How to Negotiate a Total Loss Car Insurance Settlement

When navigating a total loss car insurance settlement, consider how you can get more value out of your vehicle. Since most states set the percentage for total loss car insurance settlements around 70% to 80%, you can get a general idea of where the repair cost needs to be under. Many of the most valuable total loss car insurance settlements will be because you pointed out the extra value in your car's cosmetics and additional parts.

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Rachel Bodine graduated from college with a BA in English. She has since worked as a Feature Writer in the insurance industry and gained a deep knowledge of state and countrywide insurance laws and rates. Her research and writing focus on helping readers understand their insurance coverage and how to find savings. Her expert advice on insurance has been featured on sites like PhotoEnforced, All...

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insurance...

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Reviewed by Leslie Kasperowicz
Farmers CSR for 4 Years Leslie Kasperowicz

UPDATED: Jan 23, 2022

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What You Should Know

  • The total loss percentage is set by each state, with some leaving the calculations up to the insurer
  • You may be able to get a second opinion to lower the repair cost and leave the total loss designation
  • If you have additional cosmetics or non-stock vehicle parts, you may be able to negotiate for a higher settlement

If you’re negotiating a total loss car insurance settlement, you’ll likely want to get the best value from your vehicle. There are many options to either decrease the cost of repairs or to increase how much you receive from the settlement. You can maximize your totaled vehicle by obtaining a policy with the best auto insurance companies.

If you’re in the midst of a total loss auto insurance settlement, you should enter your ZIP code into our free quote tool to determine what you could save with a different insurer.

How do I negotiate a total loss auto insurance settlement?

If your car has been designated a total loss by your insurance company, it’s likely a stressful time. With the loss of a vehicle, you’ll need to navigate the insurance company’s payment process and purchase a new car. Luckily, your insurance company will pay out the value of your vehicle when it’s totaled, so that you can use those funds toward your new automobile.

Here are a few potential reasons why a life insurance company might total your car:

  • The car is worth less than the repair cost
  • A mechanic cannot repair the vehicle safely
  • A law exists that states a total loss percentage

In order for your car to get repaired and for the insurance to pay for it, the repairs will need to be less than the car’s value, and the mechanic will have to perform the repairs safely. In addition, there are other cases where your vehicle may be designated a total loss due to a law in your state that requires repairs to be a certain percentage less than the car’s value.

Even in states that don’t have specific percentages for a total loss, you can expect to comply with it when the cost of the repairs is more than the vehicle is worth.

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Can I negotiate during the total loss settlement process?

You might be wondering how to negotiate with car insurance adjusters about a total loss car. If you’re holding out hope that you can change your insurance company’s mind through negotiation, you might be disappointed. Although, that doesn’t mean you’re out of options when your car is deemed totaled.

If you think you were quoted too high for repairs, you can always obtain a second opinion from another mechanic. If you can get a reputable mechanic to provide you lower repair quotes, your insurance company may see more value in repairing the vehicle. The repairs would have to fall under the total loss percentage for either your state or your car’s value.

After your car is totaled, you may be able to negotiate a higher payout with your insurance company. Since your vehicle has depreciated, the insurance company won’t compensate you for what you initially paid for the vehicle. According to The Law Offices of Anidjar and Levine, you can negotiate a higher payout if your car has any of the following upgrades:

  • Improved audio system (non-stock radio and speakers)
  • Add-on cosmetics like spoilers
  • A remote starter
  • New paint or wrap
  • Recently acquired tires

Anything you’ve added to the car that costs a significant amount of money will be something you can mention during the settlement process. Prior to obtaining a new vehicle, you’ll want to ensure that you get the most value out of your old one. Therefore, understanding auto insurance is vital.

What is a total loss in auto insurance?

When your car is designated as a total loss, it has been deemed irreparable by your insurance company. That doesn’t mean it is incapable of being repaired, but your insurance company won’t be paying for it. Instead, the insurance company will pay you the value of the car they’ve determined from the total loss car value calculator.

This goes for any insurance company, whether or not it’s a Progressive or a GEICO total loss payout. This means that no matter where you get a policy, your car can be designated a total loss, and you may only receive the current value of the vehicle.

How much will insurance pay for a totaled car?

Suppose your car is a total loss issue and you’re not at fault. The insurance company will pay you the value of your vehicle. However, the payout won’t be what you originally paid for it; rather, it will be lower to reflect the car’s depreciation. As mentioned above, you may be able to negotiate a higher payout.

The insurance total loss payout calculator may devalue your car, but custom parts and cosmetics may be able to help you receive more in the long run.

When does an insurance company decide that a car is totaled?

Depending on your local laws, the insurance company will decide that a car is totaled when the repairs cease being worth the cost of the vehicle. This limitation is determined by state governments and varies from 70% to 100%. Some states don’t use a percentage but let the individual insurers in the state use their formulas.

When your car is totaled, it means that the insurer will no longer pay for any repairs to the vehicle. Instead, it will send you money that you can use toward a new automobile.

How do totaled car determinations differ between states?

As mentioned above, each state decides when to designate a car as a total loss. State governments set the percentage or leave it up to the insurer to give a fair chance to all drivers. If the insurance company decided on the total loss formula, nothing would stop them from changing percentages between drivers.

The percentages of a total loss state can differ across borders. Some examples of the varying total loss percentages are as follows:

  • Tennessee – 75%
  • Minnesota – 70%
  • Oklahoma – 60%
  • Texas – 100%

As you can see, each state can decide when to consider a vehicle a total loss. Some states, like Oklahoma, prefer to sit on the lower end of the scale, while Texas requires that the repairs surpass the vehicle’s value before actually paying out the total loss amount.

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Is it possible to keep a totaled car?

In most cases, if you prefer, you should be able to retain a totaled vehicle. However, if it were totaled in an accident or otherwise on the road, you’d have to get it moved back to your home at your own expense. You will also need to cover any repairs to the vehicle, although the payout should help.

Unless there are laws in your state against keeping a totaled car on your property, you should be able to retain a totaled vehicle that is registered under your name.

Total Loss Auto Insurance Settlement: The Bottom Line

Navigating a total loss auto insurance settlement can be nerve-wracking. However, it’s wise to remember that you have options when dealing with a total loss vehicle. For example, consider getting a second opinion on repairs or documenting any extra equipment you had installed in your car. That way, you can ensure you’re receiving the best value for your totaled vehicle.

If you’re looking for insurance after a total loss auto insurance settlement, enter your ZIP code into our free quote tool to determine what you could pay for a policy today.

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