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Wednesday, June 5, 2013

Simple Trick to Get More Money for Your Totaled car.

Negotiating your total loss.

Dr. Alan Himmel

If your car was totalled in a car accident, do you have to accept the first offer that your insurance company makes?  I think not.  Most people do accept the first offer, however, by doing this, they may be leaving a good amount of money on the table that belongs to them.  Over the years, I have helped many patients get more money when their car was deemed a total loss.  You don't need to be a master negotiator, nor do you need to be a lawyer to do this.  There is a trick, and I will tell you how it works:

First, it helps to have some knowledge of the way insurance companies process claims.  I happen to be a licensed public insurance adjuster, aside from being a chiropractor, so I have some first hand knowledge of this procedure.  You have to know that most auto insurance companies process property claims based on what's called Actual Cash Value or ACV.  What this term basically means is that the insurance company will value your property based on what the current market rate is for that particular property.  You just ask yourself, "what would I have to pay right now today, to replace this car?" This little piece of valuable information regarding ACV is written into your policy.  It's in the boring part that most people never read.

Here is an example of the way ACV works:  If you buy a car in 2003 for $20,000, and you file a claim for a total loss of that car in 2013, provided you have coverage, the insurance company will use a system of multiple sources to determine what it would cost to replace that same exact car, now, in 2013.  So, unless you got a banging deal on that car, or its a one of a kind collector's car, most likely the car is worth less than the $20,000 that you paid; the car has to be worth less because of 10 years of depreciation.  Their system will determine what the market price in your area is for that car.

Now, there are a few things to consider here:  You must consider the deductible on the policy.  If you are filing the claim through your own policy, you most likely have a deductible and that would be subtracted from the amount they determine the car is worth.  If you file through the at fault carrier, then there is NO deductible.  The claim is paid at 100%.  Next, the insurance company has to pay you the applicable tax on top of the amount they decide to pay you.

So, here is a breakdown.   Hypothetical numbers:

2003 Car purchased for $20,000.00
2013 Car total loss
2013 ACV of the car is    $4,500.00
Policy deductible  is          $ 500.00
Carrier pays                   $4,000.00
Applicable Tax is               6% (FL) or $240.00

Carrier sends a check for $4240.00

Okay, here is the simple trick that works, in my experience, at least 75% of the time to get more money:  What you simply do is look in as many places as possible including the autotrader, the classified ads, and the flyer and try to find your car with similar mileage and specs, for a higher price than what the insurance company is paying.  You then clip those ads.  Get as many as you can find but if you only find 2 or 3, this may be enough.  Next, you need to forward the ads to the claims adjuster showing that in YOUR market, it would be impossible to replace the car for what they allowed.

Sometimes I have seen that the insurance company is actually very fair with their allowance, and sometimes believe it or not, the insurance company is actually pays more than what it would cost to replace. In either of these cases, just take what they are allowing. (Don't try and negotiate down!)

Like I have said.  About 75% of the time it works out in your favor and you can expect to receive a supplemental check in the mail of sometimes over $1000.

Better in your pocket than theirs.  Good Luck.

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