Last Updated On: September 20, 2016

Car Insurance Total Loss Settlement

total car lossWhat To Do and How To Replace The Car Fast.

No one plans for a total loss car accident and after the initial shock wears off you find yourself without a replacement vehicle or transportation to work.

People can be left without a saved down payment after an insurance company totals their car and the insurance claim payoff will not replace the car they lost. You may also be accumulating extra expenses you were not prepared for.

So what is the next step?

Total loss accidents can look different from one case to the next depending on the value of the vehicle, the type of auto insurance coverage that will be paying for the totaled car and the amount of damage done as well as personal injury.

Tips to help you get a fast and accurate insurance settlement.

  • Leave your contact information with the insurance agent and ask when you will hear from them.
  • Allow the auto insurance company to choose the body repair shop.
  • Remove the license tag and your personal items from the car. Write down the mileage.
  • If you own the car, have the title available.
  • Research the value of your car. Don’t just trust the word of the insurance agent.
  • Provide receipts for and major repairs or added options.
  • Keep up your auto loan payments during the loss settlement.
  • Send requested documents by fax.

We will explain these and many more “how to tips for a quick and  accurate total loss vehicle settlement and  total loss settlement negotiations.

If you have had an accident, you may feel helpless when it comes to getting the compensation for your car and may not be sure of the steps you need to take to keep from getting taken advantage of by car insurance companies.

Depending on the circumstances you may be in one of two situations.

An auto accident that has left your car totaled. Your car is a complete loss and you need to replace it fast. You need to get the insurance company to move quickly with the loss settlement and the actual cash value of your totaled car. 

          OR

Your car is damaged and you want it fixed fast but you think the insurance company will total it. Leaving you short on cash and short on fair market value to repair it with.

Either one of these situations can be difficult to get a fast, accurate settlement you agree with. There are things you can do to ensure a speedy settlement and prevent delay on your part so let’s look at what you should do first.

Notify your auto insurance company as soon as possible.

The sooner you submit a claim, the sooner your insurance company can schedule your case for processing. Some circumstances can cause the process to take thirty days or more to finalize. Make sure they have your contact information and ask when you can expect to hear from them.

Ask your insurance company where they prefer to have the car towed to for evaluation.

Many insurance companies use specific body shops it get fast repair service and accurate total loss evaluation. You may disagree with the shop they chose but if the car is totaled you will not be working with that body shop to fix the car anyway.

Auto Body Repair Shops are usually selected by the auto insurance companies that provide them with low prices, fast service and few complaints by customers. Allowing them to choose the repair shop will speed up the insurance claim process and in most cases, there will be no storage fees.

If you are not satisfied with the shop, they pick than it is wise to take the car to a shop that specializes in that make and model such as the car manufacture’s dealership near you.

If you think the car is totaled you should remove the license plate and any personal items that are in the car as well as jotting down the mileage for future reference.

If you own the car, find the title.

If you are holding the title of the car, you will need to find it and have it accessible to the car insurance company. If it has gotten lost or misplaced, you will need to file for a lost title as soon as possible. If the car is totaled due to an accident the insurance company will want you to sign the title over to them at the end of the settlement.

Find the correct blue book value of your car.

If you do a little research, you can quickly find the correct blue book value of your car. It is a good idea to have this amount available when the insurance company offers you the final payoff amount for your loss settlement.

Many times insurance agents will offer you the least amount hoping you will take their offer. During the settlement negotiating, provide any receipts for major repairs you may have recently had done to the car like transmission replacement or new tires.

This is a good time to know just what your car is worth and what the value is of what the options are that your car has. Kelly Blue Book is a good place to start. However, remember to use the replacement price and not the trade in value. You want the actual cash value to replace your car and don’t forget to include the sales tax you will be charged for the replacement car.

You should also research other vehicles selling in your area to see what the most acceptable replacement value is. Find cars with the same make and model, year and approximately the same mileage. The cash price of these cars is probably what you will be shooting for so write down several of these car’s information and take it with you to negotiate with. Pictures will also help plead your case.

The insurance claim adjuster will show you how he came up with his figure, and that is usually the average price of three or four cars he has picked. If your car was in excellent condition, you do not want his average price. That is why you need to research the cars yourself.

If you are paying for an auto loan on the vehicle, you will need to know the payoff price.

Also, check to see if the loan has any early payoff penalties or additional charges. It can be an unpleasant surprise to find out that you owe more on the loan than the car value is worth. If you knew that you owed more than the value of the car than purchasing gap insurance before the accident would cover the difference. This is something to look into if you refinance a car loan to lower your loan payments.

Tips to complete total loss paperwork.

Insurance adjusters need to settle cases fast to prevent claims from stacking up. Insurance agents are usually willing to bump the payoff price by around $500. If this will get you to where you need to be, take the offer. Otherwise, you will need to prove to the adjuster with facts showing why the car is worth more.

Usually, this will slow down the approval process until a supervisor approves it. Once you reach an agreement with the insurance company for the settlement payoff amount, you will need to complete the paperwork as soon as you can. If you are still paying a finance company for a loan on the vehicle, you may be asked to sign a power of attorney document allowing them to transfer vehicle ownership to them once the remainder of the loan is paid. This needs to be signed by the name of the person that appears on the title.

