How To Negotiate With Car Insurance Adjusters About Car Total Loss

Auto accidents can be frustrating and traumatic experiences under the best of circumstances. The stress level only goes up when the insurance company decides to settle your claim as a total loss. It is important to know how to negotiate with the claims adjuster to ensure that you get the full value of your vehicle.

When Is a Damaged Car a Total Loss?

State law and insurance company policies determine when a damaged vehicle is a total loss. Most insurance companies settle physical damage claims as a total loss if the cost to repair a vehicle plus its salvage value is greater than or equal to the total loss threshold. The total loss threshold varies by state. In New York, it is 75% of the car’s actual cash value.

Actual Cash Value

Actual cash value is the cost of your car minus depreciation. The insurance company calculates depreciation based on the mileage of your vehicle. Depreciation ranges from $0.15 per mile to $0.53 per mile, depending on the purchase price of the car.

Salvage Value

Salvage value is the amount of money you or your insurance company could sell your car for without repairing it. You can ask the insurance company to provide you with the name and address of the certified salvage dealer that will purchase your vehicle for the insurance company’s stated salvage value.

How Much Money Does the Insurance Company Have To Offer for a Total Loss?

New York insurance law specifies how insurance companies must settle total loss claims. The insurance company must make a minimum offer based on one of five methods.

1. Average Retail Value

For this method, the insurance company must average the values of a substantially similar vehicle listed in two valuation manuals approved by the New York Department of Insurance. These values usually come from The Redbook and The N.A.D.A. Official Used Car Guide.

However, insurance companies may ask the department to approve other manuals when those manuals do not have useful values. The insurance company may deduct up to $100 from the average value for dealer preparation charges.

2. Price Quote for a Substantially Similar Vehicle

In this method, the insurance company obtains a price quote for a substantially similar vehicle from a qualified dealer located within 25 miles of where the vehicle owner will garage the replacement vehicle. The vehicle must be for sale for at least three days after you receive notice from the insurance company and you have to be able to purchase that vehicle from the dealer for the insurance company’s cash offer less applicable deductions for the offer to be valid. In other words, it cannot be a theoretical price on a vehicle the dealer does not have for sale or a price the dealer is not willing to sell the vehicle to you for.

3. Quotation From a Computerized Database

One of the most common methods insurance companies use is to get a quotation from a database that the superintendent approved as representing the fair market value of a substantially similar vehicle. These databases compile and average the market values of similar vehicles for sale in your local area.

4. Purchase Price Plus Improvements

If you purchased the damaged vehicle within 180 days of the date of loss and the above three valuation methods would result in an offer that is more than what you paid for your car, the insurance company can offer you the purchase price plus any improvements you made to the car that you can prove the value of. This does not apply if you received the car as a gift or bought it in a private sale.

5. Best Available Method

If the insurance company is unable to value your car by any of the above methods, it may use what it decides is the best available method. However, the insurance company must explain to you how it determined your vehicle’s value. If you own a vehicle that is not commonly sold in your area, such as an antique or high-end luxury vehicle, the insurance company may not be able to determine a fair market value without going outside your local area or using other valuation methods.

What Is a Substantially Similar Vehicle?

A substantially similar vehicle is of the same model, make, condition and year as your damaged vehicle. It must also include the same major options, for example, if your car has a sunroof, a similar vehicle should also have a sunroof. The mileage of a similar vehicle should not exceed the mileage of your damaged car by 4,000 miles or 10% of your car’s mileage on the date of loss.

What If You Cannot Buy a Substantially Similar Vehicle for Your Settlement Amount?

If you cannot find a substantially similar vehicle for sale in your area that you can purchase with the settlement offer from the insurance company, you have 35 days from the date the insurance company mailed your settlement check to notify the insurer in writing. The insurer then has three options:

  1. Offer a higher settlement that is enough to cover the purchase of a substantially similar vehicle.
  2. Pay the claimant the difference between the claim payment and the cost of a substantially similar vehicle that the claimant has located for sale.
  3. If the claimant consents, purchase a substantially similar vehicle for the claimant.

However, if the insurance company provided the claimant written notification of a substantially similar vehicle that was available for sale and the claimant decided not to purchase that vehicle, the insurance company does not have to pay any additional amount.

What Can You Do If You Disagree With the Settlement Offer?

Ask the insurance company to send you a written explanation of how it determined the value of your claim. Review the documentation to ensure the adjuster accounted for the correct features, trim, mileage, year, make, model and condition of your damaged vehicle.

Look up the value of your vehicle in the N.A.D.A. and Redbook guides. Make sure you input the information about your vehicle correctly and print out your result. Visit several used car websites for local dealers and print out the sales prices of comparable vehicles.

Gather your original purchase invoice, receipts for any aftermarket parts you added and maintenance and repair records for the past year. These may help you if the insurance company did not include all of the features of your car in its valuation or if you disagree with the adjuster about the condition of your vehicle. If the value of your vehicle based on your research is higher than the insurance company’s offer, send the adjuster a written counteroffer and include documentation that substantiates the value you are asking for.

If you provide documentation, most insurance companies will make a new offer. If your counteroffer is relatively close to the insurance company’s offer, the adjuster may offer you a value somewhere in the middle of the two. Alternatively, the insurance company may use your documentation to calculate a new value and make a revised settlement offer.

What If the Insurance Company Will Not Negotiate?

If the insurance company refuses to change its offer or you cannot reach an agreement on a settlement, you may need to file a lawsuit. The team at Cellino Law can either negotiate with the insurance company on your behalf or help you prove your case in court. Contact us today to schedule a free consultation.



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  • Joe and I just wanted to send you this note thanking you for the professional way you handled our lawsuit. Your kindness was extremely appreciated in a very difficult time. When we found out the people that caused the accident had no insurance, we thought our chances of receiving any settlement was nonexistent. Once we met with you and released you were able to help us our minds were put at ease. Your aggressive manner of handling the case exceeded our expectations. Please feel free to use us as a reference. Thank you so much and best wishes,

    Danielle and Joe

  • My wife and I would like to take this opportunity to thank you for a fantastic job as our attorney. We could not have been more pleased with the work you and your team has done on this case. This past four years or so has been such a roller coaster for our family. We are very pleased and grateful with the result. We have made a good choice by choosing you. Thank you.


  • My experience during the time of negotiations was extremely positive. Josh Sandberg handled my lawsuit with the utmost integrity. He returned all my phone calls in a timely manner and answered all my questions. Josh made things less stressful. I would highly recommend Josh and the entire staff at Cellino Law.


  • Thank you for your efforts on my behalf. I am very pleased (and surprised) at the amount of the settlement. We will use the funds to help pay down the debt on the truck we had to purchase after ours was totaled. Thank you again.