How to Contest an Auto Insurance Claim Payout That Isn’t Enough

What is a Total Loss Claim?

A total loss claim is a type of automobile insurance claim in which the cost of repairs and supplemental claims equal or exceed 75% of the fair market value of a vehicle, making it uneconomical to repair. In such cases, the auto insurance company is required to pay fair market value for the vehicle and not the payoff amount. To determine fair market value, the vehicle insurance adjuster typically uses the National Automobile Dealers Association (NADA) information, or a local market survey using quotes from at least two qualified dealers within the local market area. If the vehicle was in better-than-average condition prior to the collision, the adjuster is required to give due consideration to this fact when determining value.

Why Should You Contest an Auto Insurance Total Loss Claim?

1. If the value of damaged property is less than the insurance payout.

If you believe your car is a total loss, you may want to contest the car insurance company’s offer in order to receive full compensation for your vehicle. The law states that if the cost of repairs plus supplemental claims equals or exceeds 75% of the fair market value of the vehicle, the vehicle is legally considered a total loss. This means that the insurer must pay fair market value for the vehicle. To ensure that you receive fair market value for your car, it is important to get multiple estimates for the amount of repairs needed and use local market surveys to determine fair market value. Additionally, you may want to pursue a diminished value claim to increase your chances of getting a fair settlement. Ultimately, if you feel that you are not getting a fair settlement, you can contest the insurance company’s offer to ensure that you receive full compensation for your vehicle.

2. If the insurance company is not providing adequate coverage

When contesting an auto insurance total loss claim, you should consider the following:

1. Whether the accident was avoidable and whether the driver was unlicensed.
2. Trying the steps suggested by the insurer, such as negotiating and making a complaint.
3. Whether the driver has enough insurance to cover accident injuries.
4. Whether you have underinsured motorist coverage.
5. Whether you have underestimated the total value of your claim or put an unrealistic value on it.
6. Whether you have a new for old policy or the item is old.
7. Whether there is a limit in your policy on the amount the insurer will pay for any one item.
8. Whether you have to pay an excess.
9. Whether you have deliberately or carelessly withheld information or misled your insurers when you took out, renewed or changed your policy.
10. Whether you can negotiate with your insurer and reach an agreement.
11. Whether the insurance company has violated their obligations to you as outlined in the contract or have broken any laws.
12. Whether you have plenty of evidence indicating that the insurance company has denied your claim in bad faith.

3. If the insurance company is not giving a fair estimate of the cost of the repairs

When evaluating an auto insurance company’s estimate of the cost of repairs for a total loss claim, it is important to compare and contrast the actual cost of repairs with the estimate that the insurance company has provided. To do this, you should get several independent estimates for the cost of repairs and provide these to the insurance adjuster. If you don’t agree with the offer and the adjuster has never seen the damaged vehicle, then you can require the adjuster or the insurance company’s appraiser to personally inspect your damaged vehicle. Additionally, you should consider the pre-accident cash value of the vehicle, as insurance companies may offer to repair a vehicle if the cost of repairs plus supplemental claims equals less than 75% of the vehicle’s pre-accident cash value. If you believe that your car cannot be adequately repaired, there is typically some room to negotiate, as the amount is tied directly to fair market value. If you are still not satisfied, you can file a complaint with your state’s insurance commissioner, or consider mediation if it is available in your state.

4. If the insurance company is not taking into account the depreciation of the vehicle

Contesting an auto insurance total loss claim can help you take into account the depreciation of the vehicle by providing evidence that the insurance company’s estimate of your car’s value is too low. This can be done by getting multiple estimates from highly-regarded repair shops for the amount of repairs your vehicle will need, and then providing them to the insurance company. If the insurance adjuster has never seen the damaged vehicle, you can require them to personally inspect the vehicle. You can also pursue a diminished value claim if you don’t agree with the offer. Doing this will allow you to negotiate a higher value for the vehicle and have the insurance company pay the repair shop you’ve chosen directly.

