When you have the right coverage, your insurance company will conclude your car is totaled when it determines the cost to repair is more than the car is worth. Generally, an insurance company in North Carolina reaches that conclusion when the cost of the required repairs plus salvage value exceeds 75% of the value of the vehicle. At that point, the insurance company will usually offer you a check for your “totaled” car in the amount of its actual cash value immediately before the collision.
Although the insurance company will pay you the actual cash value of the car, it is usually not obligated to pay for taxes, title costs, and other expenses you will incur when purchasing a new vehicle. If you think replacing your car might cost considerably more than its actual cash value, you may wish to purchase add-on coverage like new car replacement or gap insurance.
As of the date of this article, we are currently seeing purchase prices much higher than usual. This means that when insurance companies declare a car totaled we see a direct financial strain for our clients. Sometimes insurance companies will work with us when totaling the damaged car is a close call.
Insurance Companies Want to Pay You as Little as Possible
Regardless of how the insurance company values your car and how highly you value it, remember that the insurance company is in the business of making profits. It achieves that goal by taking in more premium dollars than it pays out in claim dollars. In other words, the insurance company always wants to pay you as little as possible. Some of the ways they will try to do so follow.
They May Deny Your Claim Completely
One of the easiest ways for an insurance company to save money on your claim is to deny it in its entirety. There are several ways to do that in North Carolina. First, they may deny coverage entirely. That is a battle that will almost certainly require you to retain an attorney. Second, they may argue you were contributory negligent, i.e., that you were partly at fault for the accident. If you don’t have the right coverage, that can be a big hurdle with the insurance company and require an attorney to fight for you. North Carolina is one of only five jurisdictions in the United States that still follow the contributory negligence rule. Under that theory, if you were at all at fault in an accident, you will be barred from any recovery. There are arguments that you can make back, including arguing that the other side had the last clear chance to avoid the accident, but, in the end, a successful contributory negligence claim can have a devastating effect on your recovery.
In order to assist them in denying the claim, the adverse insurance company will seek to have you make a recorded statement as soon as possible. You, however, are not required by law in North Carolina to participate in a recorded statement. However, your insurance company may require you to under your policy. But before you do and given the risks of virtually anything you say being used against you for a finding of contributory negligence, it is probably better to work with an experienced attorney and avoid the recorded statement.
They May Undervalue Your Vehicle
When a vehicle is going to be totaled, the insurance company claims adjuster will not focus on the damage to your vehicle. Rather, the company will obtain an appraisal representing what would have been a reasonable cash offer for your vehicle immediately before the accident. One way to estimate this figure is to look at the 20 to 40 percent fair condition value of your car is in the Kelley Blue Book.
It is sometimes possible to argue with your insurance company about the value it has assigned to your car. Perhaps the vehicle is, for some reason, worth more than the book value. If you think so, you must submit documentation such as mileage records, your service history, and even affidavits from mechanics who will state that your car was, for whatever reason, worth more than a typical car of its make, model, and age.
To negotiate the amount of the payout, you will want to engage in several steps, including:
- Find out your vehicle’s actual cash value (ACV); compare your insurance company’s definition of ACV to what you were able to find out
- Use online car valuation sites to help find your ACV
- Look for advertisements for vehicles like yours for sale
- Include information about any out of the ordinary features, equipment, or condition issues
Remember, a car accident attorney does this kind of negotiating day in and day out and may manage it more effectively than you. In any case, you or your attorney should contest the insurance company’s valuation if you it is not treating you fairly in light of the factors that make up the actual cash value of your car.
They May Try to Argue that You Were Partially at Fault for Your Accident
As discussed above, one of the easiest ways for an insurance company to avoid paying a claim in North Carolina is to claim that you were partially at fault in the accident. Under the doctrine of contributory negligence, if you were even 1% liable in the accident, your claim can be completely denied leaving you with no recovery at all. This rule is one of the reasons that working with skilled counsel can be so important. When you speak directly with the insurance company, you may inadvertently make a completely innocent statement that can be treated as an admission of your negligence. An attorney may help you to ensure your statements are not taken out of context and used as an alleged admission of contributory negligence. This will help you preserve your rights.
An Attorney Can Protect Your Rights
Insurance company lawyers and adjusters are not your friends or advocates. They work for a company whose primary goal is to pay you as little as possible. Your own attorney, knowledgeable and skilled in the claims process, will focus on protecting you and your rights and obtaining the largest settlement possible for you. Your attorney will work to keep you from making statements that can be taken out of context and ensure that you are not bullied into making a risky recorded statement. If the worst happens, your attorney can sue the insurance company on your behalf, a result which insurance companies generally prefer to avoid.
Call Us Today to Schedule a Free Consultation with a Wilmington Car Accident Lawyer
If your car was totaled in North Carolina, and you are struggling with an unfriendly insurance company settlement process, an experienced car accident attorney can help you reach your best possible settlement. Contact us today or call 910-490-4247 for a free initial consultation.
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