Having good car insurance with full coverage can help in the aftermath of an accident. When your vehicle is damaged beyond repair, your insurance provider should offer you a fair market value for that vehicle. However, there are times when the victim of a total loss accident is offered a payout that is too low. After a total loss, you can always negotiate with an insurance company to get a fairer settlement.
The ultimate goal of an insurance company is to make the largest profit possible. Insurance companies respond best to compelling evidence. It may be in your best interests to reach out to a Florida car accident attorney to help you negotiate with the insurance companies. Schedule a consultation with the highly skilled personal injury team at Howell & Thornhill, P.A. today.
What is a Total Loss Vehicle Settlement?
After a car accident, insurance companies will investigate how much it will take to repair the vehicle, but when the estimated repair costs exceed the car’s Actual Cash Value (ACV), the insurer usually declares the vehicle a total loss.
Even when a vehicle can be repaired, the repair costs may be more than the ACV, and the insurer may not cover it. Instead, they will determine the most cost-effective path and declare the vehicle a total loss. A car can also be a total loss if it is stolen and never recovered.
In Florida, vehicles often are deemed total losses if the repair costs exceed 80% or more of its fair market value. In other words, if you drive a vehicle worth $10,000, but the crash caused $8,000 in repair costs, then the vehicle is totaled.
Negotiating a Total Loss Settlement After a Car Accident
Typically, the insurers will make their own actual cash value calculation and offer an initial total loss settlement. This does not need to be the first and only offer. A policyholder and their attorney can negotiate for a higher payout.
Policyholders can do their own research regarding their car’s worth, by finding comparable vehicles for sale in the same geographic area or using car estimate websites like Kelley Blue Book and the National Automobile Dealers Association (NADA). They can input various information about their car and compare the listed value ranges. This information includes:
- Make and model
- Year of manufacturing
- Mileage
- Vehicle’s features
- Physical condition at the time of the accident
- Accident history
- Number of owners
If the research of comparable vehicles or website calculator shows a higher value, then submit the information to the insurance company and contest their valuation. It may also be helpful to present other evidence like photos of customized features, any upgrades, or recent major repairs.
After the supporting documentation is provided to the insurance company, the policyholder can request a reassessment. When negotiating with an insurance adjuster, be polite but firm as you point out where their valuation may be wrong.
If negotiations are still stalled, a policyholder can consult an attorney. An experienced car accident attorney is skilled at negotiations and can demand the insurer shows the supporting evidence that lead to the low settlement offer.
Do not hesitate to push back if their ACV seems low. Make sure to do your research and consult with a qualified attorney. This allows you to approach a negotiation to maximize your total loss settlement with a calm and confident demeanor.
Other Elements of Negotiating Total Loss of Vehicle Settlements
There are other elements that may play a role in an insurer’s first or final settlement offer. Usually, these elements deal with a vehicle’s financial status, like:
- Is the vehicle leased?
- Is the vehicle still attached to financing?
- Is the vehicle paid off and owned outright?
In the case of a leased vehicle, the leasing company is often the recipient of the insurance payout. If you want to drive a brand-new car without worrying about depreciation, a great option is leasing a vehicle. However, leasing simply means you have a long-term rental agreement.
At the end of this agreement, you do not own the vehicle and are expected to either return the vehicle or buy it. If the vehicle is involved in a crash and totaled, you still must finish off those rental payments with any received settlement.
If a vehicle is financed and the balance on the loan exceeds the car’s value, the owner may have to cover the difference unless there is gap insurance in place. This means that if the total loss vehicle is not totally paid off and owned by the policyholder, they may not receive compensation. They may even owe more money than its actual worth, and anything above the insurance settlement would have to be paid out of pocket.
In order to protect the driver of a leased or financed vehicle, lenders, and insurance companies often suggest putting gap insurance on the vehicle to cover any remaining balances in a total loss case. If a driver opts to forego the gap insurance and has issues later with their financing, they can refinance or make extra payments. But after a vehicle is deemed a total loss, there is not much you can do about the auto loan, and you are stuck without a car and paying out of pocket.
You will need to be aware of these intricacies when approaching negotiations with an insurance company.
Improvements or Custom Features May Increase the Settlement Amount
If you have spent your time and money enhancing a vehicle or making upgrades, there is a good chance that any amount an insurer initially offers will seem low. It is very possible that your car is worth much more than they try to offer you, but you will need to prove it.
You will also need to add this information as evidence in the negotiations if you intend to increase the settlement offer. Any upgrades made to the vehicle could increase the value. You should provide photos and receipts for upgrades like:
- An improved sound system
- Mechanical or performance enhancements like new tires or spoilers
- Improved aesthetics like new paint jobs, tinting, and visual modifications
- A remote starter
You may want to get a Certified Collateral Corporation (CCC) report on your vehicle. This report provides an itemized list of a vehicle’s features. Adjusters can use this list to help determine the fair market value of a vehicle. Make sure to examine the CCC report yourself to ensure all the vehicle’s features are listed and that the list includes accurate information and details.
