How to Negotiate a Total Loss Vehicle Insurance Settlement?

If you bought a car for $15,000 and after using it for five years, you get in a car accident, which totals your car. The actual cash value of the vehicle is around $7,000 to $8,000. But the auto insurance company might pay you as low as $4,000, stating that the car's condition was not good, or perhaps the market value is precisely that. This seems unfair, and it is not uncommon for things like these to happen. But the good news is that you do not have to settle for the settlement the auto insurance company or the insurance agents offer. Instead, there are ways you can negotiate the claim amount and get better compensation. Here's how to do it.

Published over a month ago
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Getting in a car accident is already traumatic, but you know what's worse? What's worse is seeing your car pancaked with no hope for the engine to start again. A totaled car is a big blow to you both emotionally and financially. But there is some hope in this somber situation. You can get reimbursed for the losses if you have a comprehensive coverage policy or collision damage waiver.

The only problem here is that you will not get the same money for the car you paid for when you bought it. Car insurance companies will pay you the actual cash value for your totaled vehicle. This actual cash value is the technical term for your car's current value, and no matter what the current value is, it will always be lower than what you paid for your vehicle. 

No matter which car insurance company you choose, the total loss of vehicle settlement will always seem a little low for you, and you might feel like you are getting swindled. So how to avoid it? This article will tell you everything you need to know about total loss vehicle settlement and how to negotiate with your auto insurance company to get better perks. 

Vehicle Depreciation and Actual Cash Value

Everything that is used daily will lose value with time. This is called depreciation, and cars are impacted by depreciation just like any other asset. A vehicle loses its value rapidly, and what your car was worth a year ago would be around half that now.

So think about it. If you bought a car for $15,000 and after using it for five years, you get in a car accident, which totals your car. The actual cash value of the vehicle is around $7,000 to $8,000. But the auto insurance company might pay you as low as $4,000, stating that the car's condition was not good, or perhaps the market value is precisely that. 

This seems unfair, and it is not uncommon for things like these to happen. But the good news is that you do not have to settle for the settlement the auto insurance company or the insurance agents offer. Instead, there are ways you can negotiate the claim amount and get better compensation. Here's how to do it. 

How to Negotiate for a Better Total Loss Settlement

Before you get into this, remember that the car insurance company would state the actual cash value of the car and the condition (along with mileage, etc.) to decide the claim amount. Therefore, your goal should be to counter this claim, i.e., tell them that your car is worth more than what they have estimated. 

But telling them is not enough. You need to have proof. This brings us to the next component; getting all the documents ready. 

Documents for Modification

While the current market value of your car might be low, this could be countered if you have made any modifications to the vehicle. This could include paint jobs, accessories, seat changes, better audio systems, engine modifications, etc. Anything that would add to the value of your car helps negotiate a better settlement. So get all the documents and bills you have to prove the higher than the 'normal' value of your car. 

Ask Insurance Company for Detailed Quote

Your car insurance company might tell you that with the current market analysis, they have to conclude that your car is worth this amount. But you do not have to accept this. Instead, you can ask your insurers to give you a detailed report of how they decided on the value of your car. 

This clears things up for you, and you can see the price they are giving for different car parts. In addition, it helps you counter their offer more precisely.

Put Forward Your Actual Cash Value

The auto insurance companies are not the only ones who can evaluate the value of your car. In addition, you can contact your local repair shops, used car sellers, and other people in the field of reselling or repairing cars and get a better idea of the current market value of your vehicle. 

Get a report from your side and present it to the car insurance company while negotiating the settlement money. This will be very impactful in pushing forward your price, and you'd have a better chance of getting a higher price for your totaled car. 

Hiring a Car Accident Lawyer

If you think there are not many ways you can negotiate with your car insurance company, the better thing to do would be to hire a car accident lawyer to help you create a strong argument and help you get better settlement rates. But do note that hiring a lawyer can be a little expensive, and while you may get a higher settlement price, you'll lose it all in lawyer charges. So it is better to hire a lawyer only when you do not have any other options.

Choosing the Right Policy

Negotiation can be done to get a better settlement price, but choosing the right car insurance company and a sufficient coverage limit is better. Before you buy any policy, make sure that you look at the cost of the policies they are offering, the reports about total loss settlement, and the claim processing time. 

For example, if you live in Georgia, look for the cheapest auto insurance quotes in Georgia and select the company with the lowest prices, best coverage options, and, most importantly, an excellent record of faster claim payouts. Making the right choice is essential for avoiding the hassle of claims.

Editorial Staff

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Please refer to our Terms of Use for any information regarding our disclosure principles.

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