5. If the insurance company is not considering the additional costs of a collision, such as towing fees

A collision typically results in additional costs beyond the repair of the vehicle itself. These may include rental car expenses, towing and storage fees, or even the cost of a replacement vehicle if yours is totaled. It is important to contest a total loss claim if you feel you are not receiving a fair offer from your insurance company. The insurance company may be trying to low-ball you with an offer that doesn’t fully cover your losses, and they may be betting that you will be satisfied with a smaller payout and won’t take the time to get multiple estimates or shop around for comparable cars. Don’t let them get away with it – take the time to negotiate fairly and make sure you are getting the best deal you can for your car. Also be aware of your policy’s process for resolving a disagreement if you and the insurance company can’t agree on what is reasonable.

6. If the insurance company is not considering any other insurance coverage that the policyholder may have

When evaluating an auto insurance total loss claim, it is important to compare and contrast the details of the policy with the facts of the accident and the losses incurred. You should look for whether the policy was in force at the time of the accident and check for any conditions, exclusions or requirements which may have been violated. Additionally, it is important to make sure that the driver of the vehicle was named on the underlying insurance policy so that the claim is not denied due to an unlicensed driver operating the vehicle. If the driver does not have enough insurance to cover accident injuries they cause to others, this could lead to a denial of the claim. Finally, it is important to make sure you have provided all the relevant information needed for the claim, be aware of any changes in your circumstances, and not to exaggerate or overvalue the claim.

7. If the insurance company is not working with the policyholder to come to a fair agreement.

If the insurance company is not working with you to come to a fair agreement for a total loss claim, there are a few steps you can take.

1. File a complaint with your state’s department of insurance. Having the state insurance department on your side may give you some leverage in negotiations, and they may be able to help resolve the dispute.
2. Consider mediation. Hiring an unbiased professional to help you and an insurance company representative reach an agreement is a nonbinding option that could be beneficial.
3. Consider a bad faith insurance lawsuit. If you believe that the insurance company has violated their obligations to you as outlined in the contract or have broken any laws, you can file a bad faith insurance lawsuit. Make sure to have plenty of evidence to support your case.
4. Be patient and stay calm. Insurance companies may not be in a hurry to pay you, and they may ask for some documentation or evidence that they should already have. Don’t give in to any pressure to settle for less than you deserve.

How to Contest an Auto Insurance Total Loss Claim

Step 1: Understand the claim payout situation

The claim payout situation is an important aspect to consider when filing an insurance claim. When an auto insurance claim is filed, an insurance company will typically assess the damages and offer a settlement amount they deem to be fair. This amount may not always match what the claimant considers to be fair, or what is needed to cover damages. In this situation, the claimant may attempt to negotiate a higher settlement by researching their policy, preparing arguments for their case and seeking help from an attorney.

The claimant should also be sure to review their policy to see what is covered and what the dollar limits are. If the cause of the damage is not covered, then their claim may be denied. If their claim is denied, the insurer will generally send a letter explaining why, citing the applicable part of the policy.

If the settlement offer is not enough, the claimant can try to negotiate a higher settlement. To do this, they may need to seek help from an attorney during a deposition. This is when the insurance firm interviews the claimant to get details about the accident and the value of their possessions. Knowing their rights in the case of a dispute is also important and should be detailed in the policy or discussed with their agent, insurance provider or state regulator. Ultimately, filing a lawsuit may be their last resort if they can’t reach an agreement, though this can be time-consuming and expensive.

Step 2: Negotiate a fair market value settlement

If you are looking to negotiate a fair market value settlement for an auto insurance total loss claim, there are a few steps you can take to ensure a successful negotiation. First, you should familiarize yourself with the fair market value of your car or its repairs. This can be done by researching online tools or visiting a qualified mechanic for an estimate. It is also important to document everything throughout the process and ask for documents in return.

Once you have the information and documents you need, you can start negotiating with the insurance company. You should have a desired settlement amount in mind, as well as a minimum amount you will accept. During negotiations, you can use the National Automobile Dealers Association (NADA) publication, the “Official Used Car Guide,” to determine the fair market value of your vehicle. You can also make adjustments based on the actual condition and mileage of your vehicle, and any regional price differences.

