Yes, you can negotiate with the insurance company if your vehicle is deemed a total loss and you disagree with the insurer’s decision. The Texas Department of Insurance (TDI) offers guidance about what you should do if the insurance company declares your car a total loss after an accident.
You might have questions about what a total loss means for a vehicle and what to do if you think the insurer’s offer is unfair. Sometimes the insurance company violates its own guidelines about totaling your car. Also, the insurer might not offer you a fair amount for your vehicle. If the payout is too low, you might end up having no vehicle and owing thousands of dollars to the car loan company.
How does Texas Law Define a Total Loss?
Some states have regulations that define when an insurer can declare a vehicle a total loss. Many states call for this when the cost to repair the car is more than 51 percent or more than 80 percent of the car’s value immediately before the collision. Texas leaves this decision in the hands of the insurance companies.
You can check your automobile policy to see if it defines what the insurer considers a total loss. Let’s say that your car’s value was $10,000 just before the crash. If the cost to repair the vehicle is $10,000 or more, the insurance company is highly likely to declare the car totaled.
It usually does not make economic sense to pay more than a vehicle was worth to fix it. Also, after a significant collision, the value of a car goes down.
Why Might You Disagree with the Insurer’s Decision About Your Totaled Car?
People often take issue with aspects of the insurance company’s process when the insurer decides to total out their vehicle. Here are some of the primary objections people have in this situation:
The Insurer did Not Follow Its Own Rules
If the insurance company identifies in the policy or other written materials the point at which they declare a vehicle to be a total loss, they have to abide by that rule. For example, ABC Insurance Company’s automobile policies define a total loss as a situation in which it would cost more than 80 percent of the car’s value right before the collision to repair the car.
If the cost to fix your car is less than 80 percent of its pre-crash value, the insurer should not total out the vehicle. Of course, most insurance policies contain plenty of “wiggle room” language that allows the insurer to get out of some of their obligations.
The Insurance Company Placed Too Low a Value on Your Car
Sometimes, the claims adjuster throws out a number that is much lower than standard references like Kelley Blue Book or Edmunds state for your car. You should not assume that the claims adjuster is acting in good faith or being fair. The adjuster’s job is to pay as little as possible on claims to increase the insurer’s profits.
Many people follow the general rule that one should never accept the first offer from a claims adjuster on anything because adjusters make low-ball offers so often. You will want to do your homework and know the true value of your car before the adjuster even makes the initial offer.
The Claims Adjuster Used the Wrong Kind of Value for Your Vehicle
The policy will control the type of coverage the insurer has to provide. For instance, if you bought an auto policy that provides replacement value, your insurance company should not pay the lower depreciated value.
Most policies do not provide replacement value coverage. Instead, they typically pay the market value. In this situation, the insurer should pay the value that a private buyer would pay for the car, not the trade-in value. Trade-in values are lower than private buyer values.
What Information Will You Need to Negotiate with the Insurance Company?
Consider data as your weapon in a negotiation about a totaled vehicle with an insurance company. Arm yourself well to get a favorable outcome. Here are three things you should know and be able to prove with evidence before starting the negotiation process:
The Value of Your Car Right Before the Crash
Be sure to document the equipment, packages, and add-ons your vehicle contains. Some policies will increase the value of a car for after-market modifications. If you just spent $2,000 on new tires, for instance, get the receipt and show the adjuster.
The Cost to Fix Your Vehicle
Claims adjusters know which mechanics charge more than others. If the insurer wants to total your car, they can select the bid of a pricey repair shop. You will want to get your own bids.
The Cut-Off Point for the Insurer to Total a Vehicle
If the insurer has a written guideline that they total out cars when the repairs cost more than 75 percent of the pre-collision value, do not let them declare your vehicle a loss at 51 percent.
You Could Recover Damages After Your Vehicle Accident
You do not have to deal with the claims adjuster on your own if you have been injured in an accident. You can call in the Strong Arm of Loncar Lyon Jenkins to fight your battles for you. Call us today at (800) 777-7777 to find out how we can help you.
Our personal injury lawyers could fight for compensation for all related losses, like lost wages, pain and suffering, and mental anguish. You may get post-traumatic stress disorder (PTSD) from a car accident, for instance. This may be a compensable loss.
