Were you recently involved in an accident that totaled your car? One of the most common misunderstandings that most people have when dealing with an insurance company is the belief that they will be paid the price they paid for their car if it is totaled.
Unfortunately, that is not the case – and in most situations, you might not even get true full market value for your car. Also, this is more common than you think. According to NADA.org (National Automobile Dealers Association) more than 5 million vehicles are totaled each year.
So what can you do about it?
Well, your insurance company is not going to give you more money for your car simply because you think it is worth more than their estimate.
The bad news is that, if you want more money for your car, you’re going to have to negotiate for it.
The good news is that, as you continue reading, you’ll better understand how your insurance company determines the value of your car. You’ll also learn about a few strategies that you can use to maximize the amount that your insurance will give you for your car if it is has been totaled.
How do insurance companies determine the fair market value of my car?
After you’ve been involved in an accident, an adjuster from your auto insurance company will determine the damage to your car. If he or she deems the car to be totaled, a value must then be assigned to the car. Even Nationwide has a Totaled Car Guide.
When assessing the value of your car, the adjuster and the insurance company will do the following:
Evaluate the condition of the car prior to the accident
Research the market value of your car
Get 3rd party appraisals of your car
The adjuster will determine if your car is in excellent, good, fair, or poor condition. Even if you kept your car in pristine shape prior to the accident. the car is not likely to receive an excellent rating unless it is a few months old or less.
Once the adjuster has done his or her job and filed the necessary paperwork, the insurance company takes over to figure out the market value of your car. While one might think that all they need to do is use Kelley Blue Book or Edmunds.com, most car insurance companies choose to use their own methods.
The reason is simple – they want to pay out as little as possible.
Although every car insurance company is different, most will contact local dealerships and 3rd party companies to see what a car similar to yours is selling for in your area. Whether they look at all the vehicles or a small scale is not known, so it is best that you do your own research.
If you’re still asking the question, “How much will insurance give me for my car?”, it is at this point that you’ll be able to find your answer.
Your insurance will
likely contact you with the dollar number they are willing to pay out for your totaled vehicle.
If you feel that they undervalued your car, then it is important that you speak up sooner rather than later. Ask for a copy of the report they compiled, including all of the information they used to determine your car’s value.
Believe it or not, there are many cases in which customers have challenged the value set by insurance companies, and as a result, received an extra $1,000 or more for their car.
Do you want to get more money for your totaled car? Here’s what you should do
If you want the extra money that you deserve for your totaled car, don’t just sit around and expect your car insurance to pay it out. Instead, consider using any and all of these tactics:
Do your own research
Contact local dealerships
Keep detailed records and take into account any extra options and features your car had
Compare your research with that of the car insurance company
The best thing you can do when negotiating how much you will get from insurance for your car is to prepare yourself as best as possible. Research the recent sales of your vehicle online, as well as current sale prices. Not sure where to start? Consider Autotrader.com or Edmunds.com to gather data.
In addition to using the Internet as a resource to gather sales data, contact local dealerships that sell a make and model that is similar to your vehicle. They will likely provide with you a higher sales price, which will only work out in your favor.
Lastly, consider using Kelley Blue Book to get the fair market value of your vehicle.
As you conduct your research, make sure to keep detailed records of all the data you gather from all of your sources. Try to get any sales figures in writing, as you’ll be able to use these to negotiate more money. Be sure to also locate any information related to the extra options that your car had. From special car stereos to reverse cameras, those added features could add a bit more money to the check from your insurance company.
Once you’ve compiled all of your data, and received the detailed information from the insurance company, it’s now time to compare your research. Look to see where you might be able to squeeze your provider for the extra dollars you deserve.
When you contact your insurance company to state your case and negotiate for the higher value, it is also best to be courteous. At the same time, however, stand your ground. The agent at your insurance company will be far more likely to help you out if you come across as confident yet cordial.
By being informed and following the suggested tactics, you should be able to negotiate more money, no matter what kind of answer your insurance company gives after you ask them what they will give you for your car.