If the insurance company’s offer is inadequate, you can decline it and ask for a better offer without filing a lawsuit. Consider forming a counter-argument and make sure you get the final decision in writing. Lastly, if the insurance company refuses to be fair or realistic in their offers, you may consider filing suit in a civil court.

Step 3: Negotiate local market prices

Negotiating local market prices for an auto insurance total loss claim can be a difficult process, but there are steps you can take to ensure the best possible outcome. Here’s how to go about it:

1. Do your own research. Look up prices of cars similar to yours in your local market. Consider things like mileage, options, and other factors that might affect the value of your car.
2. Ask for a copy of the Certified Collateral Corporation (CCC) report. This is an itemized list of your vehicle’s features that an adjuster uses to help determine the market value of your car. Make sure the report includes all of your vehicle’s features and trim level.
3. Get a written estimate from a professional body shop. This can help show your adjuster that your vehicle is worth more than the appraisal.
4. Utilize online tools. Take advantage of online tools to get a ballpark value of your vehicle and print out the results.
5. Find comparable vehicles. Location can have an impact on a vehicle’s value. Find cars for sale in your zip code that match your year, make and model and bring these listings to the negotiation.
6. Have a desired settlement and a minimum settlement in mind. Your high and low numbers should reflect the estimates you researched.
7. Ask the adjuster to explain their justification for their offer. After considering their argument, you can form a counter-argument.
8. Keep a level head and objectively weigh the strengths and weaknesses of the offer.
9. Document everything and get the final decision in writing.
10. If the adjuster’s initial offer is far below the estimates you gathered, you can decline it and ask for a better offer.

By following these steps, you can arm yourself with the knowledge and evidence you need to successfully negotiate local market prices for an auto insurance total loss claim.

Step 4: Calculate your potential savings with an upgrade plan

An upgrade plan can help you save money with a total loss claim in a few ways. First, it’s a good idea to do your own research into the pricing of cars similar to yours in your local market. You may be able to find examples that the insurance company did not consider, giving you more leverage to argue for a higher price. Additionally, it’s important to shop around for better rates before your policy renewal. Comparing quotes from trusted providers may help you save on auto insurance. Finally, it’s important to review your insurance policy for any coverage upgrades that may help to cover more of the cost of a total loss claim.

Step 5: Embrace the digital life

Embracing the digital life can help with a contested auto insurance total loss claim in many ways. For starters, it can significantly speed up the claim process by providing immediate access to important documents and information. Additionally, digital resources make it easier to store and share documents securely, making it simpler for all parties involved to track the progress of the claim. Finally, digital resources also provide increased transparency, which can help to reduce the chances of fraud and other unethical behavior. All in all, by utilizing digital tools and resources, claimants can ensure a fair and efficient process for resolving their contested auto insurance total loss claim.

Step 6: Monitor your policy renewal costs

Monitoring policy renewal costs can help with a contested auto insurance total loss claim by ensuring that you are getting the best possible rate before your policy renewal date. Shopping around for a better rate and paying attention to your premium can help you ensure that you won’t be overpaying for your policy. Knowing the exact amount of your premium can also help you determine if your insurer is refusing to pay your claim in full. Having detailed information on your policy’s coverage and car’s value can help strengthen your case and ensure you get the right compensation.

Step 7: Stay connected with your insurer

Staying connected with your insurer after contesting an auto insurance total loss claim can be a difficult process, but there are a few steps you can take to help ensure a successful outcome.

First, document everything your insurer and/or claims adjuster tells you. Keep a log of dates, whom you spoke to, and what was said. If you get information by phone or in person, send a follow-up email confirming what you heard.

Second, you may want to reach a settlement with the insurer and confirm the terms in writing. This helps ensure that everyone agrees on the settlement amount and protects both parties by attesting that the insurance company agrees to pay a certain amount and that you agree to that amount.

