Dealing with Your Insurance Company After Your Car Was Totaled

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 What Happens When My Vehicle Is Categorized as a Total Loss After an Accident?

When your vehicle is categorized as a total loss after a car accident, it means that the cost of repairs exceeds a certain percentage of the vehicle’s actual cash value (ACV). In such cases, the insurance company will generally pay you the ACV of your vehicle minus any applicable deductible.

Factors contributing to whether your car is totaled include the extent of damage, the age and condition of the vehicle, and the cost of repairs.

What Type of Research Is Performed?

When determining whether a vehicle is a total loss, the insurance company will perform research to assess the vehicle’s pre-accident value by consulting sources like the Kelley Blue Book or NADA guide, evaluating comparable vehicles for sale in your area, and factoring in any upgrades or customizations.

The insurance company’s assessment will also take into account the estimated cost of repairs based on a thorough inspection of the vehicle by a claims adjuster.

Kelley Blue Book (KBB)

The Kelley Blue Book (KBB) is a widely recognized and trusted source for determining the value of new and used vehicles in the United States. Founded in 1926 by Les Kelley, the KBB initially started as a list of used car prices compiled by Kelley for his dealership’s customers. Over time, the KBB has evolved into an extensive online database that provides vehicle values based on various factors, including make, model, year, mileage, location, and overall condition.

The KBB collects data from various sources, such as wholesale auctions, dealerships, and consumer transactions, to establish market-based values for vehicles. The KBB value is often used as a reference point during negotiations between buyers and sellers and helps in determining an appropriate price for a vehicle. The KBB also provides trade-in values, which can help car owners understand the value they can expect when trading in their vehicle at a dealership.

National Automobile Dealers Association (NADA) Guide

The NADA guide, published by the National Automobile Dealers Association, is another respected source for determining vehicle values. Established in 1933, the NADA guide provides market-based pricing data for new and used cars, trucks, motorcycles, boats, and recreational vehicles. The guide is updated regularly to reflect changes in the market, using data collected from millions of transactions and industry sources.

Like the KBB, the NADA guide considers factors such as make, model, year, mileage, location, and overall condition when determining vehicle values. The NADA guide is widely used by dealers, lenders, and insurance companies to establish fair market values for vehicles.

Evaluating Comparable Vehicles for Sale

Insurance companies evaluate comparable vehicles for sale in the area by researching local listings, dealership prices, and online classifieds. They gather data on vehicles with similar make, model, year, trim level, mileage, and condition to establish a range of prices for comparable vehicles in the local market. This helps insurance companies determine a fair market value for the vehicle in question.

Some sources they may use include popular online marketplaces like AutoTrader, Cars.com, and CarGurus, as well as local dealership websites and classified ads. They may also consult industry reports and data from auctions to get a broader understanding of the local market trends.

How Can I Dispute the Value of My Vehicle?

If you believe that the insurance company has undervalued your vehicle, you can take steps to dispute their assessment.

Begin by gathering documentation to support your claim, such as receipts for upgrades, maintenance records, or recent appraisals.

To gather documentation to support your claim, follow these steps:

  1. Collect receipts for any upgrades or customizations made to the vehicle, such as new parts, aftermarket accessories, or performance modifications.
  2. Compile records of regular maintenance performed on the car, such as oil changes, tire rotations, and scheduled services, as these can demonstrate that the vehicle was well-maintained and may contribute to a higher value.
  3. Obtain a recent appraisal or valuation of your car, if available. This can be done through a dealership, mechanic, or an independent appraiser specializing in vehicle valuations.

Next, research comparable vehicles in your area to demonstrate that your car’s value is higher than the insurer’s offer. To research comparable vehicles in your area, you can:

  1. Visit websites that list used cars for sale, such as AutoTrader, Cars.com, or CarGurus. You can also check local classifieds or dealership websites for used vehicle listings.
  2. Search for vehicles similar to yours in terms of make, model, year, trim level, mileage, and condition. This will give you a better understanding of the current market value for your car in your area.
  3. Document your findings, including the listing prices and any relevant details about the comparable vehicles, to support your claim of a higher value for your car.

Present this evidence to your insurance company and request a reevaluation by:

  1. Writing a letter or email to your insurance company’s claims adjuster detailing your reasons for disputing the initial valuation. Attach copies of the documentation you have gathered, such as receipts, maintenance records, and comparable vehicle listings.
  2. Requesting a reevaluation of your vehicle’s value based on the new evidence you have presented. Be clear about your expectations and the desired outcome.

If the insurer remains uncooperative, consider hiring an independent appraiser or engaging in mediation or arbitration to resolve your totaled car disputes.

Consider the following options:

  • Hire an independent appraiser: Find a certified, reputable appraiser who specializes in vehicle valuations. They will provide a professional assessment of your car’s value, which you can then present to your insurance company as additional evidence.
  • Mediation or arbitration: If your insurance policy includes a provision for alternative dispute resolution (ADR), you can mediate or arbitrate the dispute. Mediation involves a neutral third party who helps both sides reach a mutually agreeable solution. Arbitration, on the other hand, involves a neutral arbitrator who hears both sides of the dispute and makes a binding decision. Contact your insurance company to initiate the ADR process, and follow their guidelines for selecting a mediator or arbitrator.

Do I Need an Insurance Lawyer?

Having legal representation from an insurance lawyer can be beneficial during insurance disputes. An attorney who specializes in insurance law can help you navigate the complex claims process, negotiate with the insurance company on your behalf, and ensure that you receive fair compensation for your loss.

If you are unable to reach a satisfactory resolution through negotiation, mediation, or arbitration, your lawyer can represent your interests in court.

LegalMatch can help you find an experienced insurance lawyer who can assist you with your insurance dispute. Our platform allows you to quickly and easily post your case details and receive responses from attorneys who are interested in representing you.

Once you receive responses, you can review each attorney’s profile, credentials, and client reviews to help you make an informed decision.

You can also schedule a consultation with the attorney to discuss your case in more detail and get a better sense of their approach and strategy.

Using LegalMatch can save you time and effort in finding the right insurance lawyer for your case, as we only match you with attorneys who have the relevant experience and expertise in insurance law. Our service is free to use, and you are under no obligation to hire any of the attorneys who respond to your case posting.

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