If your car was damaged as the result of a motor vehicle accident, you will inevitably be dealing with an insurance company when trying to recover for the loss. Typically, the insurance company will try to pay you as little as possible for the vehicle. Most individuals do not realize that you do not have to blindly accept the amount the insurance company says your car is worth. You should absolutely negotiate this amount and push back until you receive a fair price. If your vehicle was totaled, the below tips are a useful resource in helping you negotiate a fair settlement with the insurance company.
1. Ask for the Analysis/Valuation: The first step in negotiating a property damage settlement of a motor vehicle is understanding how the insurance company arrived at the initial amount it is offering. Most, if not all, insurance companies use some sort of valuation program. These programs take comparable vehicles in the area that recently sold, or that are for sale, and use these as “comps” to determine what your car is worth. Your vehicle will be compared to these cars and then the value will be adjusted up or down depending on mileage, additional features and condition. For example, if a comp vehicle does not have leather, but your vehicle does, your vehicle will receive a dollar amount increase for the extra value the leather interior is worth. Likewise, if your vehicle has more mileage than a comp vehicle or is in worse condition, your vehicle will receive a dollar amount decrease.
2. Check the Analysis/Valuation for Accuracy: Once you have received the analysis/valuation, make sure to review it for accuracy. It is not uncommon for insurance companies to use the wrong vehicle information. For example, the insurance company may not list the proper options for your vehicle. The insurance company may even have the wrong model number, wrong options package or wrong mileage. Make sure that the insurance company is using the correct information for your vehicle and has included all options your vehicle has (tow package, tint, custom wheels, leather, navigation, back up camera, DVD, etc.). All factory upgrades should be listed as well as any after-market enhancements. If any options are not included, prepare a list to provide to the insurance company.
3. Check the Subjective Information in the Analysis/Valuation: Every valuation has a subjective component where the insurance company assigns a condition to different aspects of your vehicle. Usually, someone working for the insurance company will examine your vehicle after the collision and rate what condition it was in. This includes an analysis of the interior (seats, interior door panels, glass, dash, headliner); exterior (body, trim, paint, vinyl); and mechanical (engine, transmission, tires). The insurance company will usually assign a value of 1-5, with 5 being excellent and 1 being poor. Once these values are assigned the insurance company will decrease or increase the amount they say the vehicle is worth based upon its condition. It is not uncommon for insurance companies to regularly assign values to the condition of your vehicle that are far less than its actual condition. Make sure you examine the condition the insurance company assigned to your vehicle and prepare a list of the areas of which you disagree.
4. Examine the Comps Used and Find your Own: Make sure to evaluate the comps used in the analysis/valuation to determine if they are appropriate, ie. correct vehicle, model, year, etc. However, even if they are correct, do not rely on them. Make sure you seek out your own comps by finding vehicles within 100 miles of where you live that have the same features as your vehicle. A good resource is Autotrader, Cars.com or Kelly Blue Book or any other third party resource that lists cars for sale. If the value of your comps are higher, prepare a list to forward to the insurance company.
5. Obtain Recent Repair Receipts and Records: If you have had recent repairs to your vehicle that are over and beyond routine service, make sure to organize this information and provide it to the insurance company. Some repairs and the replacement of certain parts may be compensated as they increase the value of your vehicle.
6. Negotiate the Value of Your Vehicle: After you have completed all the above steps, prepare a letter to the insurance company explaining why the valuation it provided does not accurately reflect the value of your vehicle. Make sure to provide all the reasoning, lists and documentation in support. If the information you provide is correct, the insurance company will have little choice but to increase the original offer it provided you. Make sure to negotiate the amount they should pay based upon the information you provide. In all likelihood, they will run a new valuation with the addition information you provided and you will be entitled to the increased amount.