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How To Get The Most Money For Your Totaled Car

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Jeff Sevey

You were involved in an auto accident, and now you’re on the road to recovery. Your medical needs are being handled, but the insurance company has totaled your vehicle. Now what? How can you be sure that the amount they’re offering is legitimate? And when will you get your money?

These are all common questions and concerns after an auto accident wherein your vehicle sustained a lot of damage. In this article, we’ll discuss how to make sure the payoff you get from the insurance company is accurate and fair, and what your rights are if you feel the payoff is lacking.

Unfortunately, after an accident, a great deal of what happens to your car isn’t in your own’s in the hands of the insurance company paying for the damage. Of course, you do have a few options, and doing proper research after the accident will give you the greatest amount of control when it comes to getting the amount your car is worth from the insurance company if they deem your car “totaled”.

CCC Information Services has tracked auto insurance claims since 2002, and they’ve found that 12 to 14 percent of insurance appraisals after an accident will result in a total loss. Essentially, if you’re in an accident, you have a one-in-seven chance of having your car totaled as a result.

You certainly can’t take the accident back. So it is the smartest thing to do to be prepared and knows what your policy covers, and to what extent, before an accident even happens. This means getting the answers to questions before you actually need them. For instance:

  • How does the insurance company determine if a car is totaled?
  • Is there a certain formula used to determine the check amount?
  • Can you get a rental car through your insurance company? Is there a daily cost limit, or a time limit on a rental car?
  • If you don’t agree with the settlement amount, how can you go about challenging it?

It’s always better to be prepared, but if you’ve already been in an accident and your car has sustained significant damage, don’t worry. There’s still time to make sure the insurance company gives you a fair price for your car.

Each insurance company has their own way of determining if a vehicle is totaled, and coming up with a value for that vehicle. An insurance company bases a total loss on how much the car will cost to repair versus what they’d have to pay out on a total-loss claim. If the car would cost more to fix the damage than the current market value of the car, the insurance company will likely declare it a total loss. But the amount of damage to the car is relative to the type of car it is. For instance, an insurance company would choose to repair a two-year-old Porsche with $5000 in damage but would total a seven-year-old Ford Focus sustaining the same dollar amount of damage.

After your accident, check the California Department of Insurance website. Here you’ll find all the information you need on insurance claims, your rights as a consumer, and what the insurance company’s responsibilities are regarding your claim.

After the insurance company says your car is totaled, you’ll need to make sure that the check is based on the current market value of the car before the accident (minus your deductible), plus as an estimation of sales tax, registration fees, and title costs of a replacement.

The replacement cost of your vehicle can be researched by going to the Kelly Blue Book or the National Automobile Dealers Association and utilizing their car value calculators for consumers. You’ll need information such as your VIN number, year, make and model of the vehicle, option package, and any vehicle upgrades. You’ll also need to classify the condition of the vehicle - and don’t make the mistake of being dishonest with yourself. Represent the real condition of your vehicle before the accident so as not to artificially inflate what your car is worth.

By doing this research, when the insurance company offers you a settlement for the totaled vehicle, you’ll be able to have a realistic replacement cost. If you don’t do this research, how will you know if what you’re being offered is accurate and fair? The amount you researched should be in the same ballpark as what they offer you.

If you find that the amount the insurance company offers you is way off, you have the option to hire your own appraiser and file a dispute for the difference in appraisals (if, in fact, a difference is found). If you do choose to file a dispute, you will be responsible for the cost of the appraisal as well as at least some of the costs of arbitration with the insurance company. Take this into consideration, because with these additional costs, it may not be worth it to ask for arbitration.

You also have the option to decide to keep your car, and repair it yourself, or sell it off for parts. If you own your car (i.e. it’s completely paid off and you make no payments to a lender), this can be something to consider. Of course, you’ll want to let the insurance company know if you decide to keep it. They will deduct the car’s salvage value from the settlement amount, and issue a check based on the final amount.

The amount of time until you see a final check from the insurer will vary. It will be a couple of weeks at the very least and could run as long as two months. The period from accident to settlement check depends on whether there are any disagreements or challenges, and of course, any mediation will lengthen the time you wait to receive your check.

Overall, it pays to know what you’re up against ahead of time. But if an accident occurs, you still have time to make sure you’re getting just compensation for your vehicle. Do your research, advocate for yourself, and if you still feel that you’re not getting what you deserve, hire a qualified attorney to help represent you.

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