Totaling a Vehicle

Insurance Companies have many tools to leverage against you, be aware!

Totaling a vehicle is all about your negotiation skills!

Totaling a car for insurance purposes is an easy thing, that is if you let it happen. The insurance company will do everything in their power to declare your car a total loss if and only if they believe that they will save money by settling your damage for less than what they can fix the car.

Sometimes you can have a high speed impact in which you end up totaling a vehicle that has a lot of value in it. However, sometimes you can end up totaling a car by a fender bender. The entire process depends on the what value of your car is.

But what value? Who decides what a fair value when totaling a vehicle is? The answer is you! You must agree to a value. The problem truly is that the insurance company has a lot of bargaining tools against you.

This is by no means is an equal negotiation.

First, insurance carriers will cut your rental car as soon as the law allows them to. Even if you carry full coverage, the insurance company can stop paying your rental car as soon as the day they make an offer for the total loss (Texas), or the day they tell you that your car is a totaled loss. The great majority of states will allow for three days.

The offer does not have to be to your satisfaction. The insurance company can make a low offer to get you out of a car so you take a lower offer so you can go buy a car.

Second, even if you believe that the offer is not too bad or it is fair, then you only have one to three days to find a replacement car. Many argue that this period of time is simply not enough to find a reliable vehicle. There are just too many opportunities for the insurance company to take advantage while totaling a vehicle. Be careful.

totaling a vehicle

Third, the insurance company will investigate and make sure that your car has not �prior damage�. Should your car have a dent, scratch, blemish, not being clean, rust, or any other defect, the carrier will deduct what THEY consider is a deduction on the value of the car.

Fourth, any repairs, parts, or any other investment that you made in your car will not be paid in a dollar per dollar basis. For example, if you spend $400 in new tires, it is very likely that the insurance company will only add $50 to the final value of the car (they will try to not give anything unless you ask). Be aware however. Total loss adjusters will tell you that the tires are part of the car and that new equipment (tires or otherwise) does not add value to your car. This is simply not true. Would you pay more for a car with great maintenance records and/or new tires? Again totaling a vehicle is about negotiating all of these factors so you get the most out of the process.

The purpose of insurance (and Tort Law as stated in case law, every state legislation, common law principles, The Second and Third Restatements of Torts, and Equity and Remedies legal theory) is to put you back in the position you were before the accident. Did you have a vehicle that is 5 year old? or did you have a 5 year old vehicle with 2 month-old tires? The insurance company is required to take that into account, if not, they are not providing indemnification for the loss. Do not let them take advantage of your situation! Force them to be fair!

That applies to nice stereo systems, wheels, rims, custom interiors and just about anything in your car. You can request to get those things out of the car, but the insurance company will require to put old tires back in your car.

If you do not, then they will evaluate the value of your car without tires (or radio, or anything else).

Fifth, most state statutes only require state to send you a settlement check when they receive the title of your vehicle.

But, they can cut off your rental car the day they make an offer, there are some states that allow insurance companies to cut your rental a day after they determine the car is a total loss, regardless whether they make an offer or no. Essentially this means that you will be without a title, without a rental car, and without settlement money to get another car.

Sixth, most of the time a lawyer will not help you. Totaling a vehicle is mainly a set science. The value of your vehicle will not go up just because you have an attorney in your corner (unless the insurance company has completely ripped you off where you can make a bad faith claim).

The value of the car will be determined by the comps in your local market, and then the attorney will take 30% off from the settlement value. It will not be worth the time of the attorney nor your financial condition to have an attorney represent you. Insurance companies know this.

So no matter how you want to approach the total loss of your car, it seems that the insurance company has figure out every was to take advantage of the process of totaling a vehicle.

There are however ways to get the most out of the process. You must educate yourself by reading sites like this one and by contacting the department of insurance of your state and asking the details. If you understand the process, then you can draw a line and make the insurance company comply to the few rules that protect you.

Get a great E-book regarding the Total Loss Process