If your car has been in a brutal accident, your insurer might declare it as a “total loss.” What does it mean? And how can total loss affect your insurance claim? Understanding total loss is paramount for all vehicle owners as it can affect their insurance claims. You must read this article if you want to understand total loss and total loss appraisal NYC in detail.
What is a total loss?
An insurance company declares a car a total loss when the cost of repairs exceeds the insurance claim. Moreover, not all cars in total loss appraisal are scrapped as most of the vehicles fall under “Salvage vehicles” and act as a source of essential parts.
Total Loss Appraisal NYC – How Does an Insurer Declare A Vehicle A Total Loss?
Undoubtedly, many types of damage can adversely affect a vehicle’s condition. Some repairs which might feel minor to the owner might be a total loss for the insurance company. The insurance policies also differ from one company to the other. Therefore, the insurance claim depends on the insurance policy.
Here are the three common choices which insurance companies consider while settling an insurance claim,
Returning a stolen vehicle if approved by the insurer and paying for any damage.
Paying for the cost of repairs or replacement of the vehicle if needed.
Considering all or few parts of the vehicle as salvaged and negotiating the claim with the policyholder.
How to negotiate a total loss claim smartly?
You can negotiate better if you have a clear idea about your vehicle and market. When an insurance company declares a vehicle total loss, they actually consider ACV or Actual Cash of the Vehicle. They also consider the condition, age, mileage, and diminution value of the vehicle while declaring a vehicle total loss. They also check the price of the same vehicle by contacting different dealers in the region.
Moreover, insurers have two methods in hand while declaring a vehicle total loss, and in the United States of America, state law decides the method.
The two procedures used by insurance companies while declaring a vehicle total loss are,
Total Loss Formula and
Total Loss Threshold.
For example, in New York, TLT or Total Loss Threshold is used by insurance companies to define a vehicle as a total loss. In the TLT procedure, the average cost of the repairs must be between 60% to 100%.
Let us understand it in detail. For example, the actual cash value of a vehicle is 50,000 USD, and the cost of repairs exceeds 75% (New York TLT), i.e., 37,500, the insurance company will define the vehicle as “totaled.”
Whereas, in TLF or Total Loss Formula, the cost of the repairs is added to the salvage value, and if the amount exceeds the ACV, the vehicle is described as totaled. Delaware, Massachusetts, Nebraska, New Jersey, New Mexico, and Pennsylvania follow TLF.
New York, South Carolina, South Dakota, and Tennessee have a TLT of 75%. On the other hand, states like Texas and Colorado demand a TLT of 100% to define a vehicle total loss.
Determining the worth of the vehicle:
The first and foremost step you have to undertake when your car is declared a total loss is determining the market value of your vehicle. There are various factors like condition, model, age, mileage, and body style of the vehicle, which can have a major impact on the worth of the vehicle. Understanding physical and technical conditions will help you in finding the best estimate for the vehicle.
Demand for a copy of the evaluation:
Asking for a copy of the evaluation from the insurance company is a smart move. You can take help from other dealers or a professional total loss appraisal NYC to understand the evaluation in detail. Generally, the first page of the claim has a base value, depreciation due to damage, and the Actual Cash Value of ACV. When turned over, you can see how your vehicle price compares with other vehicles in the market.
Focus on errors:
As the old saying says, “Nobody is perfect” can be applied here too. Sometimes your insurer might make mistakes like adding the base price of a luxury model and not the base model, which can reduce the value. They might also falsely point out rust or leaking engines that don’t exist. If you see something suspicious, bring down the evaluation documents to the claim adjuster, who can help you negotiate with the insurer and get a fair price for the vehicle.
Give your list of comparable vehicles:
Yes, you have all the right to provide your opinions of vehicles if the numbers provided by the insurance company don’t fit your mind. You can find vehicles of the same age and model offering similar options. Your insurance company might not listen to your call of comparing different variables the majority of times but trying it is not a bad idea.
What if nothing works?
Now that you have tried all the techniques mentioned above yet you cannot get the fair value for your vehicle. What do you know? So, here are few options left on the list?
Recheck your insurance policy:
The next step, which you can take in the pretext of getting your numbers, is hunting down the agreements you signed at the insurance policy. You might have agreed to a number of stipulations offered by the insurance company; hence you will have to read every single word carefully before moving to the next stage. Unfortunately, if you cannot retrieve the documents, you can ask them from your insurance provider to learn what your rights are under the policy.
Fetching a total loss appraisal NYC:
Well, if you and your insurance provider cannot settle a claim through peaceful terms and negotiations. Both of you can hire your own appraisers respectively. In simple words, you will hire a third-party individual who will help you determine the actual worth or value of the vehicle in the market.
You and your insurer will have to hire individual third-party appraisers later. Those two people will come together to put an end to the negotiation. Moreover, if appraisers for both ends cannot settle the dispute, a referee is brought into the play to trade it right.
According to recent research, most vehicle owners had to compromise with a lesser value after applying an appraisal compared to the value provided by the insurance provider. Moreover, you will also be responsible for paying 300 USD to 1000 USD fees of the automobile appraiser, which might be worth investing in if they can help you in getting a higher price than the one offered by the insurer.
Put your final price to the insurance provider:
Appraisers are not always beneficial at both ends; hence you can keep it safe by negotiating it to a specified amount. You and your insurer are putting a lot of risks while hiring automobile appraisers for total loss.
You are risking the price offered by the insurer while the insurer has to take the risk of offering a higher price than the one decided early. You can also tell your price to your appraiser, but you have to also keep in mind that the appraiser from the insurer’s end will also work hard to pull the price down.
In most cases, both the policyholder and insurer settle the trade without the intervention of an appraiser. If your insurer is ready to pay a higher amount, it is not wrong to agree to it. Anyways it depends on your needs, and you are the one who ultimately counts the risk and reward ratio.
Can I keep my vehicle if it is a total loss?
Yes, you can keep your vehicle if it is declared a total loss, but your insurer might reduce the price of the vehicle as you are going to keep the vehicle. On the other hand, most insurers take the vehicle from first-hand owners as they are paying for the total loss, and now they are the legal owners of the vehicle. If you think that you can repair the vehicle within the collision coverage plans offered by the insurance company, you can keep the vehicle. You will also have to understand that your insurance partner has paid for the vehicle’s full value. Hence you cannot claim a payout once you decide to keep the vehicle after being declared as a total loss. You can keep the vehicle if you have a lot of lovely strings attached to it.
Looking for a trusted automobile appraiser for Total Loss Appraisal NYC?
Contact Benchmark Auto Appraisers LLC right now, who has the right experience dealing with total loss appraisal NYC. They can help you determine the estimate of your vehicle and can also communicate with the insurance provider. Founder Daniel Jendrowski states that Benchmark Auto Appraisers LLC ensures that you get everything you owe when your vehicle is declared as a total loss. Call us right now at 1-877-888-6113 to book a free consultation with our experts.
Daniel “Dan” Jendrowski
Certified Public Auto Appraiser Diminish Value Experts B.C.A.A. & I.A.C.P.
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