Getting into a car accident is stressful. When your vehicle is declared a total loss, it can feel even worse. You want to get a fair payout from your insurance, but the first offer you get may seem low. The good news is you don’t have to accept that offer. You can ask for more money. It just takes some preparation and knowing your rights.
Here’s what you need to know about total loss claims and how to handle negotiations with the insurance company.
What Does It Mean When a Vehicle Is a Total Loss?
When an insurance company says your car is “totaled,” it means the cost to fix it is about the same as or more than the car’s value. This is often called the total loss threshold. In Arizona, if repairs cost 80% or more of your car’s value, the insurer will likely call it a total loss.
For example, if your car’s fair market value is $7,000 and the repair estimate is $6,000 or higher, the insurance company may say it’s not worth fixing. They will offer you a settlement instead. This means you get paid the value of the car before the crash, and the insurer keeps the damaged vehicle.
This payout is usually based on the actual cash value or ACV. This is what your car was worth right before the accident, factoring in things like age, mileage, condition, and any previous damage.
How Does the Insurance Company Calculate Your Car’s Value?
Insurance companies use different tools to decide your car’s value. They often rely on pricing guides like Kelley Blue Book, Edmunds, or NADA Guides. They look at listings for similar cars in your area. They also check local dealerships and online marketplaces.
However, sometimes their valuation can be lower than what you expected. This is because they want to keep costs down. They may not count upgrades or recent repairs unless you provide proof.
What Can You Do to Get a Higher Settlement?
You have the right to ask for a better payout if you believe the insurance company’s offer is too low. Here’s how to prepare:
- Research Your Car’s Value: Look up prices for cars like yours in your area. Check the year, make, model, mileage, and condition.
- Gather Receipts for Upgrades: If you added new tires, a better stereo, custom paint, or other improvements, collect receipts or invoices.
- Take Photos: Show your car’s condition before the accident if possible. Pictures can prove it was well cared for.
- Get a Professional Appraisal: Ask a trusted mechanic or dealership to give you a written value estimate.
- Find Comparable Listings: Print or save listings from local sellers with similar cars at prices close to what you want.
When you have this information, send it to the insurance adjuster in a clear, organized way. Explain why their offer doesn’t match the actual value.
Can You Refuse the Insurance Company’s Offer?
Yes, you don’t have to accept the first offer. Many people don’t realize this and end up with less money than they deserve. If you refuse the offer, the insurance company may suggest an independent appraisal or arbitration to settle the disagreement.
This process lets a neutral third party look at the facts and decide on a fair payout.
What If You Still Owe Money on Your Car?
If you’re still paying off a loan or lease, the insurance company usually pays the settlement to your lender. But if the payout is less than what you owe, you’ll still have to pay the difference out of pocket unless you have gap insurance.
Gap insurance covers the difference between what you owe on the loan and the car’s actual cash value. If you don’t have gap insurance, you could end up paying for a car you no longer have.
What Happens If the Other Driver Was at Fault?
If someone else caused the accident, their insurance should cover your total loss. But they will still try to limit how much they pay. It’s smart to prepare your own evidence and ask for a fair amount.
In Arizona, you may also qualify for compensation for loss of use. This covers the time you didn’t have a car while your claim was open. Ask your attorney or insurance agent about this.
How Can an Attorney Help?
Talking with an insurance company can be confusing and stressful. An attorney can help you gather the right proof and negotiate with the insurance company on your behalf. If the insurer refuses to pay what your car is worth, an attorney can help you take further steps, like filing a lawsuit.
You don’t have to face the insurance company alone. A lawyer experienced in total loss claims knows what to expect and can make sure you get a fair settlement.
Get Legal Help Today
If your vehicle was totaled in an accident, don’t rush to accept the first offer from the insurance company. Take the time to research your car’s real value and collect proof to support your claim. You can ask for more money and fight for a fair payout.
If you’re having trouble getting a fair settlement or if you owe money on a totaled car, call a lawyer who can help. You deserve to be treated fairly and get the compensation you need to move forward.
Need help with a car accident case in Phoenix? Call (855) 257-9467 for a free case review. We can help you understand your rights and negotiate with the insurance company to get the settlement you deserve.