Insurance Not Paying Enough For Totaled Car – Home » Injury & Accident Law Blog » Insurance Doesn’t Pay Enough for a Totaled Car, What Do I Do?

You were recently in a car accident in North Carolina, and the insurance company says your car was totaled. This stance means, basically, that your insurance company thinks your car isn’t worth repairing, usually when it believes the repairs will be 80% or more of the car’s value. Instead of fixing your car, they may offer you another equivalent car or a cash payment. If you think the settlement offer is too low, you can challenge it. You may need to do so because you are still responsible for repaying your loan.

Insurance Not Paying Enough For Totaled Car

Insurance Not Paying Enough For Totaled Car

Insurance companies only make money when they pay out less in claim dollars than they receive in premium dollars. In other words, it is in the best interest of your insurance company, their attorney, and their claims adjuster to persuade you to accept the lowest settlement possible for your claim. The insurance company also knows that you need your car and that your accident has put you under financial stress – whether it’s just from the damage to your car or other financial consequences of the accident. In any case, they will try to take advantage of your financial needs and try to get you settled quickly. If they can do so by saying the amount and washing their hands of your claim, that’s better for them.

Insurance Not Paying For Totaled Car, What Do I Do?

Insurance companies are also not involved in the solution innovation business. They have tried and true tactics that have worked for them in the past in settling claims for the lowest amount. You should be careful with this trick.

Recorded statements are like depositions. You will meet (or Zoom or teleconference) with a representative of the insurance company and make a statement about the accident under oath. In North Carolina, you do not need to provide a recorded statement to get your claim paid. A recorded statement allows the attorney for the at-fault driver’s insurance company to ask you questions under oath and use your answers against you in processing your claim. Remember, in North Carolina, you may not be forced to give a recorded statement. Given how easily your claim can be denied based on something as simple as your polite apology, it’s best to avoid this route altogether.

Insurance companies have their own lawyers and will be just as happy if you don’t have your own. They know the law; they know their tactics and your rights. They also know that they can outlast you, but if you get a lawyer, your rights and interests will suddenly become more important and more vigorously defended. In other words, once you have a lawyer, the cost to the insurance company of the claim will increase. They prefer to avoid it.

Most early settlement offers from insurance companies are much lower than what might be reasonable for your claim. This tactic is called a lowball offer, and they really hope you’ll accept it. As we said before, insurance companies want to take the most amount of premium for the least amount of payment. Insurance companies also know that the longer your claim is open, the more you will learn about the full extent of your damage. In other words, time is your friend and the insurance company’s enemy. They want to stay low

Metairie La Car Accident Lawyer

One of the best ways to avoid dealing with insurance company settlement tactics is to ignore their advice not to hire an attorney. A knowledgeable and experienced car accident or personal injury attorney will have been on the road many times before. Your attorney may have dealt with this company and its staff before. Regardless, a lawyer’s experience in responding to lowball and high-pressure settlement tactics will help you get the best possible settlement for all of your injuries.

Having a lawyer also takes you out of the communication chain with the insurance company. Face it, you’ve had an accident, and you’re not at your best. You may be injured; you must be stressed emotionally, physically, and possibly financially. From the insurance company’s point of view, that’s the perfect time to discuss a settlement. However, an attorney will step between you and the insurance company representative. In fact, once you hire a lawyer, the insurance company’s lawyer is no longer allowed to speak to you directly. Having a lawyer reduces your stress by taking you out of the conversation and leveling the playing field with a passionate advocate for your side of the case.

Finally, the lawyer can go to court. Once you have retained an attorney, the insurance company knows that you are willing and able to file a lawsuit to enforce your claim. It’s no longer a matter of them saying no while you keep hoping for yes. Typically, once a lawsuit is filed, the final payout for the claim will be higher than it would have been without litigation. Insurance companies are aware of this and will be more likely to settle it to avoid litigation.

Insurance Not Paying Enough For Totaled Car

As you can see, if you or a loved one has been in a car accident in North Carolina and are facing a settlement battle with the insurance company, a skilled car accident or personal injury attorney can reduce your stress and result in a more complete settlement. and a more satisfactory settlement of your claim. Contact us online or call 910-490-4199  today for an initial consultation and free case evaluation. Filing an insurance claim can be stressful — especially for totaled cars. Plus, figuring out whether your car totals isn’t always obvious.

In An Accident? What To Do When Your Is Car Totaled

If your insurance company determines that your car is totaled, it will usually pay you its fair market value, also called actual cash value, immediately before the accident.

It doesn’t have to be what you paid for the car, how much it costs to get a new car, or how much is left on your car loan. Here’s how insurance payouts for car totals work.

Contrary to popular belief, totaled cars are not the only ones that are badly damaged in accidents. A totaled car is a vehicle filed by someone for which the insurance company determines the cost of repairs will exceed its value.

Under this definition, your car doesn’t have to be in an accident at all to get the total. It can be damaged in a large hail storm or flash flood. The lower the value of your car, the easier it is to total.

Totaled Or Repairable??

For example, if your car needs $5,000 worth of repair work, the insurer might pay for it if your car is worth $40,000. But if your car is only worth $4,000, the $8,000 repair is more than the car is worth, and the insurer can determine that the amount is added up.

If your car breaks down, you’ll need to file a claim with the insurance company to see if it’s totaled or repairable. Here’s how the claims process usually works:

Insurance companies usually compare the pre-damage cash value of your car with the cost of repairs needed to restore it. In some states, they may also include other costs in the calculation, such as salvage costs.

Insurance Not Paying Enough For Totaled Car

For example, in Oklahoma, your car needs repair costs of 60% of your car’s cash value to be considered a total.

Questions To Ask To Figure Out How Much Car Insurance You Need

If you have a $10,000 car in Oklahoma, that means your car will be totaled if the insurance adjuster estimates it needs $6,000 in repairs. But in Colorado, where the threshold is 100%, you need the full $10,000 repair estimate for your total car.

In other states, insurers use a total loss formula, which requires less calculation and work. The formula is:

In other words, if it costs more to repair your car than just paying the value of your car (minus any proceeds that could be earned from selling your car to the junkyard), your insurance company will likely pay you that value. It will declare your car a total loss, sell it for parts, and pay you what it’s worth instead of paying to fix it.

For a $25,000 car that cost $15,000 to repair and is now worth $5,000 at the junkyard, your insurance company may choose not to total your car and just pay for the repairs. The repairs ($15,000) will be less than what is owed to you minus the salvage value ($25,000 – $5,000 = $20,000).

What Happens When Your Car Is Totaled

If the insurance company declares your car a total loss, it will pay you its fair market value, also known as actual cash value, minus any deductible. In other words, the payment amount for your total car is what you would get if you sold it before it broke down.

For example, if the fair market value of your car was $25,000 right before it broke down, that’s how much the insurance company will pay you for it

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