After being involved in a crash, many people find out that the insurance company has deemed their vehicle a total loss. This can be a very stressful situation. If you are driving a newer car that is still financed, you worry that the insurance company’s offer won’t fully cover the amount remaining on your loan. For people whose cars are paid off, they worry that the amount they receive won’t be enough for them to purchase a comparable vehicle.
In Colorado, insurers are required to pay the fair market value for a vehicle deemed to be a total loss. Fair market value is the amount that you could have sold your vehicle for, prior to it being involved in the crash.
If you learn that your car is a total loss, you should immediately start looking at online auto sales sites for the same make and model of your car. Focus your search on cars in your area with similar mileage and added features. Assemble enough information to give you a general idea of the price of comparable vehicles in your area. If you can, save or print everything you find. When the adjuster calls you to make an offer, you should already have a fair price range in mind. Once they make an offer, they will generally only give you a few more days in a rental vehicle, so being prepared is very important.
If the adjuster makes an offer that you believe is unfair, be prepared to provide them with the documents you located showing sales of comparable vehicles in your area. Also, if you recently added anything new to your car or had any mechanical work completed, have the receipts available to give to the adjuster. Most adjusters will reevaluate their offers if you provide sufficient evidence for a higher value.
Many insurance companies use outside services to assemble data for total loss offers. When you receive an offer for a totaled car, you should always ask the adjuster for a copy of the report they used to determine their offer. This is especially true in a situation where their offer is lower than the price range you discovered during your research. Once you receive the report, go through it very carefully and make sure it lists truly comparable vehicles. If you believe the report did not use comparable vehicles or that it unfairly deducted value from your vehicle, you should call the adjuster to review the report. Again, some adjusters will reevaluate the offer if you provide evidence of a flaw in the report.
Unfortunately, many people with newer cars find themselves in a situation where they owe more for their vehicle than the fair market value. If you find yourself in this situation, you should review your purchase documents to see if you bought gap insurance when you purchased your car. If you have gap coverage, it can be used to cover the difference between the fair market value and the amount you owe on your vehicle.
Finally, if you are working with your own insurance company regarding a total loss, you should review your policy and become familiar with any appeal processes they might have in place should you disagree with the final offer they make on your claim. Make sure you follow any appeal procedures outlined in your policy.