What To Do When The Insurance Company Totals Your Car - Lehto's Law Ep. 4.41

People often ask me what they should do when the insurance company is going to total their car. What steps should they take? And what can you do to avoid being ripped off.

[royfrench]

My father had an older truck he loved get hit once. The adjuster totalled it, even though it wasn't badly damaged. I easily fixed it for him with some used bolt on parts. For about 6 months the insurance company kept calling him demanding the title, so they could brand it as salvage and pay him. He didn't want a salvage title, so he wouldn't do it. They eventually gave up and sent him the check.
My dad has passed, but my brother is still driving that truck.

[williamthome]

Your car dealer can be a big help, I had a truck stolen that was less than a year old and when they found it the engine was stripped out of it. The insurance company lowballed me to the point of an insult . The insurance company said they could not find any comparables. My dealership found some and gave me a print out of them . The insurance company paid me almost what I paid for the truck.

[tony_orto]

Tip: If you have a rare, custom, or classic car, get special insurance with agreed value coverage. Hagerty or Grundy both insure classic cars.

[K.Kelly]

This has happened to me in NY (no fault state). Offered me $900 for my truck after hitting a deer. The adjuster was nasty on the phone, and told me my truck was worthless and I knew it.
I did my research. I found the fair mkt value was around $3500 +/-. PLUS, the company that was offering the $900, was a salvage company working for my insurance company. I found them online.
I called the nasty adjuster back. Told them what I found. I then told them, they could shop around my area, like I did, and they would find the true FMV of my truck instead of the salvage value... OR they could talk to my lawyer.
In 24 hrs they offered me $3800, minus my $500 deductible, so $3300. I asked the buy back price. $300. I bought it back. Kept the $3000. Spent $500 fixing the truck enough to make it drivable. Drove it for 7 more years. Then I GAVE it to a friend to use as a private property snow plow truck because his, same model, broke in half. His plow fit my truck perfectly!
WIN WIN WIN. It was a great truck. 1991 Chevy S15 Blazer. Total rust bucket. But ran over 350, 000 miles.

[ppft]

I have had two cars totaled. Each time I was low balled. I turned down 3 offers. You can count on getting screwed. The money you get will never get you an equivalent car. While researching Washington regulations I concluded they were written by the insurance industry.

[clifflandiss]

Steve, you are so right.
When my SUV was t-boned by someone who ran a stop sign, the damage exceeded the current value of the vehicle. Neither the police or the insurance company found fault with me. However, the insurance adjuster gave me two choices. One was to give up the vehicle and get a check, or keep the vehicle and get a smaller check (fees and so forth) which was half the cost of repair. Well, I kept the vehicle, took the check and my recent tax return back to the dealership who made the estimate for repairs for the insurance company. They repaired the vehicle and provided the state inspection which I used to get a "salvage" title. I then submitted it to the DMV and my insurance company and all was well right?
Not exactly, one day I get a call from a clerk at my insurance company regarding my policy, they want to reduce my insurance fees since the value of my vehicle had been reduced. I asked her why? Well wasn't it totaled. she asked? We don't insure totaled cars. I explained to her quite simply that the vehicle was not totaled, it was repairable per the estimate from the dealership. I explained to her that the phrase was "total loss" meaning the repair value exceeded the insured value of the vehicle. This was an accounting practice, nothing more.
Then I told her that the car been repaired by the same dealership that had provided the estimate, been inspected by the same dealership who was licensed to do so and a new title had issued by the DMV declaring it legal, i.e. roadworthy. Also proof of repair by that same dealership had been provided to the insurance company as a matter of course. At that point I told her that I would not authorize any change to my auto policy as I had followed the advice of the insurance adjuster who had been assigned to me. Reminded her that I had been a client over thirty years and did she have any questions?
After a brief moment, and a polite reply, we hung up. I never saw any inquiry in writing and my insurance fees remain the same.

[linuxgurugamer]

My wife's car was rear-ended last week and totaled. After reviewing this, I spent some time looking at the various sites to get a reasonable idea of the cost. Got the "offer" from the insurance company. Imagine my surprise when it is about $1500 HIGHER than the highest value I found. This on a 14 year old Camry LE model. I found one small mistake, they left out the sun roof, so I'll get back to them. But overall, very happy with the results. Goes to show that not all insurance companies try to rip you off

[jonathanbailey]

I'm in Virginia and my wife and I had a car totaled, due to a fire in the engine compartment. The insurance company found three comparable vehicles at dealerships to determine the value of the vehicle. Funny enough, the amount they offered us was $2200 more than we paid for the totaled vehicle.

[craigtiano]

State Farm tried to hustle me. Their "adjusters" claimed to be licensed automobile damage adjusters, and thus required to maintain a specific standard of ethics and follow a specific set of rules. After being given a ridiculous offer, I decided to check this claim. It turns out that licensed automobile damage adjusters in Pennsylvania cannot be employees of the insurance company. They have to be independent. So, I called the adjuster on my claim and asked for his license number, which he refused to give me. I spoke to his boss, who also claimed to be a licensed automobile damage adjuster. I asked for her license number, which she refused to give me. We went back and forth over the value of the car, with me telling them I wasn't going to accept their low offers.