Remember, until the case is settled and you sign the papers, you are still responsible for making the regular loan payments on time. It is also a good idea to check with the finance company to make sure they pay off your loan on time, or you may be fighting incorrect marks on your credit report later.

Faxing documents to the insurance company that they ask you to mail can also speed up getting a check for the payoff.

How Do Insurance Companies Determine if a Car Is totaled?

  • Your State regulations may require the vehicle to be totaled if the damage is severe enough to exceed the state’s allotted percentage amount.
  • If the vehicle will cost more to fix than the vehicles estimated replacement value. Some companies will total a car if the repair cost is even a large portion of the replacement value without reaching it.
  • If the vehicle is damaged in a way that will make it unsafe to drive even if repaired.

How do Insurance Companies Determine Vehicle Value?

It is hard to put a correct value on your car that you will agree with. When it comes to replacing your car you will be up against inflated dealer prices, down payments you have not saved for and time lost shopping for a car not to mention some of the lost equity you may have paid into the wrecked car. You will need to be prepared to negotiate with the insurance adjuster to get your fair price for your total loss settlement.

It can be very frustrating, especially if the accident was not your fault and you feel like you are taken advantage of. Knowing what insurance companies look at for car value will help you with negotiating a settlement price you will feel more comfortable with.

Most insurance companies start with the blue book replacement price. Mileage and Vehicle options are factored in and the vehicles overall condition before the accident. They will also look at several cars of the same make and mileage listed for sale and find the average price of them. This is where it gets tricky. They pick the cars and then they only use the average price. You can ask to see the cars they chose to see if they are comparable to yours and if your car was in average condition. Usually, an adjuster will work with you if you are courteous and research some information about the cars value before the negotiations.

Can I Get a Rental Car Until the Car is Replaced?

This can only be answered by your insurance company. If you have an insurance policy that covers a rental, they will give you the details of the agreement. If your car is being covered by the other drivers insurance company and they do not cover a rental than it will be up to your insurance or supplemental company to cover the rental cost. In a No-Fault state, you may still have the right to pursue a claim against the other driver who hit you, but this varies from state to state.

What Does Gap Insurance Cover?

Gap Insurance is not for everyone. Many car sales representatives try to talk car buyers into purchasing gap insurance when the buy a car and explain that it will cover total replacement of the car. This is simply not true. Gap insurance only covers the difference between the insurance companies claim payoff when your car is totaled and what you still owe on your auto loan. Also, even then, many times they will claim not to cover depreciation of your car.

Gap Insurance picks up where standard car insurance does not pay for the money still owed on a loan Payoff.  Standard insurance only pays for the cash value of the car, and you are responsible for any of the car loan over that amount. In most cases, the money owed on a car loan can be higher than the car value because of depreciation. If you have extended your loan or you have a high-interest rate on your loan you could be in a situation where gap insurance could be necessary to cover the difference if the car was totaled.

What Can I do if I do not Agree with the Replacement Value?

If you disagree with the insurance companies estimate of your car’s actual value, you will need to show the figures you come up with and how you assessed the amount. Up to date pictures can help if the car was in exceptional condition. The use of a professional auto appraiser may also be needed, just keep in mind that this will slow down the settlement, and you will still be responsible for keeping up with your regular car payments if you have a car loan on that car.

With many older cars the damage may be minor, but the repair cost will be a significant percentage of the overall value so the insurance company will try to total the car. You have the option to negotiate a settlement price and take the car and have if fixed at the body shop you choose. You may have to pay a little more to have it fixed, but you will still have your car. Many times it,s better to replace the vehicle because the vehicles value will drop because of the accident.

I Need A Replacement Car Fast

Get a Loan Approval First.

If you have been in an accident and you think the car may be a total loss then don’t waste any time to start looking. You need a car fast so don’t wait for your total loss settlement. Start looking for a replacement as soon as possible.

Car shopping can be a time-consuming process that should not be rushed. If you are going to need auto financing, then you should start there first. Many people have suffered from bad credit as a result of a car loan that was set up by a car dealer only to find out later that they were sold options they did not need, and the monthly payments were too high.

Try to get pre-approved for a car loan before you hit the dealer lots. This can be done online at home in your own time without a pushy salesperson trying to sell you stuff you do not need. You can use online auto payment calculators to estimate your payments and down payment. Find your credit score first before you send in an application and have an idea of what you can afford for a down payment. You may only have a rental car for a short time during the settlement process so use your time wisely.

A  Car Loan with Bad Credit

If you have found yourself in need of a car loan and your credit score is low, finding a replacement car could be a challenge. It is important to look for a loan that will help you repair your credit and not just get you a car. At this point, the correct car loan is more important than replacing the car. There are several things you can do to ensure you get the best car loan for your next car. Subprime lending is an excellent option for people with bad credit and need a car.

Negotiate a Fair Purchase Price.

Do some research to see how to negotiate for a fair price with a car a dealer. You should know if you are going to be buying a new or used car because the way you haggle for a fair price is different. Read through our new car and used car buyers guide to get the best deal without getting taken advantage of. If you do not have much money to spend than getting the right loan and negotiating the car price can be the most important part of replacing your car.