Third, gather evidence to back up your case. Prepare documents such as damage reports from independent experts, estimates from contractors, photos, and other documentation to demonstrate the scope of the damage.

Fourth, explain your case in writing to the insurance company and include the supporting evidence.

Finally, if you need help with your case, United Policyholder’s claim guidance library includes examples of forms and requests related to claims. It also has sample proof-of-loss documents that can help.

It’s important to remember to keep making your loan/lease payments until you receive your settlement check. If you stop making payments while waiting to receive the gap insurance claim settlement, the lender can report it to the credit bureaus, which could negatively affect your credit.

By following these steps, you can help ensure that your auto insurance total loss claim is resolved in your favor.

Step 8: Get tips on making the best use of technology

When contesting an auto insurance total loss claim, technology can be used to your advantage in a few ways. First, take pictures of the accident scene with your cell phone. Include shots of any damage to your car and the other vehicles involved, license plates, road conditions like ice, rain or snow, nearby intersections and road signs, and other drivers’ insurance ID cards. It’s also good to note the names and phone numbers of any witnesses. Second, keep records of the contents in your home and any more expensive assets, such as receipts and video recordings of your possessions in a safe place outside your home. Finally, keep a detailed record of whom you talked to, when, and what was discussed when disputing a claim with an insurance firm. This can help your case immensely if they are being uncooperative or elusive.

Step 9: Set up a budget and track expenses

Bonus

Setting up a budget can help immensely when contesting an auto insurance total loss claim. Keeping detailed records of your possessions and expenses before and after an accident, along with receipts and estimates from independent contractors, can provide much-needed evidence to support your case. Additionally, a budget will help ensure that you have the financial resources to hire legal representation, if necessary, in order to help you navigate the claims process. A budget will provide greater clarity and peace of mind, as it will help you manage any additional living expenses you may incur while your vehicle is being repaired or replaced, and will help you avoid any financial strain that can be caused by disputing a claim.

Step 10: Consider credit score when getting a mortgage

Having a good credit score is an important factor when applying for a mortgage after an auto insurance total loss claim. Your credit score provides insight into how you manage your finances, and lenders will use this information to decide how much of a risk you pose and how likely you are to pay back the loan. With that in mind, here are the steps you should take to use your credit score to help get a mortgage:

1. Check Your Credit Score: First, you should check your credit score to make sure it is in good standing. This can be done through a credit reporting agency or by checking with your bank or lender.
2. Pay Down Debt: If your credit score is not where you’d like it to be, take steps to pay down any outstanding debt. This includes making consistent payments to creditors and reducing the amount of debt you have.
3. Shop Around for the Best Interest Rates: Once you have a good credit score, shop around for the best interest rates. Compare offers from different lenders and look for one that will give you the lowest rate.
4. Gather Necessary Documents: Make sure you have all the necessary documents ready for the mortgage application process. These include proof of income, tax returns, bank statements, and a list of assets.
5. Submit the Application: When you have all the documents ready, submit the mortgage application. Be sure to read through the terms and conditions carefully and ask any questions you have.

By following these steps, you can use your credit score to help get a mortgage after an auto insurance total loss claim. This will ensure that you get the best interest rate and terms possible, making the loan more affordable and manageable.

How Much is a Totaled Car Worth?

The worth of a totaled car depends on a variety of factors, such as the year, make, model, and condition of the vehicle, any upgrades to the body style, the number of miles on the car, and its physical condition. Insurance companies will typically declare a car totaled when the cost of repairs exceeds its actual cash value, which is determined by the estimated price it would fetch in a sale based on its mileage and pre-accident condition, the price of similar cars in the area, and other factors. In some states, a car is deemed a total loss when the cost of repairs exceeds a designated percentage, such as 80%, of its fair market value. If the other party’s insurance applies the policy’s collision or comprehensive coverage to the claim, the deductible will be subtracted from the settlement. Insurance companies may also declare a vehicle a total loss even if the repair costs are less than the designated total-loss threshold.