How to Negotiate Your Car’s Value after an Accident

After getting into a damaging car accident, there will come a time when you will need to seek compensation from an insurance company. The process of receiving a fair payout can be tricky, however.

After all, insurance companies lose money when they are forced to pay out for an accident. A claims adjuster for a company wants to pay you the smallest amount reasonably possible for your damages.

Determine the value of your car

Knowing the true value of your car is vital when negotiating with an insurance company. After you get into an accident, the car will be sent to a claims adjuster who will determine how much it will take to repair it.

>> OTHER RESOURCES: How an accident affects your car insurance rates

Depending on the type of claim it is, first-party benefits or third-party benefits, you will either deal with your own company in the case of the former or another driver’s company in the case of the latter.

With the adjuster having an incentive to not pay the full amount in either case, knowing the true value of your car will tell you if you are getting a good deal or not. We recommend you collect estimates from several sources.

Luckily, there are several sources who can help:

You do not need to accept whatever figure the adjuster comes back with if it does not match the estimates you have received.

Negotiating with the car insurance company

If the initial offer is below the estimates, you will need to enter negotiations with the insurance company. Does that mean a lawsuit? Not necessarily. It is in both sides’ interest to avoid the cost of continued litigation.

This means you can negotiate with the insurance company before any formal court proceedings. They do not want to bring the matter to court any more than you do.

When you enter negotiations with the insurance company and/or claims adjuster you should have a desired settlement in mind, as well as a minimum settlement you will accept. Your high and low numbers should reflect the estimates you have from the Internet and your mechanic. As negotiations press on, you will want to keep a level head and objectively weigh the strengths and weaknesses of their justification for their offer.

“Betterment” and the value of your car

One thing an adjuster can argue against is “betterment”. If your car is fairly old, it may need new parts to repair it, making the car more valuable than before the accident. Most insurance companies will either charge you for the excess value or reduce their payment in proportion to the increase.

Betterment will be hard to argue because essentially you are asking for the insurance company to pay more than what your car is worth. To counter their betterment charge, you will need to prove that the parts will not in fact increase the value of your car. Testimony from your mechanic or an expert witness could help in this case.

The state you live in affects how fault (and value) is determined

Another issue that can diminish your claim is the state where you crashed your car. Payouts from third-party claims like bodily injury or property damage liability depend on who was at-fault in an accident, which in turn is dependent on the state where you had the accident.

In Washington D.C., Maryland and North Carolina, for instance, the law calls for Pure Contributory fault determination. In these states, a driver needs to be 0% at-fault to receive any compensation, which is a very high standard.

Other states, like Georgia, are a bit more lenient and only require you to be less than 50% at-fault for an accident to receive compensation. Car insurance in California pays out proportionally, meaning you receive compensation based on the percentage of your fault in the accident, even if it was 11% or 89%.

In negotiations, the insurance company may want to prove you were more at-fault than you are claiming to reduce their payout. To counter them, it is important to go into negotiations with as much information as possible. Police reports, photos and witness testimony can be solid pieces of evidence to help prove your innocence in an accident.

More tips for getting a higher value for your car

After agreeing to a settlement

After negotiations are over, you’ll need to confirm the offer in writing.

It does not have to be extensive, just detailed enough to outline the amount of the settlement and what it is repairing.