Hi, in this video, we will discuss how much an insurance company in California has to pay for a totaled car. My name is Matt Eason. I’m a personal injury attorney. I’ve been practicing law for over 25 years, and part of our practice is ensuring insurance companies pay the appropriate amount for a totaled vehicle.
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In this video, we’re going to discuss how to calculate the value of the vehicle, what’s included and not included in the value of the car, how to increase the value of the vehicle, and most importantly, which insurance company to deal with in negotiating the value of the car.
The first issue we want to talk about is how you determine the value of the car. In determining the value of the vehicle, the law assumes that the transaction is occurring between a willing buyer and a willing seller. If you’re on the boulevard, so to speak, and you’re negotiating the car’s value, what would the parties negotiate the value to be?
With that understanding of how the value is determined, the question is, how do you go out and find out what the value of your car is? Part of the difficulty in determining what someone would pay for the car is that car prices are often negotiated. So what you see advertised in the paper or advertised on the boulevard as you drive by or advertised on the internet isn’t always the purchase price. Consequently, just simply getting some purchase price offers for cars out there isn’t always the best way to find out your car’s value.
One mechanism we like to utilize is CarMax. CarMax’s business model is such that they don’t want to negotiate over a value and typically don’t. Consequently, if you can find your car on CarMax, that’s an excellent resource for you to show the car’s value. Another neat thing about CarMax is that they can ship cars from around the country to your location. Therefore, what you can do is you can find your vehicle anywhere in the country, take into account its cost of shipping, and theoretically, that’s the value of your car.
In addition to buying your car at CarMax or trying to find comparable vehicles that are advertised on the internet and then adjusting what it would likely sell for, you could also hire an appraiser to appraise the value of your car. Appraisers cost money. It’s not uncommon they’re $250 to $500, so you have to consider that to see if that’s worth doing.
While you’re doing your due diligence based on what you think the car’s value is, the insurance company has its programs that they’re going to run your vehicle through. It’s like a Kelley Blue Book-type program that they’re going to put in the various features, and it’s going to spit out a number that it thinks the car’s value is. Be very wary of those programs and, in particular, the data going into those programs. Almost every adjuster will run your vehicle through as being in average to poor condition, so be sure to look closely at that report.
Once you find that condition listed on your report, you will want to provide the adjuster with all the information you have to show the condition is higher than listed by the adjuster. Things to consider to adjust the value to a higher condition include the lack of dents and dings. But also, are there new tires on the car? Do you know if it has been worked under recently? A new engine and transmission? Any of that information you have in a reasonable period you want to provide to the adjuster to try and increase the value of the car’s condition.
In addition to negotiating the fundamental value of the car, you also need to consider what should be included on top of that and, unfortunately, what’s not included in that. On top of the car’s fundamental value, you’re entitled to reimbursement of the tax title licensing fees that you have paid for that car. In addition to coming up with the car’s raw value, you do get to add just if you were to go on the street by it with the cost of the tax, title, and license. In California, that can be anywhere from 8 to 10% addition on top of the car’s raw value. So be sure you include that in your demand.
While you add tax, title, and license to the car’s value, you don’t get to add sentimental value. Unfortunately, the fact that that was your first car or your favorite car, or was a gift to you doesn’t come into the equation. Because the car value is based on what a willing buyer and a willing seller would be selling the vehicle for, and it’s unfortunate, but that is the law.
One of the most important things, though, in negotiating the value of the car is to which insurance company you’re negotiating the value of the vehicle. Many people are reluctant to negotiate the car’s value with their insurance company. You are saying, hey, why should my insurance company pay for it when they were at fault? The other insurance company will have to pay for it. Still, you’re better off typically going through your insurance company to negotiate the value and then letting your insurance company get reimbursed from the other side.
You typically want to go through your insurance company because your insurance company owes you a duty of good faith and fair dealing. So when they’re negotiating with you, they’re negotiating for a range of values, and they should be paying you in the top range of that value. In contrast, the other side’s insurance company owes their insured the duty of good faith and fair dealing, not you, and as a result, they will try and pay you on the low end of the range of value. The difference in value between a high-end and a low-end can be pretty significant, and that’s why you’re usually better off going through your insurance company.
However, one of the downsides of going through your insurance company has to do with your deductible. Insurance companies often charge you a deductible, but you get it back when they collect the money from the other side. You are the first person to be reimbursed. Many more reputable insurance companies will waive the deductible once the other side admits the liability, which is not even a challenge for you all. Because of the differences in values between what your insurance company should be paying you and what the other side’s insurance company should be paying you, temporarily being out that deductible is usually well worth it.
If, in the end, you can’t agree with the insurance adjuster over the value of your vehicle, your insurance company has to pay you at least what they believe to be the value. Then, you can arbitrate the difference in that value over time. In contrast, the other insurance company has no obligation to pay you anything until you agree as to the value, and worse, you would have to sue them to get that reimbursed. Again, because of those timing differences and the ability to resolve conflict differences, you’re usually better off going through your insurance company if that’s your option.
While the question, “How much does an insurance company pay for a totaled car?” seems straightforward, there are lots of variables about that. If you’ve been involved in a car accident and have insurance claims for loss of use of a car or loss of value of the vehicle in personal injury, I hope you’ll consider calling our law firm. My name again is Matt Eason.
The law firm is Eason & Tambornini. Our address is 1234 H Street, Sacramento, CA. 95814, and my phone number is (916) 438-1819.
