Negotiating With Insurance On Totaled Car

A person negotiating with a car insurance adjuster

You were just in a car wreck, but thankfully, no one was hurt. Unfortunately, the same can’t be said for your car, which is a total loss. So what now?

In situations where you’ve suffered injuries, the next best step once you’ve received immediate medical attention is clear: find a car accident lawyer who will fight for you. But what if you just want to make sure the insurance company fully compensates you for the loss of your vehicle? It may be time to negotiate.

You had a working vehicle when you started your journey. Whoever is at-fault for the accident that damaged or even destroyed your vehicle should make you whole – or rather, unless they were uninsured or underinsured, their insurance company should. We are here to provide our insight on how to negotiate with car insurance adjusters about your settlement.


What are some tips for negotiating your insurance settlement?

Fair market value guide book icon.Tip #1: Negotiating Fair Market Value

While the insurance company may use the value from a service like ValueScope to determine fair market value, you can negotiate with your own sources, such as the NADA guide. There is typically room to negotiate based on the actual condition and mileage of your vehicle, and adjustments by region if applicable.

Total repair cost icon.Tip #2: Negotiating Repair Versus Total

If you believe that your car cannot be adequately repaired, there is typically some room to negotiate. This is tied directly to fair market value – that number is driving everything that comes after. It may be difficult to get an insurance company to change its mind here, but it is worth trying if you believe you will not be left with a safe, functional, reliable vehicle after repairs are completed. Pursuing a diminished value claim may put you over the top.

Local market value icon.Tip #3: Negotiating Local Market Prices

It’s a good idea to do your own research into the pricing of cars similar to yours in your local market. You may find examples that the insurance company did not consider. The closer the example to your own car, the more leverage it may provide. If the insurance company is choosing base model vehicles, for example, and your vehicle had many options, you likely have a good argument for a higher price.

What to Expect After a Car Accident

In a car accident, the at-fault insurance company may accept responsibility for the damage to your vehicle and make an offer to settle the property damage claim. If the insurance company does not accept responsibility for their insured and refuses to compensate you, hiring an attorney is probably the smart move.

If the insurance company does not accept responsibility for their insured and refuses to compensate you, hiring an attorney is probably the smart move.

You will almost always deal with the at-fault driver’s insurance company through its adjuster in the insurance claim process. A claims adjuster works for the insurance company, and will review and negotiate your claim. Typically, part of the adjuster’s job is to try to minimize potential compensation for your claim in order to control costs for the company.

When the insurance company accepts fault, and makes an offer, this will either go towards the repair of your vehicle, or they may decide the vehicle was a total loss and pay you for the vehicle’s value.

Potential Issues When Dealing With the Car Insurance Company

We deal with insurance companies on a daily basis. Here are three common tactics some insurance companies may use as you seek fair compensation for your vehicle.


Insurance companies may not be in a hurry to pay you. In fact, you may not hear from them for days, weeks, or even months! And when they get in touch, they may ask for some documentation or evidence that they should already have. Keep calm and be patient. Delay tactics can cause people to settle for less than they deserve to “get it over with.” It can also put you in a real financial bind if the car isn’t drivable and you’re stuck without a way to work, or if your car is racking up storage fees at a tow lot and you can’t afford to get it out.


In a few cases, some insurance companies may outright deny your claim. This can be a strong-arm tactic, and may be the result of a perceived weakness in you or your claim. Some insurance companies may argue almost anything you do makes the accident your fault – even something miniscule like an officer thinking you were doing 1 mph over the speed limit. Don’t give up! If their insured was at-fault in the accident, they should compensate you. Refer back to the accident report, and press your claim.

Quick, Lowball Settlement Offers

On the opposite side of the spectrum from the first two tactics is when an insurance company tries to get you to take a low settlement offer immediately, despite that fact that it doesn’t cover your losses. This is more likely to be a problem in cases where the damage is light. The insurance company may be betting you’ll pocket the cash rather than fix the car. Don’t fall for it, especially if they claim it is “take it or leave it.” Take the time to get multiple estimates if your car is repairable – or find comparable cars for sale locally if it is totaled – to give you a basis to negotiate fairly. Often, the best bet is to have the insurance company pay the repair shop you’ve chosen directly.

Should You Take the Insurance Company’s First Offer?

That’s a judgment call. Most people don’t really know the value of their cars and therefore how much they’re owed if it’s a total loss. If you did not recently purchase it, you probably don’t know the market for it. However, you would know if it had a lot of problems, damage, mechanical issues, and so on. If you are well-informed, and satisfied with the insurance company’s first offer, then accepting it can be the right decision.

However, if you are not satisfied with the insurance company’s offer, you should arm yourself with information to negotiate with the insurance adjuster.

Can you negotiate with insurance adjusters?

Absolutely. The foundations for any good negotiation are a fair idea of what your car or its repairs will cost and patience. Be a good-faith negotiator. Document everything, and ask for documents in return. If the insurance company refuses to be fair or realistic in their offers to you, you may consider filing suit in a civil court – and remember, just because you file a lawsuit does not mean you’ll end up spending time in a courtroom.

