What to Do if Your Vehicle is Deemed a Total Loss and Insurance Doesn’t Cover Full Value

What to Do if Your Vehicle is Deemed a Total Loss and Insurance Doesn’t Cover Full Value

Usually, you take insurance to cover unforeseen losses. But what if after the event, the insurance company fails to cover the losses? You will feel lost and betrayed. However, understanding what you can do in such a situation can soothe the pain.

Here’s a comprehensive guide on what to do if you find yourself facing a complaint about the insurancecompany, experiencing claim rejection services, or dealing with a delay in the claim process. 

 

Understanding Total Loss and Insurance Valuation 

A vehicle is typically considered a total loss when the cost of repairs exceeds 75% of its current market value. This can lead to significant discrepancies between what you believe your vehicle is worth and what your insurance company offers.

Common Issues with Insurance Claims

1. Discrepancies in Valuation: Insurers often use third-party valuation tools that may undervalue your vehicle.

2. Claim Rejections: Claims can be rejected due to incomplete documentation or policy exclusions. 

3. Delays in Claim Processing: Prolonged evaluations by adjusters can lead to frustration and financial strain. 

Steps to Take if Your Vehicle is Declared a Total Loss 

1. Order an Independent Appraisal

If you disagree with the insurance company's valuation, consider ordering an independent appraisal. This is especially useful if your policy includes an appraisal clause, allowing for disputes over valuation to be resolved through an independent evaluator. 

2. Gather Supporting Documentation

● Maintenance records 

● Recent odometer readings 

● Photos of the vehicle pre-accident 

● The original window sticker shows all options 

3. Negotiate with Your Insurance Company

With your appraisal and supporting documents, initiate negotiations with the insurance adjuster. Highlight any inaccuracies in their assessment and present evidence that supports a higher valuation.

4. Prepare a Counteroffer

Instead of waiting for the adjuster’s response, proactively present a counteroffer based on your research and appraisals. Use online tools to estimate your vehicle's resale value accurately. 

5. Seek Written Estimates for Repairs

If repair estimates seem low, obtain written estimates from reputable body shops to demonstrate that repairs could exceed initial estimates. 

6. Document Everything 

Document all communications and keep a record of them, like any conversation with your insurer, including settlement offers and negotiations. Use certified mail or email to maintain proof of correspondence.

What to Do If Negotiations Fail  

If negotiations do not yield satisfactory results, consider these options:

1. Legal Action

Filing a lawsuit may be necessary if you are not satisfied with the valuation. Consulting an insurance lawyer in insurance disputes can help simplify this complex process effectively.

2. Buy Back Your Totaled Car

In some cases, you might have the option to buy back your totaled car from the insurer at a reduced price with a salvage title. This could be a viable option if repairs are manageable and you want to retain ownership of your vehicle. 

3. Using Expert Services 

For those facing difficulties with their claims, experts offer assistance in understanding insurance processes and helping policyholders understand their rights and options when dealing with claim rejections or delays. 

Facing a total loss determination from your insurance company can be overwhelming, but knowing how to respond can make a significant difference in securing a fair settlement. Whether through negotiation, or legal action, being proactive and informed will help you to tackle any insurance claim-related issues effectively.