How to Fight Your Insurance Company Over a Totaled Car

How do I fight my insurance company after I totaled my car? If you’ve been in an accident or some other event that caused your car insurance company to total your car, make sure you know your options. Read this guide to learn tips to negotiate and fight for your car’s total loss assessment value and how to find car insurance quotes.

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Jul 16, 2021

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  • Some states protect policyholders from being forced to take substantially low total loss settlement amounts
  • Auto insurers determine if a car is totaled based on assessments of its value against the damage.
  • The Total Loss Formula equals the cost of repairs plus the scrap value of the car.

After you’ve been in a major accident, you’ll likely have many questions. One popular one may be, “How do I fight my insurance company after I totaled my car?”

After you’ve been in a major accident, you’ll likely have many questions. One popular one may be, “How do I fight my insurance company after I totaled my car?” After you’ve been in an accident, the last thing you want to worry about is losing your car. If you’ve been in an serious accident you could run into two major issues with total loss:

  • Your insurance company is declaring a total loss, but lowballing the value of the car
  • Your insurance is trying to repair extensive damage, but you’re concerned about problems later on with things that aren’t properly fixed

Either way, negotiating total loss vehicle value is an option. You can be your own best advocate. You don’t have to be a professional car mechanic or insurance auditor. There are resources available to average citizens to help you make informed decisions about your auto claim. 

A “total loss” is a term meant to describe the instances of when the cost to repair your vehicle is more than it is worth. Learn total loss settlement tips and more in this guide.

Before learning more about what to do after totaling your car, compare affordable car insurance rates now by entering your ZIP code into our FREE quote tool.

How Do Insurance Companies Determine The Value of A Totaled Car?

If your insurance company wants to total your car, it likely came to this claim due to an assessment through a third-party assessor or adjuster.

What is car insurance for a totaled car?

The value appraisal is based on your vehicle’s condition or state right before the accident, rather than at the time of purchase. This is referred to as the actual cash value of your car.

When an insurer decides your car is totaled, it’s usually based on these factors:

  • Your car cannot be safely repaired.
  • Repairing the car costs more than the car is worth.
  • State laws that require the company to call your car a total loss due to the level of damage.

If your car seems to be right on the edge (it would cost about the same to repair or replace it), an auto insurance company may err on the side of caution and declare it a total loss. This is to account for the likelihood of damage that’s not immediately apparent to the body shop.

This is called a total loss threshold. These percentages are based on the Total Loss Formula (TLF), which equals the cost of repairs plus the car’s scrap value. There are some states that use this formula, and there are others that set their percentage payouts.

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What Is The Total Loss Threshold in Your State?

The automobile total loss threshold for all 50 states is:

Total Loss Threshold for Totaled Vehicles per State
StateTotal Loss Threshold Rules
New Hampshire75%
New JerseyTLF
New MexicoTLF
New York75%
North Carolina75%
North Dakota75%
Rhode IslandTLF
South Carolina75%
South DakotaTLF
West Virginia75%
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These estimates don’t consider auto loan or lease balances. They also assume you have collision coverage if you’re at fault or the other policy has basic coverage if you were not at fault.

Besides, you can collect the cost of sales tax, title, and registration in 34 states:

States Where You Can Collect the Cost of Sales Tax, Title, and Registration
New Jersey
New York
Puerto Rico
West Virginia
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Even if you live in a state that doesn’t require this payment, you can ask.

Okay, so where are these numbers coming from?

How Is a Car’s Actual Value Determined?

The value, or actual cash value, of your car, is determined by your insurance company and its assessors long before you actually get into an accident. There are algorithms and market values. If you bought your car new or used as opposed to restoring a salvage vehicle, you could be entitled to more. Even if the repairs were approved by a reputable organization, fair market value on a salvage car will always be lower. Other factors considered include the car’s make and model year, the condition it’s in, its miles, etc.

More than likely, the insurance company will reference databases (such as Kelley Blue Book) when assessing the value of your car.

How Much Will You Get from Insurance for A Totaled Car?

You will likely get the amount equal to the valuation of the assessment. You can estimate this for yourself by taking the KBB value.

If your vehicle is in at least fair condition, count on deducting between 20 percent and 40 percent from that amount in the database. You should expect to receive an amount on the lower end of this spectrum.

If your vehicle has pre-existing scratches or other damage, it could be deducted from the estimated repair cost. The aim of auto insurance is to make you whole, which means restoring you to where you were before the accident. Auto insurance isn’t meant to pay you extra. If you purchased additional coverage, though, you may get enough to replace your car with one that’s a year newer depending on your policy.

Keep reading to learn more about how you can negotiate the total loss value assessment.

Do You Have to Take The Total Loss Settlement from The Insurance Company?

When drivers disagree with insurance total loss claims, they don’t have many options. You can 1) take the car insurance payout, 2) try to negotiate (with hard evidence), or 3) get a lawyer involved. This doesn’t mean you have to take the payout. On the contrary, if you believe you should get more from your insurance policy, you can challenge the decision.

