How To Negotiate a Total Loss Car Insurance Settlement
When it comes to a total loss car insurance settlement, negotiating the settlement of your vehicle can feel intimidating. In order to know you're getting what you deserve in your total loss car insurance settlement, you will need to figure out your car's actual cash value (ACV). Once you do, you will want to submit an official demand letter to your insurance company if the settlement amount you're being offered is hundreds or thousands of dollars less than what your car is worth.
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Travis Thompson
Licensed Insurance Agent
Travis Thompson has been a licensed insurance agent for nearly five years. After obtaining his life and health insurance licenses, he began working for Symmetry Financial Group as a State Licensed Field Underwriter. In this position, he learned the coverage options and limits surrounding mortgage protection. He advised clients on the coverage needed to protect them in the event of a death, critica...
Licensed Insurance Agent
UPDATED: Jun 29, 2023
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Our car insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different car insurance companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about car insurance. Our goal is to be an objective, third-party resource for everything car insurance-related. We update our site regularly, and all content is reviewed by car insurance experts.
UPDATED: Jun 29, 2023
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident car insurance decisions. Comparison shopping should be easy. We are not affiliated with any one car insurance provider and cannot guarantee quotes from any single provider.
Our car insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different car insurance companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
On This Page
- If you have a full-coverage policy, your car insurance company will pay you for the value of your car so long as the reason it is totaled is considered a covered event
- Determining your car’s actual cash value (ACV) will help you negotiate your final settlement with your insurance company
- A full-coverage policy on your vehicle will ensure you receive a settlement check if your car is declared a total loss
Being in a car accident can be frightening and stressful. And the aftermath of the accident may not be any less frustrating. If your car is declared a total loss by your car insurance company, you will have some decisions to make. But if you have a full-coverage policy, your car insurance company should pay you for the value of your car — provided the incident is considered a covered loss.
When your car is declared totaled, your insurance company will cut you a check for whatever your car is worth. But what if your car is worth more than your insurance company is offering to pay? Learning to negotiate a total loss car insurance settlement can help you in this situation.
What is a total loss car insurance settlement?
If your car is considered totaled after a car accident, your insurance company may end up paying you whatever your vehicle is worth. The process of deciding how much to pay you and cutting you a check is considered a car insurance settlement.
During the total loss settlement process, car insurance companies employ car insurance adjusters to determine the actual cash value (ACV) of your vehicle. Once your car insurance company knows how much your vehicle is worth, that exact amount will be presented to you as the amount you will receive in a settlement check.
In some cases, the number your car insurance company comes up with will be close to what you’re expecting — or even more. But you may encounter a situation in which your insurance company decides to pay you less than what you believe your car is worth. In this case, you will want to negotiate with your insurance company.
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How do you negotiate a car insurance settlement?
In order to learn how to negotiate with car insurance adjusters about your car’s total loss, you will need to know how much your vehicle is worth.
Many people use a total loss car value calculator or an insurance total loss payout calculator to determine how much their vehicle is worth and predict what their insurance company will offer in terms of a settlement. You can use different online calculators to help you determine your car’s ACV, but your insurance company may consider these calculators subjective.
Another way to determine your car’s actual value is to search online for the same make and model of your vehicle — and a similar condition, if possible — and see how much your car is selling for. If you find dealerships or individuals who have your car listed for a price that is higher than your insurance settlement, this could help you negotiate with your insurance company.
Will a car insurance company pay more for a total loss settlement?
Once you determine your car’s ACV, you need to make some decisions. If that value is almost exactly what your insurance company is offering you, or if it’s a bit higher, it’s a good idea to take the settlement your insurance company is offering.
But if your Geico total loss payout — or your payout with any car insurance company — is hundreds or thousands of dollars less than what your car is worth, you will want to send an official demand letter to your insurance company. In the letter, you will need to highlight the nature of your car accident, any personal injuries associated with the accident, and the settlement amount for your car’s ACV.
Most experts agree that you should request anywhere from 25% to 100% more from your insurance company than what you’re actually willing to accept, but this is ultimately up to you. You will need to submit your demand letter in writing or via email, but it’s also a good idea to speak with a representative from your car insurance company to let them know your decision.
When will I know if my insurance company accepts my demand letter?
Waiting to hear back from your insurance company after you submit a demand letter can be frustrating, and it’s reasonable for you to reach out to your insurance company if you have not heard anything in a few weeks.
Ultimately, your insurance company is responsible for settling your claim and paying you for your car’s actual value. The goal of any company is to accomplish this as soon as possible. There’s a chance you may have to have multiple conversations with an insurance adjuster or with a representative from your insurance company before you get a final word on how much your insurance company is willing to pay.
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What type of insurance is best for a total loss settlement?
