Updated: Jun 12, 2022
So the insurance company tells you that your beloved car is totaled, but what they are offering in settlement is not enough to replace it with like kind and quality. This can be frustrating.
I have been in the insurance business for some 35 years, and I still can't figure out how exactly the insurance companies determine the value of the car after it is deemed a total loss. There isn't a transparent source that they rely on, and their algorithms typically come up with a value that is lower than what you were expecting.
If you want more money for your car than what the insurance company has offered you, then the onus is on you.
Get ready to negotiate. Start by jotting down any unique features of your vehicle that may not be known to your insurer. For example, you may have put new tires on it just before the loss, or the car may have immaculate service records etc. Then refer to an industry source such as the Kelly Blue Book to see how they value your vehicle. Remember this is just the start as KBB wouldn't know that your car had brand new tires, or whether your car was always garaged. Know that in these post COVID times, car prices have jumped through the roof. It's just supply & demand. Due to lingering supply chain issues, new car supplies are backed up, and used cars are in more demand. Additionally, the recent surge in gasoline prices has people scrambling to get their hands on a fuel efficient hybrid or an electric car.
Insurance company algorithms don't always keep up with all these market dynamics. Mainstream insurance companies are slow to adapt to any market or consumer trend, or to the simple realities of life, for that matter. They still won't insure legal marijuana shops, for example, and try getting car insurance if you aren't comfortable choosing between the two given sex options (Male/Female) on the insurance application.
Know this and prepare your case. Check online sources such as Craigslist or Autotrader etc to see what similar cars are actually selling for today. It also helps to visit the website of a large national chain such as CarMax. Don't rely on just one listing, instead check out a variety of cars, and figure out the average market price. Then build your case as to how your vehicle compares to the ones listed online. If you have an insurance agent, which I hope you do, then involve them in this process. There is strength in numbers! I once had a mechanic who was very familiar with the customer's car give a statement as to how well it had been maintained. It made a world of difference.
Try not threaten the claims adjuster with legal action or worse. They have a pretty thick skin, and such language falls on deaf ears. Emotional rants also don't work on them, and they don't care that you have been a customer for 20 years. They are trained to interpret policy contract language, and crunch numbers. Not much else. They do, however, appreciate you doing your homework, and making their job easy.
Once you have collected the necessary information, present it with your counter offer. Yes, give them a solid number. But, between you and me, leave some room for negotiation. In all my years of experience, the adjusters end up accommodating the insured when the argument is well prepared, and backed by supporting evidence.
Your friendly demeanor also goes a long way!