Your car was totaled in the accident but the insurance offer is really low! Is there anything you do to increase the insurance offer on the car?
The liability insurance company is only responsible to pay the amount your vehicle was worth in the marketplace on the day before the accident. That amount may or may not be enough money to replace the vehicle. Keep in mind that insurance companies pay only average value, not top value, for a used car that has been totaled. And they pay nothing at all for sentimental value!
Check the value of your vehicle on the Internet at www.kbb.com and www.nada.com. Also check the Internet and/or newspaper classified ads to try to locate a vehicle very similar to yours (similiar in age, mileage and options) to check the price. If you find values which are higher than the insurance offer, submit copies to the adjuster as part of your negotiations.
Be sure to give the adjuster written proof of major repairs to the vehicle, such as replacement of the engine or transmission. Proof of regular maintenance such as regular oil changes may help increase the value. Be sure the adjuster knows if your car had no rust or was in particularly good condition so that can be factored in. Ask how the car was rated--average, good, excellent, etc.
If you had prior damage on the vehicle, the adjuster may want to deduct the cost of that repair from your settlement. Try to negotiate on the amount deducted.
There can be two different total loss offers—one where you give the liability carrier the car in exchange for the settlement, and a second offer (for less money) where you keep the car. Which offer is better depends on the extent of the car damage and whether you have the time and energy to deal with the damaged vehicle.
In a total loss settlement where you give the insurance company the title and the damaged car, they should pay the car value plus an additional amount for sales tax for your county and transfer and title fees.
Unfortunately, total loss offers are sometimes lower than the balance owed on your car loan. This seems incredibly unfair if the accident was not your fault! If you paid a high price for the car, your loan may have been more than the market value of the car when you initially financed the purchase. The bank may have loaned more than they should have to help you out. Since you bought it, the value of your car has depreciated every year. You may have damage you did not repair or that car may not be in the best mechanical or exterior condition. If you owe more than the amount offered, you are "upside down" on your loan. All the funds from the total loss settlement will be given to your lender, and you will have no car and a remaining loan balance to pay off!
In my years of handling auto accident claims, I have found that figuring out a way to get another car helps reduce stress. If you have been making a loan payment and you have good credit, call your lender and explain the circumstances. Ask if you can finance another car and roll the remaining balance of the loan from the totaled vehicle into the financing of the new vehicle. If you can find a good vehicle that is not overpriced, your lender will probably work with you in this way. Once the car has been replaced, you can focus on healing from your injuries.
