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This information will become critical, so ask your adjuster what the guidelines of that specific insurance company are. Do not let them tell you that they do not handle that portion, or that they do not much about total losses, if they tell you this, then ask for an answer from someone that knows the exact answer.
You will not be looking for a dollar amount; you are looking for a percentage of value. You need to know if the vehicle total loss threshold is 70, 80, or 90%. You should get an answer to these questions once you know or you think that you could have a vehicle total loss. Why? This number will help you do some reverse math regarding what the insurance company thinks your car is worth in the future.
So there are really two (main) steps for the insurance carrier when declaring a vehicle total loss.
1. It needs to determine how much will it cost to fix the car.
2. It needs to determine the Actual Cash Value of the car.
The first stept will be done by the Insurance Adjuster directly. Insurance companies will not allow body shops to declare vehicle total losses. The reason is that body shops are in the business of fixing vehicles (even insurance “approved” shops). If the there is a vehicle total loss, then that particular shop will not get the opportunity to get the business (fix the car).
The problem with this approach is when the vehicle total loss is close to the total loss threshold, the car will be towed to a repair facility. They will write an estimate there and will tell the insurance company that the car is either a total loss or the dollar amount necessary to fix it. If this is the case, then the insurance adjuster has to come out and write another estimate to make sure that the car is total loss. This can delay the time you are waiting to have your car fixed or totaled!
Whatever the situation is, you must ask to see the insurance adjuster repair estimate. This is imperative to the way you will negotiate later on.
If you want the insurance company to declare a vehicle total loss for your car sometimes the vehicle can be fixed, but you are not sure if it will ever be the same, then you want the repair estimate to be high. You need argue and convince the adjuster that he is missing items, need to allow for “hidden “or supplemental damage.
Look carefully at the labor hours that the adjuster is quoting you. Call a body shop and make sure that these times are correct! How much labor time does it take to fix the door? Adjusters that want to fix a car want to make the labor rate lower than it really is. They do this by lowering the labor time they allow for a repair.
The second very important thing you should point out is the claim expense of fixing the car. If the car takes 10 days to repair, then they will have to pay for 10 days of rental. Event though this is not quoted in the original estimate, it is an expense that the insurance company will incur. Again, Insurance companies are in the business of making money, if they declare the car a total loss, then they only have to pay 3 or 4 days for rental. If they do not, then they have to pay for the days the car is on the shop (whether the car is being fixed or not).
The rental bill alone can move an adjuster to totaled your car. If the estimate of the adjuster is low, and you believe that she/he is not accounting for all damages, then can ask for a tear down.
A tear down is when the body shop (not the adjuster) take the pieces of the car apart and look under the “damage” to see if there is more damage than they can see without taking the body of the car off. These tear down is not free. The insurance adjuster must pay the body shop for this. This will be the cost to handle the claim, and will not be counted against you; however, the insurance adjuster must take it into account when thinking about totaling a car.
Also, make sure they account for towing and storage charges. If the car has to be store while is being painted, that is a cost that the insurance company must pay for. If the car has to be towed again, then that is another cost. If the parts that your car needs must be shipped to the body shop , make sure the shipping cost is included in that evaluation.
If you do not want your car to be a total loss and would rather have them fix it, then do not point out any of the cost factors outlined above.
The second step is to determine the fair market value of your automobile. What is the fair market value of it? Who determines that? And how? Doesn’t the insurance company want the value to be low so they pay you less?
The process of determining the actual cash value of your car is complex. Insurance companies know that they have a conflict of interest when this situation occurs. They have a duty to advocate and to protect their client, but at the same time, they must pay for damages (the less they pay the better for the insurance company).
Insurance companies have a workaround the issue, (they can be suit in bad faith if they are settling total losses for less than they should). They have outsourced the market value evaluation process to independent companies. This way, they can claim that they are going to an in depend company numbers and they have no control over what values vehicles are worth.
For more, please click in the link to part 2 here or at the bottom of the page.
If you would like to be kept up to date regarding auto insurance claims and how claim adjusters are dealing with the consumers vehicle total loss, be sure to sign up for our E-zine below. Our next issue is coming out soon.
Click here to read part 2 of A Vehicle Total Loss Process
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