Insurance Not Paying Enough for a Totaled Car. What Do I Do?

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The insurance company is totaling your car. You’ve done the work to file the insurance claim and get damage estimates. Then, your settlement offer arrives.

You’re surprised and disappointed. The offer is too low.

If the insurance company is not paying enough for a totaled car, our experienced Apex car accident lawyers explain what you can do.

What Can I Do if Insurance Is Not Paying Enough for a Totaled Car?

Your options may include:

  • Providing more information and asking the insurance company to reconsider
  • Reviewing a detailed statement of how the calculation was determined
  • Claiming through your collision and comprehensive policy
  • Using an independent appraiser to referee the dispute
  • Taking your case to court

What you can and should do depends on the circumstances. The experienced Apex car accident lawyers at Horton & Mendez Injury Attorneys can help with your case.

Understanding How Insurance Companies Calculate a Total Loss

In North Carolina, a vehicle is a total loss when the cost of repair equals or exceeds 75% of the value before the accident. The threshold is the Actual Cash Value (AVC) of the vehicle before the accident. If repairs exceed 75% of the ACV, the vehicle is totaled.

When a damaged vehicle meets the threshold, the insurance company must designate the vehicle as a total loss and pay the pre-accident value. The insurance company gets possession of the salvage with legal title unless the owner elects otherwise.

ACV is based on the local market area, meaning comparable vehicles within a 100-mile radius. A comparable vehicle is the same make, model, and year of the damaged vehicle. If there aren’t any within 100 miles, the radius may be expanded.

See 11 N.C. Admin. Code § 4.0148.

Why Your Insurance Payout May Be Lower Than Expected

Your insurance payout may be lower than expected for a totaled vehicle because of depreciation. Cars depreciate over time. As they become older, mileage increases, there is wear and tear, and parts become worn. When a car is in an accident, it may be worth significantly less than it was when you bought it.

The other factor that may make your insurance payout lower than expected is a deductible. When the claim is through your collision or comprehensive policy, there may be a deductible. You won’t be reimbursed for that amount.

Steps To Dispute a Low Insurance Settlement Offer

North Carolina regulates how insurance companies settle totaled car claims.

First-party claims

A first-party claim is a claim against your own insurer, typically through your collision or comprehensive policy. You may dispute a low settlement offer by providing additional information.

Alternatively, you may resolve the claim with the appraisal provision. This part of your insurance policy allows you to select your appraiser. The insurance company selects an appraiser, too. A referee reviews the two appraisals and decides who they agree with, and this becomes the binding amount.

Third-party claims

A third-party claim is against someone else’s insurance, typically who is at fault for the accident. If you disagree with a third-party insurance payout for a totaled car, you may provide more information or file against your own comprehensive and collision coverage.

If you file through your own comprehensive and collision coverage, your insurance company may subrogate from the at-fault party’s insurance company. Subrogation means your insurance company seeks reimbursement from the other insurance company. The case may still end up in court, but it’s no longer your fight. You receive your compensation from your own insurance company, and they sort things out with the other company.

Negotiating your insurance payout for a totaled car

If you can’t agree with the insurance company about the actual cash value of the vehicle, the settlement should be based on published regional averages of substantially similar vehicles, including two or more similar vehicles in the local market. If there are no comparable vehicles, you may use quotes from local vehicle dealers.

Evidence to dispute a car totaled insurance payout

Sometimes, comparable vehicles don’t tell the whole story. You may provide additional evidence of value, including:

  • Condition of the vehicle
  • Options
  • Equipment
  • Mileage
  • Unrepaired previous damage

You may submit receipts, photographs, appraisals, comparable listings, maintenance records, and other documents.

Request a written statement

When a settlement deviates from state regulations for valuing totaled vehicles, the insurance company must explain, itemize, and document the departure. You may request a written statement, which explains the calculation.

Can I agree with the insurance company not to salvage the vehicle?

No. The insurance company may not agree to keep the repair cost below 75% to avoid salvage.

I’ve heard about better car replacement. Can I get that for a totaled car in North Carolina?

You may have seen commercials for better car replacement insurance. When applicable, these policies pay more than the actual cash value of a vehicle. The purpose is to allow the person to replace their vehicle with something a little newer, even though the totaled vehicle has probably depreciated since purchase. This insurance is not available in North Carolina.

How To Obtain an Independent Appraisal for Your Car

Some companies will do an independent car appraisal for you. In addition, websites like Kelley Blue Book and Edmunds will estimate value based on your input.

Notes:

Don’t forget other insurance coverage you may have. Medical payment coverage may apply, regardless of fault. There are no official guidelines for how pain and suffering should be awarded in North Carolina.

You may have gap insurance, but it is not mandatory in North Carolina.

Contact an Experienced Apex Car Accident Lawyer

If your insurance isn’t paying enough for a totaled car, contact an experienced Apex car accident lawyer. Horton & Mendez Injury Attorneys represent people who are in car accidents. Contact us to discuss your case and get help today.

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