If you are not at fault for your car’s total loss, the person who was considered at fault in the accident will be responsible for your settlement. In this case, the money you receive for the value of your car would be offered by that person’s insurance company, and you would not need more than a liability-only policy.
But to make sure you are covered in the event of a total loss, you will need to have a full-coverage policy on your car. Full coverage includes both comprehensive and collision insurance, which will cover your car if you’re in an accident, your car is stolen, or your car is damaged by inclement weather.
The table below shows average rates for car insurance based on coverage type in each state.
Average Annual Cost Difference Between Full Coverage and Liability Coverage Car Rates Insurance by State
| States | Average Annual Full Coverage Rates | Average Annual Liability Only Rates | Total Annual Rate Difference |
|---|---|---|---|
| Idaho | $679.89 | $344.29 | $335.60 |
| Iowa | $702.46 | $299.18 | $403.28 |
| Maine | $703.82 | $338.87 | $364.95 |
| Wisconsin | $737.18 | $374.37 | $362.81 |
| Indiana | $755.03 | $382.68 | $372.35 |
| Vermont | $764.02 | $343.12 | $420.90 |
| South Dakota | $766.91 | $300.22 | $466.69 |
| North Dakota | $773.30 | $298.18 | $475.12 |
| Ohio | $788.56 | $397.11 | $391.45 |
| North Carolina | $789.09 | $359.42 | $429.67 |
| New Hampshire | $818.75 | $400.56 | $418.19 |
| Nebraska | $831.02 | $364.64 | $466.38 |
| Virginia | $842.67 | $425.61 | $417.06 |
| Wyoming | $847.44 | $321.04 | $526.40 |
| Kansas | $862.93 | $358.24 | $504.69 |
| Montana | $863.52 | $386.29 | $477.23 |
| Alabama | $868.48 | $394.21 | $474.27 |
| Tennessee | $871.43 | $413.91 | $457.52 |
| Missouri | $872.43 | $415.88 | $456.55 |
| Utah | $872.93 | $497.53 | $375.40 |
| Hawaii | $873.28 | $458.54 | $414.74 |
| Minnesota | $875.49 | $456.82 | $418.67 |
| Illinois | $884.56 | $446.72 | $437.84 |
| Oregon | $904.83 | $584.13 | $320.70 |
| Arkansas | $906.34 | $394.13 | $512.21 |
| New Mexico | $937.59 | $488.03 | $449.56 |
| Kentucky | $938.51 | $529.21 | $409.30 |
| Washington | $968.80 | $596.67 | $372.13 |
| Pennsylvania | $970.51 | $499.06 | $471.45 |
| Arizona | $972.85 | $508.76 | $464.09 |
| South Carolina | $973.10 | $527.09 | $446.01 |
| Colorado | $981.64 | $520.04 | $461.60 |
| California | $986.75 | $489.66 | $497.09 |
| Mississippi | $994.05 | $460.50 | $533.55 |
| Oklahoma | $1,005.32 | $461.01 | $544.31 |
| West Virginia | $1,025.78 | $491.83 | $533.95 |
| Alaska | $1,027.75 | $539.68 | $488.07 |
| Georgia | $1,048.40 | $557.38 | $491.02 |
| Nevada | $1,103.05 | $681.56 | $421.49 |
| Texas | $1,109.66 | $528.75 | $580.91 |
| Maryland | $1,116.45 | $609.74 | $506.71 |
| Massachusetts | $1,129.29 | $606.04 | $523.25 |
| Connecticut | $1,151.07 | $650.94 | $500.13 |
| Delaware | $1,240.57 | $799.30 | $441.27 |
| Florida | $1,257.13 | $857.64 | $399.49 |
| Rhode Island | $1,303.50 | $759.80 | $543.70 |
| District of Columbia | $1,330.73 | $628.82 | $701.91 |
| New York | $1,360.66 | $804.51 | $556.15 |
| Michigan | $1,364.00 | $795.32 | $568.68 |
| New Jersey | $1,382.79 | $869.57 | $513.22 |
| Louisiana | $1,405.36 | $775.83 | $629.53 |
| U.S. Average | $1,009.38 | $538.73 | $470.65 |
If you are able to pay for full coverage on your vehicle, it may be in your best interest to do so. This way, you will know that you’ll receive a settlement check from your insurance company to help you figure out what you want to do next.
Case Studies: Negotiating a Total Loss Car Insurance Settlement
Case Study 1: The Underestimated Value
In this case study, John’s car was declared a total loss by his insurance company after an accident. However, the settlement amount offered by the insurance company was significantly lower than the actual value of his car. John decided to negotiate the settlement and conducted thorough research to determine his car’s actual cash value (ACV).
He collected evidence of similar cars being sold for higher prices and submitted a demand letter to his insurance company, requesting a higher settlement amount. After multiple conversations with the insurance adjuster, John successfully negotiated a fair settlement that reflected the true value of his car.
