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Car Total Loss Evaluation
A total loss is declared when the value to fix the vehicle reaches 70, 80, or 90% of its value. The CCC report will give the insurance company the “final” total loss evaluation.
The total loss adjuster will take this final value and adjust your car equipment and condition (increase or decrease the offer) to those values presented by CCC.
The adjuster evaluation should (make sure it does) include things like extra options, equipment, and the condition of your vehicle.
It is then and only then that the car total loss evaluation can be presented to a total loss manager. These supervisors will look over the evaluation and determine a range of negotiations the adjuster must follow.
Total loss adjusters are usually at “the bottom of the adjusters’ line of command”. An adjuster has almost no authority to adjust these values. Most insurance companies have control adjusters, the one that makes the coverage, liability, and/or injury decisions.
Total loss adjusters must respond to the control adjusters and their own supervisors. Once the car total loss supervisor looks at the claim, she will give a final value the total loss adjuster must offer to settle the claim.
The range of negotiation for these adjusters is about $500. However, these ranges of negotiation can be modified depending on the year, type, model, and make of the car. Insurance companies do this intentionally. If they wish to give a tight negotiation range, the adjuster must be a much tougher negotiator.
Total loss adjusters have actual numbers to settle a claim (you must settle for $12,000 or less), while bodily injury adjusters are dealing with completely subjective numbers and have more authority to move the settlement ranges.
Your job is to send the claim back to the total loss adjuster’s manager so that he can authorize more money for the settlement. The adjuster will tell you that their final offer is the most they can give or the most that is obligated by law.
They will tell you and do several things to try to leverage the claim; one of them is cut your rental as soon as they can. The faster you are out of a rental car, the more pressured you are to settle. This is a dirty negotiation tactic, but a favorite one of claim adjusters. I recommend this eBook to learn how to deal with situations like this one.
Due to the total loss adjuster’s limited range of negotiation, it will be hard to move them from their initial offer. Some adjusters will tell you that their first offer is their last offer since it is based on the strong comps (comperable local market prices) they have.
They will argue that this is the most money they can give you for your car. This is simply not true. There is always a second offer, even if the adjuster does not think there will be one. Most insurance policies have a right of appraisal clause.
This clause gives you the right to request an independent third party appraiser to inspect and make a determination regarding the value of the car. This appraisal usually is much more accurate than a CCC evaluation, but it costs money (something the insurance provider does not want to pay).
An appraiser will actually inspect the condition of the car and compare that directly with vehicles on your local market. The appraiser is not a corporation that is running databases, but an actual person comparing the conditions of both cars.
Try to get an appraisal - either the insurance company will increase your offer (they can save by increasing your offer than by paying for an appraiser) or they will pay for one (if they believe their offer is a strong one).
It is still an expense for them. If you do get the appraisal, it does not mean that you should not review it also. Make sure that everything is accounted for.
A note about car total loss adjusters: These individuals are under a lot of stress. Think about it, all they do is settle total losses every day for the lowest amount of money they can. Every customer is a conflict customer. Every claim is a difficult one. Their job simply sucks. They shoulder the pressure from the insurance company, from their boss, their quarterly review, and the ultimate customer.
Insurance companies keep track of LEO. What is an LEO? It is their loss economic opportunity! What is it? It is the amount of money they could have shortchanged you but were not able to. Insurance companies do not give bonuses to adjusters for getting good settlements.
However, they keep close track of those adjusters who are “settling too high” or “not negotiating hard enough”. These adjusters are the ones that do not get a bonus and are not considered for promotions.
My point here is that most of these individuals are difficult to negotiate with, they are cranky, and they are unreasonable. Many of them love to quote the law when they have no idea what the law says or what the law is about.
They will tell you what they think the law says and what they have been trained to say. Few double check or consult with attorneys outside their corporate office to see if they are acting within the bounds of the law.
Always double check what they are saying and remember that they are not making the decisions, it will always be the person behind the scenes that will have the ability to increase the value of the car.
Instead of fighting the total loss evaluation and arguing with the adjuster, attack their reports and their numbers. That will end up yielding much better results than simply playing the negotiation game.
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