How to negotiate a total loss with a car insurance company

Negotiating a total loss with a car insurance company isn't uncommon.

When your car is completely totaled, your insurance adjuster will determine the amount of the settlement. Sometimes, insurance adjusters and policyholders disagree on the car's value.

When you don't agree with the settlement amount, you can negotiate with your adjuster to get a better insurance payout. Negotiating a totaled car settlement sounds intimidating, but there are clear steps to follow.

Below, we'll discuss when and how to negotiate an insurance settlement for a totaled car with your insurance company's adjuster.

How to negotiate your car's value after an accident

There are a few steps to take when negotiating a claim with an adjuster.

• Determine the vehicle's worth. 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.
• Get an estimate. A qualified mechanic or expert witness can provide an in-depth estimate that details all necessary repairs.
• Review the adjuster's offer. While some claim settlements may be sufficient, others may require some negotiation. Carefully look over the details of your claim and consider how compensation is related to your vehicle’s value and damage.
• Get legal help if necessary. If you’re unsatisfied with negotiation efforts, you can hire an attorney as a last resort. Armed with experience and skill, your attorney can help you fight for the settlement amount you think you should have.
• Get everything in writing. When you and your claims adjuster agree on a settlement, be sure to spell out these terms in writing to validate the agreement. It ensures that everyone understands their financial obligations and is on the same page with expectations.

“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. For example, in 2021 alone, used car prices were estimated to have surged nearly 48%. Depending on how skillfully this is worked into the negotiation, it can often result in a much higher offer.”

While the process may differ slightly based on claim value, your local insurance agent can work with you to provide support and receive the settlement to which you feel entitled.

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 decide on the amount it's worth and then offer you that amount.

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. “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 you get the most money from insurance for a totaled car?

You need to provide specific details to counter your insurance company’s offer and prove that the car is worth more than the adjuster believes.

You can prepare a counteroffer that shows proof of your vehicle’s value and includes receipts or estimates for any recent work done on your vehicle within the last few months.

“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.”

Should you accept the first offer from a car insurance company?

You don’t have to take the first offer you receive, says Dr. Alan Himmell of Florida’s Allstar Adjusting.

“As a claim 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,” Himmell says.

If you’re offered a lower value than you expected, you can work with your claims adjuster directly 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,” shares Dr. Himmel. “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.”

Once you accept an auto insurer claim settlement, it typically takes about 30 days to get the check.

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: Negotiating total loss settlements

What are betterment charges, and how do you counter them?

When repairs require newer, more expensive parts, insurance companies help cover the cost through a betterment charge. It’s like your contribution to repair costs that could very likely increase your vehicle’s value.

You can request the insurance adjuster waive the betterment charge. There’s no guarantee that the insurance company will remove the betterment charge, but you can ask for specifics and see if it can be waived.

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.

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.