Eventually, we reached an agreement on the value of the car after two weeks of daily negotiations and reading the adjuster the state statute requiring them to use a "publicly available" vehicle pricing service (not one run exclusively for insurance companies) and to find a comparable vehicle in the "same area" (not 120 miles away). But, that issue of being a "licensed" auto damage adjuster really stuck in my brain. So, I wrote a letter to the department of banking and insurance giving particulars.

I got a call from an investigator. He was incredulous. I asked him what office he worked out of (there are 2 in Pennsylvania, one in my office building). He worked in my building. I told him to stop by and I'd give him my notes, which were voluminous. He stopped by, looked it over, chatted a bit, and agreed to investigate it.

A month or so later, I got a letter stating that the investigation was complete, with no details given. I figured it was all for naught. Later, when I saw the investigator in the hall, I asked what happened as a result of the investigation. He said that State Farm had terminated the entire department, agreed not to do it again, and paid a fine. Ironically, both the boss and adjuster were both licensed, but lost those licenses as a result of the investigation and are now "black listed".

So, you CAN win against the insurance company, but you have to know what the law is to do it.

[twalrus]

About 15 years ago, I bought a used Caravan for $4, 000. Two years later we had a hail storm. The adjuster totaled the Caravan at $4, 000 and sold it to me at salvage ($600). So the adjuster gave me a check for $3, 400. The hail damage was on the top of the white van and was not visible at street view. You had to get on a ladder to actually see it. I was pretty happy. I put the $3, 400 in the bank and saved it for a down payment for when the van finally gave up the ghost. The van was still "street presentable" so I drove it for many years and by my way of thinking it only cost me $600.

[paulstaf]

Excellent advice as always. A friend of mine was in an accident and it wasn't her fault (Texas). The insurance company of the other party told her that her car was totaled and they offered her $1500. She was upset about it but was about to accept it. I went online to several auto sales sites and found several similar cars that were the same year and approximate mileage selling for around $3800. I printed off the listings and she contacted the insurance company and they cut her a check for $3400...she was ecstatic!

[jbtcajun]

The day of the incident do the research and print all info about the comparables. Once had a battle over a 2nd truck. After 3 months they tried using fresh comparables that were much lower. When I told them either they pay what I wanted or it was going to an attorney. They payed my first price but it was now 3 months later. Had I needed it daily or been paying on it they would have gotten me to cave. Insurance adjusters and car salesmen are the same; soleless willing to do anything for a extra buck. Personally I've never been that hungry.

[Dude]

I am an insurance agent/broker that stumbled across your channel and I enjoy your videos and don't have any problem with anything you have said yet. I hope you keep posting.

[cynthiascott]

Would you speak on summary claim by auto insurance company line item lowering vehicle value "Projected Sold Adjustment "

[HikingXCSkiing]

Thank you for this video. North Dakota has no fault insurance too. My 2014 Edge SEL AWD was t-boned with a NDAD value about 15K. The final repairs came to 12K which is 80% of the value. North Dakota requires 75% for a totaled claim. The insurance company valued the vehicle at over 20K. That makes it out of range for being totaled. The negotiations went over a month and I could afford a new vehicle, so I moved forward with my needs for a vehicle. My wrecked vehicle is now being repaired. As it turns out my son will be getting my repaired vehicle and it all worked out in the end. I was not expecting the games that insurance companies play. My own insurance company actually low-balled me with a 7K offer made out to the wrong repair shop and closed my case. The insurance company for the driver that t-boned me actually helped me more than my own company.

[CrimFerret]

You need to make sure you can show what extra factory options your car had (if any) because you should be entitled to the cost of a comparable car WITH at least those options, not the lowest end base model.

[chrisk]

Great info. Your comment about area of the country is correct. For example I bought my daughter an AWD car in Florida because she was going to college in Maine. The car was totaled in the Boston area and I got more than I paid for it because it was worth more in the northeast than Florida because it was an AWD vehicle.

[bml]

I had a 15 Mustang that got totaled not by another driver, but by God. A tree fell on it. It needed a quarter panel, trunk lid, 1 window, and 1 tail light. They put the value at 18K by taking the asking price of 3 cars of the same model/year that were for sale at local dealers and averaging the amount. The cost to repair was around $14k. I had taken it to a dealer's body shop one of their recommended ones. The problem I had was that I didn't think it needed as much work as the shop claimed. For example, they said you can't cut out the quarter you have to replace the entire section which goes around the door to the A pillar, and in doing that you have to replace the roof panel because its welded to the door frame and you can't separate them....same thing with the rocker panel. But i thought they gave me a good price for a 2 year old V6 model with 35k miles and I let them have it. It was a gorgeous car though but the build quality wasn't that great.

[kennethrich]

Awesome video Steve. I was hoping you would touch on the subject of buying back a vehicle that was just totaled by your insurance at a great price.

[jeffbutler]

Been in insurance 20 years. Spot on advice. 1 th ik ng to add, is that insurance will not pay for your finance fees. You buy a car for $30k and they pay you $25. They don't owe for the amount you are upside down.