Case Study 2: The Persistence Pays Off
Sarah’s car was also deemed a total loss, but she felt that the initial settlement offer from her insurance company was inadequate. She engaged in a negotiation process, providing supporting evidence such as repair estimates and market prices for comparable vehicles.
Despite facing initial resistance from the insurance company, Sarah remained persistent and continued to advocate for a higher settlement. Her determination paid off when the insurance company finally agreed to increase the settlement amount, ensuring she received a fair compensation for her car.
Case Study 3: The Legal Assistance
In this case study, Michael sought legal assistance to negotiate his car insurance settlement. He hired an attorney who specialized in insurance claims to represent him. The attorney navigated the claims process on Michael’s behalf, gathering evidence, assessing the true value of the car, and presenting a strong case to the insurance company.
With the expertise of the attorney, Michael was able to negotiate a significantly higher settlement than what was initially offered, ensuring he received appropriate compensation for his total loss.
Case Study 4: The Comparative Market Analysis
After his car was declared a total loss, David conducted a comparative market analysis to determine the fair value of his vehicle. He researched online listings and found similar cars in the market with higher price tags. Armed with this information, David approached his insurance company and presented his findings, arguing that the initial settlement offer did not align with the market value of his car.
Through effective negotiation and the support of his comparative market analysis, David successfully secured a higher settlement that reflected the true worth of his vehicle.
Case Study 5: The Timely Resolution
Emily’s car was declared a total loss, and she was initially offered a settlement by her insurance company. However, she felt that the offer was lower than the actual value of her car. Emily promptly submitted a demand letter outlining her case, including details of the accident, supporting evidence of her car’s value, and a requested settlement amount.
To her satisfaction, the insurance company responded promptly and agreed to increase the settlement, leading to a swift and mutually agreeable resolution.
Frequently Asked Questions
How To Negotiate a Total Loss Car Insurance Settlement
Dealing with a total loss car insurance settlement can be a stressful and confusing experience. Here are some tips to help you negotiate a fair settlement:
- Know your car’s value: Research your car’s value using online tools like Kelley Blue Book, NADA, or Edmunds. This will give you an idea of what your car is worth.
- Review your insurance policy: Check your policy to make sure you understand your coverage, deductibles, and limits. This will help you determine what you’re entitled to under your policy.
- Provide documentation: Provide documentation of your car’s condition before the accident, such as maintenance records, receipts for recent repairs or upgrades, and photos.
- Don’t accept the first offer: Insurance companies often start with a low settlement offer. Don’t accept the first offer, but negotiate for a fair price.
- Be persistent: Negotiating a total loss car insurance settlement can be a long process, but don’t give up. Be persistent and continue to negotiate until you get a fair settlement.
- Consider hiring an appraiser: If you feel that the insurance company’s offer is unfair, you may want to consider hiring an independent appraiser to assess the value of your car.
- Get everything in writing: Once you’ve agreed on a settlement, make sure you get everything in writing, including the amount of the settlement, the terms of the settlement, and any other details.
Remember, negotiating a total loss car insurance settlement can be a challenging process. But with the right preparation, persistence, and documentation, you can ensure that you receive a fair settlement for your car.
What should I do if I receive a low settlement offer from my insurance company?
If you receive a settlement offer from your insurance company that is lower than what you believe your car is worth, you have the option to negotiate with them. Provide evidence such as comparable vehicle prices or repair estimates to support your case and ask for a higher settlement offer.
Can I hire an attorney to negotiate my car insurance settlement?
Yes, you can hire an attorney to represent you and negotiate your car insurance settlement on your behalf. An attorney can help you navigate the claims process and ensure that you receive a fair settlement offer.
How long does the negotiation process take?
The length of the negotiation process can vary depending on the complexity of your case and how much evidence you have to support your claim. It can take anywhere from a few days to several weeks to negotiate a car insurance settlement.
What if I don’t agree with the settlement offer even after negotiation?
If you do not agree with the settlement offer even after negotiation, you can file a complaint with your state’s insurance department. They can investigate the case and help you reach a resolution.
Enter your ZIP code below to view companies that have cheap auto insurance rates.
Secured with SHA-256 Encryption
Travis Thompson
Licensed Insurance Agent
Travis Thompson has been a licensed insurance agent for nearly five years. After obtaining his life and health insurance licenses, he began working for Symmetry Financial Group as a State Licensed Field Underwriter. In this position, he learned the coverage options and limits surrounding mortgage protection. He advised clients on the coverage needed to protect them in the event of a death, critica...
Licensed Insurance Agent
Editorial Guidelines: We are a free online resource for anyone interested in learning more about car insurance. Our goal is to be an objective, third-party resource for everything car insurance-related. We update our site regularly, and all content is reviewed by car insurance experts.