Auto Insurance Claims: total loss auto claim, gap insurance, appraisal clause

Question
Awful situation- hit and run accident, no gap insurance. The Body shop says the auto is repairable but the insurance determined that it is a total loss. They are basing their assessment on replacement costs and won't allow repairs as recommended by the body shop. Insurance has already notified financial institute who wants the vehicle released immediately. Insurance is only offering $8505. We have found similar autos with same or more mileage for more than $2000 over the insurance estimate. What should be our next step?

Answer
Alecia,

The decision to repair or replace your vehicle is the sole discretion of your insurance company. However, they owe you the ACV (actual cash value) of your car, which is defined as the cost to replace it with one of like kind and quality, plus sales tax and license transfer fees. If their offer is insufficient to accomplish that, you can refuse their offer and demand that they provide information about comparable vehicles to yours. If they dig in, there is the appraisal clause in your policy that provides a resolution to such disputes.

Each side chooses an independent appraiser to evaluate the value of your car, the two appraisers select an umpire to make a binding arbitration based on their findings. Each party pays the cost of their appraiser and splits the cost of the umpire. If you decide to take that route, send written notice of your election to exercise the appraisal clause.

If after all that the insurance company still wants to total your car, you can elect to retain the salvage and the insurer will deduct a portion of the vehicle's value (typically 20%) from the settlement. Once this is done, the vehicle will have a branded title as a former total loss. Your state will have a procedure in which you can have it retitled as a reconstructed vehicle, which will tend to stigmatize the vehicle in terms of its value, but you will have your car.

Charlie