Let's say you were in a serious accident. The damage to your car was significant. The insurance carrier says repairing the damage will cost too much. They decide to total the car.
If this were to happen, the auto insurance carrier would likely offer you a settlement amount to get a new car. The settlement amount is the amount the insurer says the vehicle is worth at the time of the crash.
What if you don't agree to this amount offered? In this case, you may have some recourse in overcoming the losses.
Here's what to consider.
How Much Is The Car Worth?
To determine how much your policy will pay out, look at your documentation. Determine if you have replacement value or cash value coverage. Replacement value will cover the cost to replace the vehicle with one like it. Cash value pays out only the value of the vehicle at the time of the incident.
Your car insurance company will pay only as much as the policy limit, which is set at the time of purchasing the policy. However, the insurer will determine the worth of the car at the time of the accident. If it is not worth the total value of your policy, the insurance company may not pay as much.
What If You Do Not Agree?
It is possible you will not agree with the auto insurance carrier on the value of the car. When the insurer determines it is a total, they will offer you a settlement value. You may be able to negotiate for a higher value. To do this consider a few tips.
- Gather information about the value of your car at the time of the accident. Use this information to help show the insurer your vehicle has a higher worth.
- Use photos to help show the condition of the car prior to the accident. If you have these, they can be very valuable.
- Use maintenance or other repair records to verify the value of the car.
- If you made significant upgrades to the car, gather receipts to show this. It will help encourage the insurer to work with you.
- Have an appraiser provide insight. If you have a rare, limited edition, or otherwise high valued car, have it appraised routinely.
The more information you have, the more the car insurance carrier can use to create a better price for you. This may or may not help you.