How to Negotiate the Value of a Totaled Car With an Insurance Company

When you have a car accident, your insurance is there to help support you financially to help repair or replace your car. But what happens when you and the insurance company don’t see eye to eye with the value of your car? When you get an estimate from your insurance you don’t feel is high enough, it’s time to negotiate the value of your totaled car.

What is a Totaled Car?

When you have an accident, there is a chance that the repairs to your vehicle will exceed the value of the car. This is when a car is considered “totaled” by an insurance company. Another term you may here is “total loss“.  However, there are some exceptions to the rule. For example, in Alabama, there are laws that state a car may be totaled when the damage is greater than 75% of its value. In that case, if a vehicle is worth $10,000 and the repair estimate is $8,000, the vehicle would likely be considered totaled.


In most cases, the insurer determines whether a vehicle is considered a total loss, not the car owner.

What is the Value of Your Car?

There are many factors that need to be taken into consideration when it comes to valuing a car. This will include its age, condition, mileage and the resale value. For example a new Tesla should be getting close to the full value if it’s totaled in an accident. This is all in addition to the selling price of similar vehicles in your area.


It is also important to remember that the parts of your car have value. Even if the car cannot be driven again, it is possible to sell off the parts to a salvage yard or junk it and make some money. If the parts that can be resold are upgrades, such as expensive alloy wheels, this will add more value to the car than the standard items.

Tips for Negotiating

Adjusters valuation– As part of the process, you are entitled to see a copy of the report. If it is not offered to you, ask for a copy of the adjuster’s evaluation report. It is important to make sure that they have used comparable vehicles when estimating the cost of repairs


Do your homework– It is important to know what the replacement value of the car would be. You will also need to be able to show this information to the adjuster as proof and back up your claim.


Receipts for improvements– If you can find them, it is a good idea to show copies of all after-market improvement receipts. If you have replaced the standard wheels with custom wheels, altered the exhaust system or have paid for a custom paint job, this all adds value to your car. If you have photographs of the improvements or any evidence of the improvements, make copies of these as well.


Get an independent appraisal– The insurance company will have their own appraiser who works for them. It is their job to get the insurance company the best possible deal for your car. It is possible for you to hire your own appraiser if you feel the settlement offer is low.


Ask what the criteria is– Always ask your insurer to justify their offer and ask what criteria they have used to value your vehicle. You can also ask for a copy of the engineer’s report, detailing how they have valued your vehicle. With this information, you can see how they have come to their decision and you have more opportunity to question their decision. 


Ask a mechanic–  If you feel that the engineer’s report is not reflecting the value of your car, you can get your own mechanic to make an assessment. This can work in your favour as they might have a log of the work that they have carried out on your vehicle over the years.


The emotional toll– There is a good chance that your car is your only mode of transport and that you need it for any number of reasons. If you have an emotional reason for using your car, for example, you take your sick mother to her hospital appointments, you might be able to push the cash offer up a bit higher.


Head to court– If you feel the offer is too low and the insurance company does not want to budge, you could start court proceedings. This might sound like an extreme to take but it might get the insurance company to make a better offer. It is in their best interest not to waste their time with court proceedings so they might be more willing to up their amount.


As you can see, there are many different ways that you can bring a strong argument to the table and negotiate the value of your totaled car with your insurance company.