What’s My Total Loss Worth ? Figuring Total Loss Car Value For Your Insurance Claim
How Much Will The Insurance Company Pay You For Your Total Loss? What Is The Real Value?
So the insurance adjuster has told you that your vehicle is a total loss, huh? How much are they going to pay you? As a licensed insurance adjuster and the owner of a company that certifies vehicle values, I should be able to shed some light on this subject for you. Let’s get right to it. The actual cash value of your vehicle is generally defined as the value a private purchaser would pay for a similar vehicle, if the purchaser is under no pressure to purchase, and the seller is under no pressure to sell. Even adjusters get confused about this subject. A retail vehicle price is different than a private vehicle price because of the factors incorporated into it. The retail price will always be greater than the actual cash value. Dealers have to advertise, make a profit, pay sales people, inspect vehicles for safety concerns, and they have to maintain a staff that can assist purchasers with obtaining credit and filling out paperwork. All of these costs are incorporated into a vehicle’s sales price when it is sitting on a dealers lot. Your vehicle is not a retail vehicle, and will not command the same price as a vehicle that is sitting on a dealer’s lot ready to sell. The law normally does not require the insurance company to pay you for the retail value of your vehicle (if you’re not sure, call us and we will tell you where to find your State’s information for free).
Many insurance companies use a third party vendor to provide reports that reflect a vehicle’s market value. The most prominent ones are CCC (Valuescope), and ADP Autosource. These reports generally do not depict actual sales data, rather they depict asking prices (one can ask whatever they want, but the sale price is what is important). Additionally, the vehicle specifications reflected in these reports totally rely on human input. If the adjuster / report requestor doesn’t enter correct information, or if they enter nothing at all, then default values are generated, and the final report value will not be reflective of the actual vehicle that is being evaluated. Watch these reports for inaccuracies. If everything is entered correctly, the best argument against a report from CCC or ADP is to review the “comparable” vehicles and point out where and why the comparable vehicles aren’t actually comparable.
The national publications that can be used include NADA, Edmunds, and Kelley Blue Book. There are more, but these are the main publications that are generally used. If you run the same vehicle with each one, you will come up with different figures. My suggestion is to average the three and use that value because then your value is supported by all three publications.
The real data one can use consists of online vehicle auction sites or actual sales receipts from individuals. AutoTrader.com, and Cars.com will allow you to search for comparable vehicles in your area. The easiest way to use these sources is to do an advanced search and make sure you average only the really comparable ones. It can get complicated, but it’s normally worth the effort. Once you have researched the value of your vehicle using national publications and real data, and picked apart any market evaluation done by a computer, then you should be ready to negotiate by using the average price you have calculated using the data you have. Be willing to accept a little less than you have calculated, but be professional and persistent in your negotiation.
Always negotiate in writing.
Send a demand letter to the insurance adjuster asking for a specific amount (the amount you calculated), and give them a time limit to respond to you. After you have sent the demand, follow up by telephone every couple of days. If the insurance adjuster or carrier refuses to negotiate, then you must either work your way up the chain of command, or begin doing your research for filing a small claims suit in your State. Proper negotiation and a willingness to accept a little less than you consider to be fair will keep you from spending extra money filing suit and arguing your case in front of a judge or jury. If you can get to within $800 of the average price calculated using publications and real data, I would suggest you settle and move on with your life! Good luck with your total loss negotiation. You can do it! Sometimes it’s just in the petty details!