How to negotiate an insurance claim for total loss
When your car has a total loss, you must agree with your insurance company about how much your car was worth. Although you have good coverage, you probably will not be driving a new car soon.
There are two types of “surprises” most common to the insured regarding total loss. First case: Due to a collision the vehicle is damaged, but apparently it was not something so serious. However, the insurance considers a total loss. The insured is reluctant to accept because it believes the damage was only partial, not total. The second case: The vehicle is apparently destroyed, all crumpled, but it does not even bring total loss. In this case, the insured is indignant at seeing your car very destroyed and not receive full compensation.
In both cases, surprise and indignation stem from a lack of knowledge about the insurance criteria to classify the damage to the vehicle as a total loss. Knowing what the total loss is and knowing your criteria prevents unwanted surprises and guarantees your consumer rights in the insurance of your automobile.
What is Total Vehicle Loss ?
Total loss is when, based on the criteria we explain below, the insured receives full indemnity insurance. In these cases, there is no deductible, and the insured will receive the contracted percentage of the FIPE Table (in the event of coverage of the referenced amount) or fixed amount chosen at the time of insurance contracting (in the case of coverage of determined value).
What are the criteria to be considered a Total Loss?
The insurance considers total loss of the insured vehicle when the repair costs exceed 75% of the value of the car. This information is contained in the General Conditions of the policy, which are the contractual clauses of insurance.
Here are a few steps you must take to negotiate an insurance claim for total loss.
Learn the definition of total loss, which means that your car can not be repaired or worth less than the repair costs.
Be aware that your idea of fair value and the idea of your insurer can be drastically different. Remember that you have the right to a fair deal and the right to bargain to get one. A fair deal is to get the amount you need to buy a similar car or the same or similar model, from the same year and condition of your old car.
Require written a notice of what you have to do to re-open the claim if you can not find a car with the settlement money in 35 days. That also applies in case you find a replacement car that costs more than what the company gave you.
Keep records of any previous maintenance or repair, including cost. Although you do not make an eye-for-eye exchange, these repairs will contribute to the calculation of the actual cash value.
Hire an independent appraiser to work with the insurer if you disagree with the offer. Look at the yellow pages and find names and phones.
Seek professional help if you still do not agree to the agreement. You have two choices: an independent mediator or a lawyer. Both paths of action mean extra expenses. Before entering with arbitration or process, make sure it is worth the cost.