Navigating the Total-Loss Maze
When the costs to repair your car exceed your car's value, you have what's known as a total-loss claim.
(If you want the full-blown details on how an insurance company figures this out, check out the nearby sidebar, "How you know if your car is really totaled.
") If your car is a total loss, the actual cash value (that is, the preaccident market value) of your specific car at the time of loss needs to be established.
Remember, this is different from book value.
Book value is the average selling price of a car like yours, with similar features and mileage, in a cleaned up, dent-free condition.
Various used car guides list these prices.
You should know three things about book value:
Therefore, your insurance company needs to check with used-car dealers to see what price your car, preaccident, would sell for.
Push the insurance company to get at least three estimates from local dealers.
(But be warned: The dealers may give the company a price that's lower than the book value.
) To get the best settlement offer possible, check with at least three dealers yourself.
Clip out any newspaper used-car ads for cars similar to yours.
When you call dealers, talk only to the used-car manager, whose opinion will carry more weight than a salesman's.
Then write down the manager's name, the dealership's name, the manager's phone number, and his estimate of what he would sell your car for.
If your car is really mint and you have good photos, pay a personal visit to the dealership.
The photos will help you get a higher estimated value.
Next, average those three estimates and any newspaper prices to come up with your own estimate of your car's preaccident value.
Then sit on it.
When the adjuster makes you an offer, if it's equal to or greater than your average estimate, smile at your good fortune.
If the offer is less than yours, pull out your information and insist that he either accept your number or, at the very least, average your number with his.
If he balks at that, enlist the aid of your insurance agent.
When you buy a car, you also have to pay sales tax, title fees, and so on.
Be sure that the insurance company pays you for all those added costs.
And don't forget the prorated share of your license plate fee, based on the number of months until your plates would have expired.
In a total loss situation where the accident was caused by the other driver and where your car won't be repaired, simultaneously file a claim with the other driver's insurance and your own collision coverage.
By filing both claims, you'll get two offers for the value of your car, and you can take the highest one.
(If you want the full-blown details on how an insurance company figures this out, check out the nearby sidebar, "How you know if your car is really totaled.
") If your car is a total loss, the actual cash value (that is, the preaccident market value) of your specific car at the time of loss needs to be established.
Remember, this is different from book value.
Book value is the average selling price of a car like yours, with similar features and mileage, in a cleaned up, dent-free condition.
Various used car guides list these prices.
You should know three things about book value:
- It's the average selling price for a car like yours, in your area, which means there were plenty of cars that sold for more - some even much more.
Your mint car could be one of those.
Of course, the reverse could also be true. - It's a guide - it says so right on the cover - not a bible.
- It doesn't always take into account the supply and demand factors in your particular area.
A sports car in Alaska may not be worth as much as a sports car in Los Angeles.
Therefore, your insurance company needs to check with used-car dealers to see what price your car, preaccident, would sell for.
Push the insurance company to get at least three estimates from local dealers.
(But be warned: The dealers may give the company a price that's lower than the book value.
) To get the best settlement offer possible, check with at least three dealers yourself.
Clip out any newspaper used-car ads for cars similar to yours.
When you call dealers, talk only to the used-car manager, whose opinion will carry more weight than a salesman's.
Then write down the manager's name, the dealership's name, the manager's phone number, and his estimate of what he would sell your car for.
If your car is really mint and you have good photos, pay a personal visit to the dealership.
The photos will help you get a higher estimated value.
Next, average those three estimates and any newspaper prices to come up with your own estimate of your car's preaccident value.
Then sit on it.
When the adjuster makes you an offer, if it's equal to or greater than your average estimate, smile at your good fortune.
If the offer is less than yours, pull out your information and insist that he either accept your number or, at the very least, average your number with his.
If he balks at that, enlist the aid of your insurance agent.
When you buy a car, you also have to pay sales tax, title fees, and so on.
Be sure that the insurance company pays you for all those added costs.
And don't forget the prorated share of your license plate fee, based on the number of months until your plates would have expired.
In a total loss situation where the accident was caused by the other driver and where your car won't be repaired, simultaneously file a claim with the other driver's insurance and your own collision coverage.
By filing both claims, you'll get two offers for the value of your car, and you can take the highest one.
