car. Miriam could have continued to fight, but decides the offer is fair and hiring an attorney would be more costly.

If Miriam hadn't negotiated, she would have received $2,000 less for her car.

Take your time accepting the first offer, especially if it seems too low. Remember, insurance companies expect some level of negotiation in these situations, so don't hesitate to stand up for a fair value of your totaled car. However, handle the process with clear, documented evidence to support your case.

PEOPLE ASK

What documentation or proof can I use to fight a low offer?

You can provide examples of comparable vehicles, documentation of work you have had done on the car, and an appraisal if you have one to get a better offer for your car.

When do you need to negotiate a total loss settlement?

Your insurance policy is a contract between you and the insurance company. Your policy’s declaration page itemizes the specific damages and incidents covered under your policy as well as the limits of that coverage and deductibles you will need to pay.

When you file a claim, the representative from the insurance company will gather information about the incident and may decide the car is a total loss, which means it costs more to repair than it's worth. The adjuster will determine your vehicle's ACV and then make you an offer.

Sometimes, an insurer may offer far less than you expected, but there is still room for negotiation.

“Simply put, any insurance claim is a negotiation,” says Dennis E. Sawan, a personal injury and insurance lawyer at Sawan & Sawan in Ohio. “Some aspects of a claim may be a bit less negotiable. Also, often, insurance adjusters are not provided much flexibility by their company. However, in our view, it’s always worth trying so long as the request is well-supported and reasonable. As the saying goes, you don’t get what you don’t ask for.”

If you aren't happy with the settlement offered you have the right to negotiate and ask for more money.

How do insurance companies value totaled cars?

Insurance companies value totaled cars based on the actual cash valueActual Cash Value (ACV) is the current market value of your car, considering depreciation. It's the amount your insurance will pay if your car is totaled or stolen. of the vehicle just before the loss happened. It is based on the depreciated value of the car, and is affected by things like the car's condition and mileage.

The actual cash value is not the same as what you owe on the car loan or even the market value. Someone who really wants your car might be willing to pay more for it than it's worth, but that doesn't increase its actual cash value.

What happens if you don't agree with a total loss adjuster?

If you don't agree with a total loss adjuster's assessment or settlement offer regarding your property, you have several options.

Negotiate: Present evidence to negotiate for a higher settlement.
Independent appraisal: Use your insurance policy's appraisal clause to have an independent appraiser determine the value.
Mediation: Some insurance policies allow for mediation, where a neutral third party helps you and the insurer reach an agreement.
Hire an attorney: If the dispute cannot be resolved, hiring an attorney to represent your interests might be necessary.
Complaint: File a complaint with your state's insurance department. They can offer assistance or intervene on your behalf.

It's important to communicate effectively and keep detailed records throughout the process.

“It’s important to remember that you are never forced to take a settlement offer,” Sawan says. “If you feel as if an insurance company is treating you unfairly or unreasonably, it’s wise to speak to a lawyer as soon as possible. However, remember that time is of the essence as most legal claims are governed by strict time deadlines.”

PEOPLE ASK

Can I involve a lawyer or third-party appraiser?

You can involve outside help to negotiate your car's value, but you should be aware that you will not recoup the funds paid for that help. A lawyer is costly, and you may not get enough in the settlement to cover it.

How long does it take for insurance to pay out on a total loss?

How long it takes to pay out depends on the cause of the loss. If the car was totaled in an accident, you can expect a settlement fairly quickly. sometimes even within a week. If there are questions of fault or negotiations with another insurance company, it may take longer.

A stolen car that has not been recovered may also take a little longer. The insurance company will investigate the theft and may allow some time for the car to be found.

People ask

Can you get a second opinion on a total loss?

You can request to have the total loss reviewed, but your insurer will make the final decision.

What do you do if car insurance doesn’t pay enough for a loss?

As noted above, you can negotiate your settlement should negotiations fail and you feel you're not getting a fair market value for your car, there are further steps you can take.

There is an appeals process for car insurance claims that can include bringing in a third-party mediator to review both sides and determine which settlement amount is fair. If you're not sure of your rights, check with your state's insurance department. You may also want to consult with a lawyer.

Frequently asked questions

Can you get your own claims adjuster for total loss settlement negotiation?

Car insurance companies have teams of insurance adjusters that they use to assess vehicle damages. However, policyholders can hire an independent claims adjuster at their own expense to provide further proof and documentation for your claim. The insurance company's adjuster won't negotiate with anyone; you must hire someone with the right credentials.

Is negotiating with insurance adjuster total loss worth it?

Yes. Negotiating can get you a higher settlement amount for your vehicle and allow you to purchase a new car that meets your needs.

What does it mean when your car is a total loss?

A total loss means it would cost more to repair the car than it's worth. There are state laws that help determine what that amount is, and insurance companies may also have their own thresholds.

Can you keep your car if it’s a total loss?

Many insurance companies allow you to keep your vehicle even if it’s a total loss. The car's salvage value will be deducted from your settlement if you choose to keep it. State laws will also impact the ability to keep your car.

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