Total Loss Process

Part II

The total loss process begins when the adjuster is convinced that the cost to repair your car is at least 70, 80, or 90% of the fair market value of your car.

Total Loss Process I	Total Loss Process II
Total Loss Process III	Total Loss Process IV
Total Loss Evaluation	I want my car totaled I
Total Loss and Car Loans	I want my car totaled II
Total Loss eBook	FAULT

Although every state and insurance company vary how they determine a total loss; it is generally accepted that if the value to repair reaches 80%, the vehicle will be deemed a total loss.

If the adjuster is determining whether a car is a total loss, they will first have to obtain a preliminary value of the car.

Adjusters usually call you and tell you that your car is or will be totaled. The do this so they can cut your rental car early. However, if you ask them in the same conversation “what do they think your vehicle is worth,” they will probably tell you that they are not sure. That they need to find comps to determine your value.

They are lying to you. They have a very strong indication of what your car is worth. A total loss adjuster knows the value of the car; if they did not, then how can they determine that the amount to repair the car reached the 80% of its value.

They do not want to disclose this “value” as they need documentation to show you that this is a fair offer, and it is the most they will pay. The insurance company already has a “preconceived” of how much they will offer, they just need to find the numbers.

Every state requires that insurance companies do an evaluation of the fair market value of the car. However, Fair market value is a vague concept as it pertains to total losses. Fair market value means (in this context) that the insurance company can depreciate your vehicle to what it was worth just before the collision.

In essence, they will be buying your car as if it was not wrecked. The question for your then is: how much would sell your car for if it was not in an accident? Get that price on your mind and try to find your own comps before even attempting to settle.

Remember that NADA and Kelly Blue Book will not give you reliable information as they are national directories and subjective numbers. You must look at your local values.

Make sure the insurance company is using only local values. Most insurance companies use third party companies to evaluate the value of vehicles. They do this to eliminate the presumption that they are evaluating vehicles too low so they can settle for less.

The leader third party company that does this type of thing is CCC Information Services Group, Inc. This company will supposedly do a search for similar vehicles to yours in your area (by postal code). They will submit these information to the insurance company so they can make an offer.

How fair do you think those comps are? Let me tell you that CCC is under investigation. There have been several class action lawsuits against that company and the insurance carriers that use it (fortune 500 ones). The most recent class action lawsuit has to do with CCC and Allstate Insurance Company.

Click here for more information on that. My point is that if your insurance company uses a third party company to evaluate total losses, you must be very aware. This is truly where the total loss process becomes unfair and dirty.

Watch out! How do you watch out? How do ensure the insurance company is not taking of the process and leave you with a low settlement? Read every document with a magnifying glass. Request to see the comps and reports the insurance company is using to see evaluate your car. They must disclose them to you (NOT OPTIONAL). Review everything closely.

Check the location of the vehicles and see if they are in your local market. If a comp is not in your local market (within 50 miles), you should tell the insurance company they should not take it into account.

You can also find a comp also outside your 50 miles radius with a high value, and then tell them that if they include the outside your local market, they should include the one you have. Remember to make sure the insurance company is within your local market.

If not, ask them to give you reimbursement for your time, gas, and mileage to go find a vehicle in that area. They will drop the comp instead. I have seen CCC reports for total losses in Washington State trying to use comps in Florida. You cannot go much farther than that before you get to Central America.

Make your the total loss process is fair and that you are not getting the run around with this old techniques. Also, make sure that all your vehicle options are accounted for, stereo system, alarm, rims, keyless entry, automatic transmission, power windows, etc.

If they are not accounted for or the comps they are using do not reflect them, make sure the adjuster knows that these items added to the offer. To learn how to negotiate your total loss value and how to go “back and forward” click here.

If you find that the comps provided to you are too good to be true, or in other words, the prices for those vehicles seem to be at the low end, GO TO THE CAR LOT AND CHECK THEM OUT. I know as a fact that sometimes CCC and other third party companies just call used dealerships and ask for a value? That is not a comp.

The car must physically exist at the lot. If it isn’t, then you can decline that value. If the car was recently sold, you can ask for evidence of that. Remember, there must be good faith and fair dealing on both parties.

If they are quoting random numbers, you need to know where those numbers came from. If the comp cannot be verified, the insurance company must throw it out.

Remember, most insurance policies (your probably does) have a clause called Right of Appraisal, you can request an independent appraisal done by a professional if you are unhappy with the offer. Insurance companies do not like to mention this because THEY have to pay for it.

It can be $300 to $500, sometimes more. They only have to pay if they pick the appraiser. You can pay for one if you want to pick it yourself. I know this is a lot of money, but if your total loss is in the $20,000 and up range, that might not be such a bad idea.