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Tips for dealing with insurance company to settle Total Loss case

December 4th, 2008 · 13 Comments

I knew very little about how auto insurance company worked until very recently. During the labor day weekend, I took the kid to the park. We parked the car legally on the street near the park. A few hours later, when we returned, the entire rear end of the car was smashed. There was a note left by police.

Apparently, a delivery truck had hit my car from behind. The driver tried to flee the scene. But, a couple of neighbors nearby heard the accident. They rode their bikes to caught the driver, and called police. The driver claimed that he didn’t know his truck hit my car.

I immediately contacted the trucker driver’s insurance company. After reviewing the police report, they agreed that it was the truck driver’s fault. However, they had estimated that it would cost more for them to repair my car than paying me some cash based on the market value of my car. They declare my car as Total Loss.

Before this accident, I even didn’t know that insurance company could just declare a car as total loss even though my car was still drivable. I really liked my car. But, I had no choice when they declared it as "total loss". (I could still get my car back if I pay some money to the insurance company to buy my car back, but it will forever be labeled as a savaged vehicle, which essentially has no re-sell value.)

I’m the victim, but I cannot even decide if I want my car to be repaired or getting a cash compensation. In my opinion, there is something wrong with our insurance law and regulations. But, that’s a different topic. I shall not digress. 🙂

I spent the next 12 weeks to negotiate with the insurance to settle the total loss amount. It was worse than having a root canal. The insurance company applied every single dirty tactic you could imagine. But, I did my homework. I was firm, strategic, and tough with them.

In the end, I reached a settlement with them at a cash value that was over $1,000 higher than what they offered. And this is for a car that has a market value of about $6000 according to Kelly Blue Book.

If you’re in similar situations, below is my top tips for negotiating with insurance companies settle your Total Loss case, and not get ripped off by the evil insurance companies!

  • never accept the initial offer by the insurance company
  • they’ll tell you that they have asked a 3rd-party company to estimate the market value of your vehicle. And they cannot change the estimate. Yes, they can! Do you research. Search online. Search your local papers. Search craigslist.org. Find comparable cars that are selling at higher price. Show them. They must consider what you find.
  • go to your state insurance commission’s web site. make sure you have a thorough understanding of your state’s law/regulations that protect consumer in total loss case. You need to know your rights.
  • when they offer you a rental car for 2 weeks, ask for 2 months or longer. it’ll take a long time to resolve a total loss case. In my case, the process took 3 months. You need a vehicle to drive during this time. 
  • if the appraiser is being unreasonable with you, don’t be afraid to ask that "I need to talk to your manager". Keep escalating. The appraisers are trained to give you a hard time so that you will give up the fight. Don’t let them get into your skin. Be firm, and be tough. It’s your car. You’re the victim. You desire a fair compensation.
  • do your homework. you should figure out the fair price for your car — that’s the amount that you want to get compensated by the insurance company. Make sure you include tax, and other fees. They need to pay you the total amount that you need in order to buy and register a replacement of your lost car.

In this economy, a lot of insurance companies are having financial troubles (just look at AIG). They’ll try to squeeze every single cent from consumers. You need to stand firm and protect your rights. It’s up to you to get fair compensation for your lost vehicle. Don’t give up. Have a good fight! 🙂

Fresh off the press! I just published How I successfully negotiated with auto insurance company to settle Total Loss and got $1,000 more back Premium Report. Check it out!

Tags: Saving Tips

13 responses so far ↓

  • 1 virtual insurance // Feb 19, 2009 at 6:39 am

    Great tips. just add your blog to my rss feeds for more great tips in the future

  • 2 Best term // Feb 26, 2009 at 6:05 am

    This is so sad ti know, I am not impressed with the way insurance companies tried to apply all the tactics to prove that your car is total loss. Not at all acceptable by any means.

  • 3 D // May 28, 2009 at 2:22 pm

    Very helpful. I'm going through the process now and I had to return the rental but I am still without a vehicle. The insurance agency told me that a letter from them stating how much the car is worth should be enough to get started with another loan but apperently not because the dealers want prroof that the insurance will pay it off. I can't get around and I'm missing work.

  • 4 asgpres // Aug 13, 2009 at 4:39 pm

    Not all insurance companies operate the same, I had a total loss claim, I disagreed with te value and submitted my comparables and they even hired another independent appraiser to appraise my vehicle. We came to a higher amount, $2500 higher than the original offer and it was done in a week. I do not mind saying that my insurance company is 21st Century.

  • 5 GeekMBA360 // Aug 13, 2009 at 5:23 pm

    which insurance company is this? I'm glad to hear good story about insurance companies.

  • 6 Rachel // Oct 16, 2009 at 12:17 pm

    I am having difficulties with my insurance company as well… not on the value of the car, the adjuster was very nice and offered me a fair value on my car. The problem I am having is with the rental. Having just lost my car, they provided me a rental. They didn't send me the paperwork for the total loss until over a week after I received the quote, and when I did receive it, it was on Friday evening before a Holiday weekend. They expected me to get a letter notarized over a Holiday and refused to pay for my rental car after Tuesday. How is it at all possible to get a new car when I have to shell money out of my own pocket to pay for a rental now? I still haven't received the settlement check! It is ridiculous. I am now thinking of calling back and asking for management. On my policy it states that they will cover up to 1 month of rental coverage, it has only been 2 weeks.

  • 7 nikusept // Jan 4, 2010 at 10:16 am

    Inchirieri de masini in Bucuresti si deasemenea inchirieri auto la aeroportul Baneasa si Otopeni. Parcul nostru auto detine cele mai bune solutii la preturi imbatabile. Daca doriti sa inchiriati o masina de la aeroportul Baneasa sau otopeni va sugeram sa folositi rent a car baneasa.

  • 8 Swing Sets // Jan 30, 2010 at 1:07 pm

    Very helpful. I'm going through the process now and I had to return the rental but I am still without a vehicle. The insurance agency told me that a letter from them stating how much the car is worth should be enough to get started with another loan.

  • 9 hinsuranceleads // Mar 27, 2010 at 6:50 am

    Now a days most of the people are worried about their health and health insurance is one of the best for the people.I think it also help people for free of tension which is the a major reason health down….Thanks for the nice post and keep up blogging…

  • 10 cheap car insurance // Apr 7, 2010 at 8:35 am

    We should never accept the initial offer by the insurance company and your points to deal with the insurance company to settle total Loss case ll be very useful for those who face the situation like this and thanks for posting this informative article.

  • 11 JimmieBlake // Jul 29, 2010 at 4:28 pm

    Although the exact origin of the tale is unclear, it seems unlikely that even the earliest version was based on a real case.

  • 12 squinkies // Sep 22, 2010 at 9:24 am

    some good points raised here…

  • 13 pottinger // Oct 31, 2010 at 5:53 am

    Just wanted to say good work before i i forget.

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