How Do Insurance Companies Value Your Vehicle?

The insurance company looks at your car's fair market value when deciding to repair or total your car.To negotiate with the insurance company, you need to know how they work. They’re concerned with the pre-accident cash value of your car, sometimes called the “fair market value.” Fair market value is the price a willing buyer would pay a willing seller, when neither is being compelled to buy and/or sell, and both have reasonable knowledge about the relevant facts. When the insurance company accepts liability, this is the number they use to decide whether to offer to repair the vehicle or to total it.

When calculating repair costs versus value, insurance adjusters may use the National Automobile Dealers Association (NADA) publication, the “Official Used Car Guide,” to determine the fair market value. The NADA is published monthly and is available online at


When They Offer to Repair Your Vehicle

Car insurance companies may offer to repair a vehicle if the cost of repairs plus supplemental claims equals less than 75% of the vehicle’s pre-accident cash value. “Supplemental claims” include things like the projected rental vehicle costs during the repair period.

You should get multiple estimates for the amount of repairs your vehicle will need. You can look for highly-regarded repair shops and get their opinions and estimates. After you get the estimates and provide them to the insurance company, the insurance adjuster may make an offer.

If you don’t agree with the offer and the adjuster has never seen the damaged vehicle, then you can require the adjuster or the insurance company’s appraiser to personally inspect your damaged vehicle.

Where Can I Get My Car Repaired?

An adjuster may tell you they want you to take your car to a particular garage – typically, a garage with which they get a volume discount. However, you have the right to take your vehicle to any repair shop of your choosing.

When They Total Your Vehicle

The total loss negotiation process is straightforward. A vehicle is legally considered a total loss if the cost of repairs and supplemental claims equal or exceed 75% of the fair market value – which, again, can typically be negotiated. If your car is a total loss, and the insurance carrier accepts liability, they are required to pay fair market value for the vehicle.

In addition to using the NADA information, fair market value is often determined via a local market survey. Local fair market value must be determined by using either the local market price of comparable vehicles or, if no comparable vehicles can be found, quotes from at least two qualified dealers within the local market area. If your vehicle was in better-than-average condition prior to the collision, the adjuster is required to give due consideration to this fact when determining value.

The auto insurance company is not obligated to pay the full balance of an existing lien on the vehicle. If you owe more on the car than it is worth at the time of loss, all the insurance company has to pay is fair market value, not the payoff amount.

If you do not agree with the settlement offered by the adjuster, you have the right to request that the adjuster sends to you in writing the amount of the offer along with the specific policy provisions or legal basis the adjuster is relying on in support of the offer.

You should always require the adjuster to give you a written statement along with the total loss payment offer. This statement should include estimates, evaluations, and deductions used in calculating the payment, as well as stating the source of these values.

How Do I File a Complaint Against the Insurance Company?

Insurance agent working on car accident claim process with accident victim

If negotiations aren’t going well, you have options. If you have a complaint about an insurance company and the way they are handling your claim, you may call or write the Consumer Insurance Information Division of the North Carolina Department of Insurance. In South Carolina, contact the South Carolina Department of Insurance.

The Consumer Services Division will take information from you, and then an analyst from the Division will request information from the insurance company, agent, or adjuster. If the analyst finds that there is just cause for the complaint, they will then make a recommendation to both sides as to how to settle the situation.

If this does not resolve the problem, a deputy commissioner may arrange a conference with the insurance company involved to resolve the problem. If the conference does not resolve the disputed issue, then the deputy commissioner may recommend to the commissioner to take appropriate legal action, including a public hearing (filing a lawsuit).

Bottom Line

Our Recommendation: Generally No Need for an Attorney Unless You Were Hurt or Insurance Company’s Offer Isn’t Fair

At our firm, we recommend you handle most property damage claims yourself. This can save you both time and money. You do not want to unnecessarily delay the property damage aspect of your claim, and property damage claims typically are too low to justify hiring an attorney. If the insurance company just isn’t being fair, then consider involving an attorney.

However, if we represent you on a bodily injury claim related to the accident, we can handle any diminished value claim you may have.

Whatever the size of your case, our goal is the best representation and service we can provide. If you have questions or want to see if we can help, give us a call at 1-866-900-7078 or contact us online.
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About the Author

Michael Jordan is an attorney at the Law Offices of James Scott Farrin in North Carolina and has been practicing law for more than 20 years. Mike assists clients with their personal injury, workers’ compensation, eminent domain, products liability, medical malpractice, mass tort, and other cases. He’s a member of the American Association for Justice and the North Carolina Advocates for Justice (NCAJ), where he serves on the Legal Affairs Committee after previously serving on the Board of Governors. The NCAJ has recognized Mike’s active participation, service, and commitment by awarding him the “Order of Service” award most years since the award’s inception.