How To Negotiate A Total Loss Insurance Claim


When a bad accident or natural disaster takes place, you may suffer what insurance companies call a “total loss.” A total loss occurs when the thing that is insured cannot be fixed. The entire value of the insurance policy must be cashed in to allow the owner access to whatever he or she lost in the accident. Most commonly, people suffer a total loss when they get into a vehicle crash. The reason people say their car has been “totaled” is because it represents a total loss. While you might think this would be easy, prompting an insurance company to open up its coffers and pay you what you are owed, you would be wrong. Suffering a total loss can often be the first step in a long and arduous process.

You must be prepared to negotiate if you have a total loss that needs an insurance remedy. If the amount is big enough, as with a large house fire or damage to a very expensive asset, some people will call up a law firm. The idea behind this is that a savvy, experienced law firm can often provide enough assistance to create value for clients who would otherwise have to deal on their own with a tough insurance provider. Some who know how to negotiate choose to attack the situation on their own. While this is an acceptable option, you should have a plan when you start the negotiating process.

Discovering your actual cash value
The insurance provider is under no requirement to give you the replacement value of your vehicle. They will instead have to provide the actual cash value. This will almost always be less than what it would cost to go out and buy the car again. However, you should be fighting for every dollar you can get, so having a good sense of your actual cash value is a must if you’re going to negotiate. You should first consult with people in the car business to determine what your car would sell for if it had not been wrecked. You might check the Kelly Blue Book to get a sense of this, too. By knowing your actual cash value, you can negotiate from a position of knowledge.

Negotiating from a place of strength
Make it clear that you’re willing to do what it takes to get the appropriate value
Insurance companies often short their insureds because they believe those people will take no recourse. These providers trust that you will complain a bit but take whatever check they end up cutting on a total loss. After all, you will likely need the money to come up with at least some replacement. However, insurance providers are more likely to play fairly if they know you will enlist a law firm unless things are fair. In many states, insurance companies are under special laws about fair dealing. A lawsuit can be expensive for them to defend, and they are more likely to deal fairly with you if you show them you mean business.

Negotiating a total loss insurance claim means understanding the actual cash value of your property and letting the company know you expect to be compensated properly. Letting them know you do not intend to back down will change the tenor of the ordeal. Don’t be bullied by their tactics, and if you have to enlist the help of a law firm to put some legal pressure on the insurer, don’t hesitate to make a phone call.