If your insurance is not paying enough for your totaled car, consider what your vehicle is worth and what you’re able to replace your vehicle with. Look up market values, and be realistic about the condition of your car.

You can fight a bad appraisal or negotiate a total loss car insurance settlement, but how do you fight a total loss claim?

You need to come to your insurance company with your research. Show your driving history, how well you maintained the car before the accident, or that the repairs are not more than the vehicle’s value.

When looking at the repairs and costs to fix up your car, assessors compare it to how much your car is actually worth.

So if the cost to repair your car is more than 50 percent of your car’s value before the accident, the car insurance company will total your car. Some insurers will total vehicles as high as 80 percent.

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Can insurance companies force you to total your car?

Your insurance company may declare your car a total loss after an accident, but you have the option of keeping the car if you choose. The amount you get from the insurance claim is limited. Insurance won’t pay you more than the actual cash value of your car, and that may not be enough to repair your car. You also need to consider the cost of a replacement vehicle while your car is being repaired. Depending on your policy, you may be limited if you choose to keep a total loss vehicle. 

Most companies will ditch the car for auction. If you let your auto insurer take the car and send it to auction, you can recoup your car at salvage value. This will impact the general use of your car. Until it’s certified with certain repairs, you won’t be able to register or drive it on roads.

Can I buy my totaled car at auction?

You should be able to keep your car after it’s been totaled. If not, the car insurance company will salvage the vehicle. You can recoup your car at salvage value; this will impact the general use of your car. It’s possible a vehicle with a salvage title can’t be driven as a daily car.

This means that you will need to rehab your vehicle completely and get it inspected before you could ever drive it again — all out of your pocket.

So, if you think your car is worth saving, or at least the repairs are less than 50 percent of the cost, you will need to learn how to negotiate with your company about your car’s total loss value.

What happens if you don’t agree with a total loss adjuster?

If you’re trying to figure out how to negotiate or get more money from your car insurance company for a totaled car, always look at your collision coverage first. Do you have enough coverage to justify a higher payout? If not, it may not matter what the car is worth. You’ll only get a payout up to your policy limits.

If you do have the coverage, it may be as simple as a conversation. You can ask your adjuster to go over how they came to your estimate or to expand on their research and what models they were comparing your vehicle with. This also gives you the chance to make your case on the fair market value of your car.

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Can you negotiate with your insurance adjuster?

You may think of your insurance adjuster’s job as simple: they’re there to help you get paid. Unfortunately, an adjuster’s job is much more complicated than that. Much like an underwriter, their job is to assess the damage and protect the company from unnecessary loss.

You may be able to work with your insurance company, but you won’t be results just because someone likes you. You will need to fight with good evidence for your totaled car.

Follow the next section as it lays out tips and guidelines for how to negotiate a total loss insurance claim.

How do you negotiate your insurance on a totaled car?

There are several ways you can get a better valuation of your car based on what you believe it is worth it. Many times, you don’t really need to fight your insurance company for your totaled vehicle, but remind them of what they need to do.

It’s just a matter of knowing the appeal process and who to speak to. The insurance industry can be intimidating, and the claims process is not necessarily better with cheap car insurance. Whenever you’re talking to an insurance provider, you should come in prepared with facts.

How Can You Appeal A Total Loss Claim?

First, you should contact your insurance company to follow the right procedures and avenues to get your appeal heard by the right people. You won’t get a fair settlement just by talking to a call center agent. Even if you can convince your adjuster, they may need to get approval from another party. 

Second, know that your car insurance company is obligated to pay out your vehicle’s actual cash value based on your agreed-upon policy coverage.

Here are other settlement tips to remember as you negotiate your total loss claim:

  1. If you’re fighting a low-ball offer, it could be considered unethical practices in your state. Some places protect policyholders from being forced to take substantially low total loss settlement amounts
  2. If you feel you’ve been forced into an appraisal, your car insurance company could be violating good faith agreements between itself and its client (i.e., you)
  3. Your car insurance company cannot withhold any benefits from you or delay payments
  4. Don’t forget to confirm your agreement in writing
  5. If you want to understand more about the damage, you can also call repair shops

These tips lead to the general idea that auto insurers must be fair the determination of the value of your car.

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Do Your Research

If you feel you are being cheated by your car insurance company, don’t forget you can fight the total loss of your car. Independent appraisals have become more common. In many cases, it doesn’t need to get that complicated.

Make sure you keep a good record of your vehicle and compare its pre-accident condition to similar cars in the area. If you have questions about why they’re bringing in a lower value, don’t be afraid to ask. 

Documentation of this and maintenance history will help you negotiate a fair deal for the settlement amount of your totaled vehicle.

Don’t forget you can sue your insurance company if you feel that you are being treated unfairly. If you feel this is the stage you are at, enter your ZIP code to get legal advice from someone in your area.

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