What Should a Car Owner Know Before Negotiating with an Insurance Company When a Car Has Been Totaled?

If your insurance company informed you that your car has been totaled, you may wonder if you have any recourse to challenge this decision or if the amount they’re willing to give you is fair. Before you sign any kind of release, or even a check from the insurance company, you need to know what options you have.
Your Insurance Policy

Among the most influential factors in getting compensation for your property damage is how you set up these portions of your insurance policy:

• Collision coverage: The optional coverage can boost premiums, but without it, you may face a long haul in trying to recover compensation for your vehicle, even when you are not at fault. If you have collision coverage, you will still have to pay this deductible if you go through your own insurance policy.
• Gap insurance: If you financed your vehicle gap insurance is a policy that covers the difference between the value of the totaled vehicle and the amount you owe. If not, you are responsible for paying the remaining balance.

Your Options

When the insurance company tells you that your car is totaled, you don’t have to agree with the settlement they offer. You can get an independent estimate from a body shop of your choice and negotiate with the insurance company. You have the option to keep your car, but know that the insurance company will reduce the amount they pay you by a “salvage value” based on what the vehicle might be worth as scrap. Make your insurance company aware of any after-market items you added to your vehicle, such as a new engine, tires, or expensive stereo system, and insist that the value of the settlement reflect these investments.

If you agree to the insurance company’s settlement, know that you may need to turn over the title as well as the vehicle. Your rental coverage will probably end within a day or so after the resolution. Finally, have our attorneys review the release before you sign anything, including a check, to make sure the settlement is only for property damage and will not have affect your ability to file a personal injury claim.