What Are Your Options If Your Car Is Totaled and the Insurance Offer Is Low?

Question from Ali, What Are Your Options If Your Car Is Totaled and the Insurance Offer Is Low?

Answer from AI:

When your car is deemed non-repairable and a total loss by your insurance company, and you believe the settlement offer is unfairly low, you have several options to consider. It’s important to understand that insurance companies typically base their total loss payouts on the actual cash value (ACV) of your vehicle, which is the market value of your car just before the accident, taking into account depreciation.

Review the Insurance Company’s Valuation

• Request a copy of the insurance company’s valuation report.
• Check the accuracy of the information, including the make, model, year, mileage, options, and condition of your car.
• Ensure that the comparables used to determine the ACV are truly comparable to your vehicle.

Conduct Your Own Research

• Look up the value of your car using reputable sources such as Kelley Blue Book or NADA Guides.
• Gather evidence of your car’s value, including maintenance records, recent upgrades, and receipts.
• Collect local ads for similar vehicles to show the current market price.

Negotiate with the Insurance Company

• Present your findings to the insurance adjuster and ask for a reconsideration of the offer.
• Be prepared to explain why you believe the offer is too low.
• Communicate in writing to create a record of your correspondence.

Use Appraisal Clause

• Check if your policy includes an appraisal clause, which allows you to hire an independent appraiser to determine the value of your car.
• The insurance company will also hire their own appraiser.
• If the appraisers cannot agree, an umpire is appointed to make a final decision.

Consider Small Claims Court

• If negotiations fail, you may file a lawsuit in small claims court for the amount you believe you are owed.
• Be aware of the monetary limits for small claims court in your jurisdiction.

Seek Legal Advice

• Consult with an attorney who specializes in insurance disputes for personalized advice.
• An attorney can help you understand your rights and may represent you in negotiations or legal proceedings.

File a Complaint

• If you believe the insurance company is acting in bad faith, you can file a complaint with your state’s insurance department.
• Visit the National Association of Insurance Commissioners to find contact information for your state’s insurance department.

Remember that each situation is unique, and the steps you take may vary based on the specifics of your case and the laws in your jurisdiction. It’s often beneficial to consult with a legal professional to ensure that your rights are protected and to assist you in getting a fair settlement.