5 Ways to Get a Fair Car Insurance Settlement

A recent report by Clearsurance.com revealed five tips for negotiating the best insurance settlement following a vehicle being declared a total loss.

No one wants their car to be damaged, and they’re certainly not hoping for their car to be totaled, but it could happen. Without insurance coverage, a vehicle owner could be left to absorb the financial loss on their own.

Even with insurance coverage, many vehicle owners receive an unsatisfactory settlement offer.

According to Clearsurance.com, a vehicle is declared a total loss when it has damage that would cost over 80% of the car’s value to fix. Some insurers set a lower threshold.

Clearsurance.com’s Top 5 Tips for Settlement

These five tips will help vehicle owners receive a fair settlement. 

The Vehicle’s Value Is Critical

When an owner knows and can prove their vehicle’s value, they can make an argument for a claim settlement that adequately reflects that value.

The features included on a vehicle and the condition of the vehicle are critical aspects to consider when determining value. Owners may need to request a list of features from the dealer where they bought the car.

Preparing a Counteroffer 

Before receiving an unsatisfactory settlement offer, the vehicle owner can prepare a counteroffer. A counteroffer will be taken more seriously if it includes data to back it up. Owners should include printed NADA and Kelley Blue Book value. 

Clearsurance.com also recommends including receipts for service and improvements, including new tires, that were completed within the past eight months.

Comparable Local Vehicles

Kelley Blue Book may publish a vehicle value that doesn’t resonate with the reality of the car market in a particular area. Owners can argue for their counteroffer by using the going price of similar vehicles in their area.

Review a Written Settlement

A written settlement should include the following items:

• Sales tax —  The insurer is responsible for paying the state sales tax.
• Payoff lien amount —  The amount to be paid directly to the lender for outstanding vehicle loans.
• Net settlement amount  —  The amount the owner will receive from the insurer.

Vehicle owners should ensure that the written settlement contains accurate information, including the vehicle features and mileage.

Present a Counteroffer

As a vehicle owner goes through the settlement process, they should add data to their counteroffer at every step. Once they’re finished researching, it’s time to contest the car insurance payout with a counteroffer.

Options for a Totaled Car

If a vehicle is declared a total loss, it will be assigned a buy-back value. The owner can accept a settlement check from the insurance company and buy the vehicle back at the determined price. 

For certain types of damage, buying back the vehicle may be a good option for vehicle owners. Melanie Musson, a nationally recognized car insurance expert with Clearsurance.com, explains, “Totaled cars with cosmetic damage only can provide years of reliable service to their owner. In these situations, buying back a vehicle can be an excellent option.”

The Impact of Driving a Car With a Salvage Title

If a vehicle has a salvage or rebuilt title, its value will be drastically reduced, but the financial impact extends beyond that. Getting car insurance can be challenging. Some insurers won’t write a policy for full coverage if a car has a salvage or rebuilt title. 

Still, some insurers will, so if an owner is looking for full coverage, they should shop around until they find a provider willing to write that policy. 

Most car insurance providers will cover liability for a salvage vehicle, but they may charge higher rates.

Car Insurance Following a Claim

When a vehicle owner files a claim with their car insurance provider, whether that claim ends in vehicle repair or the vehicle being declared a total loss, the owner can expect to pay higher insurance premiums for two or three years following the claim. 

Read Clearsurance.com’s full report here: 5 Tips to Negotiate the Best Settlement for My Totaled Car.