Usually, insurance companies will not include customizations and upgrades in to the estimated value of a vehicle. Gather every piece of evidence you can to prove that a vehicle is worth more than they are offering. You can also include some current listings and recent sales of similar vehicles.
Determining Who Pays for Damages in a Car Accident in Florida
When a vehicle collision occurs and damages result, damages to your vehicle may be either paid for by your auto insurance or the other driver’s insurance. Who pays is determined by which driver was responsible for the crash.
Under Florida law, the at-fault driver’s insurance must pay for any damage to all vehicles in the collision. However, the at-fault driver’s insurance often stalls for two weeks claiming they cannot “reach” their insured. A victim may still wish to go through their own insurance to avoid this time delay and have their deductible reimbursed by the at-fault driver’s insurance.
All drivers insured in the state of Florida are also required to carry Personal Injury Protection (PIP) insurance. This means that in the case when people suffer injuries in an accident, each of the drivers must file claims with their own insurers.
The Role of an Attorney in Total Loss of Vehicle Settlement Negotiations
Sometimes referred to as insurance adjusters sometimes as claims adjusters, they are the same thing and play the same role. These adjusters investigate insurance coverage and claims after a vehicle crash. They examine a driver’s coverage and check to see if they are fully covered. They will gather statements from all those involved in the accident. They will review the submitted police report.
As negotiations go on, the insurer’s initial appraisal for your vehicle may be a low one. In our opinion, claims adjusters are skilled at the art of lowballing their clients and trying to get the negotiation over before it really begins.
You can opt to negotiate with your claims adjuster on your own, using the tactics we discussed above, or you can reach out to a skilled car accident attorney in Florida. By simply consulting with a lawyer, you have taken the first step in leveling the playing field.
Just because a claims adjuster will not budge on an appraisal does not mean you will ultimately be unsuccessful or that you do not have a strong case.
The claims adjuster is just doing their job for the insurance company, and it is best to let a professional take over the situation. Hiring an attorney takes the stress off you and allows someone who is familiar with the negotiation process while you manage the other surrounding chaos that comes along with a total loss accident claim.
Typically, a fair total loss settlement can be done without litigation, but an attorney can inform and prepare you for any circumstance that may arise on your way to increasing the compensation for your totaled car.
Our firm empowers our clients with information and arguments to approach the insurance company on a property damage claim. If our client is not able to secure a fair settlement, then we explain the option to file suit on both the injury claim and the property damage claim. The client can make a cost versus benefit analysis on whether to settle or to file suit.
Important Questions Concerning Total Loss Settlements
Q: What is a written settlement agreement?
A: Once the negotiations are over and you have reached a settlement with your insurer, you will want to get written confirmation of the terms and amounts. This is known as a written settlement agreement, which verifies with signatures that everyone is on the same page and agrees. This document helps protect all involved parties by settling on a fair market amount for the vehicle and ensuring that the policyholder will be paid that amount.
Q: Can I keep my vehicle if it is deemed a total loss?
A: By being paid for the vehicle by the insurance company, the vehicle legally belongs to the insurance company after a settlement in a typical total loss case. There are times when a totaled vehicle does not sustain too much damage but still considered a total loss. In these cases, a policyholder may be able to take a decrease in their settlement for the right to retain the car.
Q: How do insurance companies determine the value of total loss vehicles?
A: In most total loss cases, an insurance company will calculate the vehicle’s ACV which is the vehicle’s total worth prior to the accident. Even a brand-new car depreciates in value as soon as it pulls out of the dealership parking lot, so the ACV of a vehicle will almost always be less than the initial purchase price. When determining the actual cash value of a vehicle, a claims adjuster for an insurance company should evaluate the severity of the vehicle’s damage to determine whether it is a total loss. Then, they will look at the vehicle’s specific data—the make and model, how old it is, what condition the vehicle was in at the time of the accident, plus any other recoverable costs. This combined information should lead the insurers to a fair market value or a replacement value.
Q: What type of insurance is best when you are dealing with a total loss vehicle?
A: In Florida, if a total loss vehicle does not have comprehensive and collision coverage, then it is not covered for a total loss, and your insurer will not pay you for the car. With full coverage, your insurer should pay ACV for the lost vehicle if it was a single or multiple car accidents or even if the vehicle is damaged by nature or hitting a deer. When more than one driver is involved in a total loss accident, which driver’s insurance policy pays depends on who was deemed at fault for the crash.
To Negotiate a Total Loss, Contact Our Car Accident Attorneys in Florida Today
Since 1975, the experienced vehicle accident lawyers at Howell & Thornhill, P.A. have been committed to helping Floridians get the most out of their car settlements. If you or a loved one is injured and also has lost their vehicle because of someone else’s negligence, let us advocate for you with the insurance company to make the most of your injury and vehicle claim.
We provide complimentary consultations in our offices around Florida, or we can come to you. We have over 75 years of combined experience protecting the rights and attaining the best possible outcome for our clients. We put the emphasis on face-to-face interactions. Contact us as soon as possible to schedule a consultation. We are here and ready to go to work to deliver the most from your injury and total loss of vehicle settlement.