What To Do If Insurance Is Not Paying Enough For A Totaled Car

When your vehicle is damaged in an accident, your insurance company will work with repair facilities to fix it. However, insurers will declare the car a total loss when the cost of repairs exceeds 75% of its current market value. If you have a new SUV, you may end up with a car that has been nearly rebuilt because of its high value. On the other hand, if you rely on an older car to commute to work, you may find yourself with a proposed payout that is insufficient as a down payment on a replacement.

You may be curious about how likely you are to find yourself in this situation. According to the Institute for Traffic Safety Management and Research, over 392,000 motor vehicle accidents were reported on New York roadways in 2021. Of those, more than 71% resulted in property damage. So, there’s a reasonable chance you will experience an accident that causes property damage at some point.

Being involved in a car accident is stressful enough without worrying about how much your insurance company will pay for damages. However, in the case of a serious accident where your car is considered a total loss, the amount you are offered may be significantly lower than expected.

Like many other drivers, you may wonder what to do when the figure you receive from the insurance company is not enough to replace your vehicle with a similar one. We’ll work to explain what steps you can take if you find yourself in that situation.

Order an Appraisal

The first step you should take in this situation is to order an appraisal. Some insurance policies have an appraisal clause that can resolve discrepancies between the initial offer and your car’s pre-accident value.

An appraised value is primarily based on the year, make and model of your vehicle, but it can be affected by other circumstances. For example, custom modifications can increase a car’s value. Additionally, antique and classic cars often have a cash value significantly higher than their original sticker price.

Be prepared to provide maintenance records that establish the vehicle’s history and a recent odometer reading. This can help show the vehicle’s pre-accident condition. In addition, if you have the original window sticker, check it to ensure all options are included in your appraisal.

Try To Negotiate With the Insurance Company

Armed with a written appraisal, you can begin negotiations with the insurance company. You have the most critical information needed to get a higher settlement or to remove your car from being considered a total loss: The current cash value of your vehicle as it was immediately before the crash.

You may still be able to negotiate without an appraisal. Start by going through the insurance adjuster’s written estimate. Point out any inaccuracies and provide the insurance company with copies of supporting documentation, such as maintenance records or the window sticker. If they don’t budge on the appraisal, you may need to try a different approach.

Appeal to Emotions

You may be surprised to discover that insurance companies aren’t all about numbers. Appealing to the emotional aspect of the crash and how the loss of your vehicle impacts daily life can help in some situations. You might also find success by providing photos of the accident, emphasizing its seriousness.

Prepare a Counteroffer

Instead of waiting for the adjuster to make a move, present a written counteroffer to his appraisal. Be realistic; you do not want to pull a figure out of thin air. Instead, use online tools to estimate the value of the car’s resale (not trade-in) value. Remember to account for any extra features or modifications to the vehicle that affect its value.

The sooner you start on a counteroffer, the more prepared you will be. That often means starting research immediately after an accident if you anticipate a total loss determination.

Present a Written Estimate for Repairs

New York uses a formula that allows for repairs above estimated costs. However, if the insurance estimates for repairs seem unusually low, getting a written estimate from a body shop may help better demonstrate the value of your car.

Get Your Settlement in Writing

It is good practice to document all communication between you and the insurance company or other entities involved in determining your car’s value. This is especially important for any settlement offers presented to you. Keeping communication in writing makes this easier. Use email or certified mail whenever possible to ensure you have proof of conversations and proposals.

Take the Case to Arbitration

New York auto insurance rules allow for arbitration in certain situations. Arbitration puts a fresh, unbiased set of eyes on the issue at hand: your car’s cash value. During this process, you will meet with an insurance company representative and a licensed arbitrator to attempt to find a mutually agreeable settlement. While it is not required, you may have an attorney present during this process.

File a Lawsuit

Negotiating with the insurance company should be your first step in trying to get a larger insurance settlement. However, it may not be successful, and you should be prepared for that outcome. You may need to take your case to court if you cannot negotiate a settlement.

Unless you are well-versed in litigation, this is an area for professionals. For that reason, hiring an attorney is advisable at this step, even if you handled negotiations independently.

When you use our law firm, you only pay if we win in court or obtain a favorable settlement. That means there are no upfront costs to worry about. Scheduling a free, no-obligation case evaluation is an excellent way to determine if filing a lawsuit is a viable option for you.

Buy Back Your Totaled Car

You may be able to buy your totaled car back from the insurance company. In a typical arrangement, you will keep the vehicle with a salvage title and complete any repairs yourself. This is a viable option for some car owners. For example, if you have an older car with a low cash value, even minimal repairs can cause it to be declared a total loss. You would not be able to replace that car with the insurance payout, so fixing it might be worthwhile.

There are some downsides to this arrangement. For example, the insurance payout is lowered by the estimated cost of repairs. Additionally, there may be limitations on what types of insurance you can purchase for the car after repairs are complete.

Secure Legal Counsel

You have several options to secure a more favorable settlement if your insurance company is not offering a high enough payout for your totaled vehicle. However, many of those can be challenging to navigate on your own. Therefore, speaking with an accident attorney early in the process is a good idea. He will help you evaluate your options and respond appropriately to the insurance company.

If you are involved in an auto accident, Cellino Law can help. Our firm has a long history of helping New York accident victims, stretching over 60 years. We offer a free, no-obligation case review to uncover your legal options. Contact us to find your local office and get the help you need to get a fair payout from your insurance company.



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