Auto Insurance Claims: car totaled my fault how to get enough money, giving me a hard time, poor economy

Question
Hi,
I got into a rear end accident, a car was stopped on the highway as it had rearended someone, and my car rear end the other car. As a result my car is totaled and I had to go to the hospital by ambulance to get checked out. Now my insurance company is giving me a hard time to give me a full value of the car. Previously, I had opened a claim with them for the damage to the right side of my car and they had paid me for that (it was last month) and I still had to get the car fixed. Now my car is totaled and the insurance company is saying that since I had not fixed the cosmetic damage, they will deduct the amount from the final settlement amount which they will offer me. My car was in a dirveable condition and was in overall good condition. What are my options at this point. My insurance company is nationwide. thanks

Answer
Supriya,

Thank you for your question. I  apologize for not responding sooner but I have been preparing and in trial for that past few days.

Perhaps due to the poor economy, it appears insurers are undervaluing total losses and this trend appears to be escalating. The fact is, they do this because most times they are successful in paying lower claims payments and retaining/saving claims dollars , thus reducing their pay-outs and increasing their profits.

It’s important to understand that your insurance policy is a contract between you and your insurer and this contract calls for certain responsibilities and obligations by both you and they. If you have met your responsibilities (paid your premiums, reported the loss etc.) they too have to meet theirs , including indemnifying you (to make you whole) for your entire covered loss and place you back to the same economic condition as you were prior to the loss.

With that said, if your vehicle had a prior loss whereas you were compensated for the damages, your insurer met their obligation if they indeed provided sufficient funds to properly and thoroughly repair your vehicle. If you had not attained repair and the damages still existed, they would have the right to reduce the value of the vehicle by those existing damages and owe you’re the “Fair Market Value” for the remaining value.

Under the terms of your policy they will owe to provide you sufficient funds to purchase a comparable replacement vehicle of the same condition, mileage, condition etc. as yours was prior to the most recent loss and do so on the retail market.  In addition, you may also be entitled to sales tax and tag and registration transfer fees.

With this said, you should do your own homework to determine what the replacement value of your vehicle was in the current market place for your vehicle. Find two or three ads of vehicles similar to yours in options, condition (without prior collision damage), mileage within a 50 to 75 mile range if possible. If not, go to 100 or further to determine your vehicle’s Fair Market Value (FMV) or Actual Cash Value (ACV).

Once you get several comparables, add them together and divide the numbers by the number of comparables and this will give you and average, or, if you have a number of comparables,  you can drop the highest and the lowest and do the average of the remaining comparables to enable you to illustrate the average retail value and replacement value of your vehicle. Then deduct the prior estimated repair cost of the prior damages and you’ll have a reasonable  replacement cost of a similar vehicle in your market. Add sales tax and tag and registration transfer fee (if applicable) and use this number as your settlement number. Settlements are generally negotiable and as you have found, insurers rarely make their best offer of settlement initially and it may take some research and coaxing from you to achieve a satisfactory settlement of your loss.

Of course your collision deductible, as noted within your policy will be deducted from any settlement from your insurer.

If your insurer fails to deal with you in a good faith manner, report them to your insurance commissioner or whatever office overseas insurers in your state.

Note that your policy may include an “Appraisal Clause” provision which may provide you another method to resolve a dispute. You can go to our website @ www.AutoDamageExperts.com to learn more of this method or feel free to call us for assistance.

I hope this helps answer your questions and help you attain a fair and reasonable settlement for your loss.

Barrett