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Auto Insurance Claims/Replacement Value

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Question
Yesterday I was traveling up a major street (4 lanes) with the speed limit at 45mph.  Without warning some guy came from a side street and drove directly in front of me from a side street. I slammed on the brakes and that is when he looked in my direction, so apparently he was looking the opposite direction when he entered the intersection.  We were too close to avoid a collision so I "T-Boned" him.  Neither of us were hurt but it was obviously his fault for not yielding the right-of-way to me.  I don't know if the police gave the guy a ticket or not; I assume not.  
Since my small truck is a 1997 Nissan with 195000 miles, I'm pretty sure it will be declared totaled. The problem is, the "fair market value" for my truck is listed online as being around $1900.  Take $600 off that for the insurance deductible and that leaves me with a whopping total of $1300 to get another truck.  I am extremely cash strapped now and there is no way I can afford to purchase another vehicle.  This vehicle is my only form of transportation to work so I need a vehicle to drive.  
So my questions are: Are my monetary assumptions correct in that I will probably only get about $1900 compensation?  And, is there anything I can do to get enough money to get a decent vehicle to drive by going through the insurance or do I have to file some sort of law suit and hope for the best.  What is my best course of action here so I can get the most money for what this guy robbed from me by his neglectful driving?

Answer
Hi Brett,

I'm sorry for your situation. Unfortunately, you are likely correct. The vehicle will certainly be totaled. You are entitled to be paid for the fair market value of your vehicle just prior to the collision. You are not entitled to a replacement vehicle. Below is an explanation of the total loss claim process:

The Total Loss Claim Process


Step 1: Determining the vehicle to be a Total Loss

When you are involved in a collision, you will report the claim to either to your own insurance company or the insurance company of another at-fault party. The insurance company will assign a damage estimator to inspect the damage and write a repair estimate. Once the estimate is written, the repair cost will be compared to the value of the vehicle. Generally, insurance companies will declare a vehicle to be a total loss if the cost of repairs is more than 70% to 80% of the vehicle’s value.

Step 2: Doing Your Homework

If you have been informed that your vehicle is a total loss, the insurance company will then take usually a couple of days to determine the value they are going to offer you. During this time, you should do your own research to determine the fair market value of your vehicle. The easiest way to do this is by using the internet. You should check www.autotrader.com . There you can search for currently for sale vehicle like yours, in your area. You should try to locate 5 to 10 vehicles of the same year, make & model, with similar options and mileage. Print out the listings you find and average the values. This will give you a good average value to use as a baseline. However, you must understand that the prices you find are asking prices and virtually all of those prices will be negotiated downward to some degree. Now when the insurance company makes you an offer you will know if it is within a reasonable range or not.

Step 3: Negotiating and Settling Your Claim

Now that you know what your vehicle is worth and what the insurance company is offering you, it is up to you to negotiate if the offer is not reasonable. You can start by sending the documentation you collected in step 2 above and making a demand of what you are seeking to settle the claim. If the insurance company does not properly negotiate with you then you may have to hire a professional vehicle appraiser to properly establish the value of your vehicle. If you are dealing with your own insurance company you can invoke the appraisal clause of your policy. This is a part of your policy that is there to help settle disputes in value between you and your insurance company.

I hope this helps.
Richard Hixenbaugh  

Auto Insurance Claims

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Richard Hixenbaugh

Expertise

Auto insurance claims procedure, auto coverage, liability issues, auto damage questions, how to deal with the insurance company, loss of use and diminished value.

Experience

I have been involved in the insurance industry for over 25 years. I have experience in underwriting, sales, claims adjusting, auto damage estimating, auto value appraising and diminished value appraising. I have testified as an expert witness over 35 times.

Organizations
Society of Certified Auto Appraisers

Education/Credentials
Completed all required courses for the Florida Property-Casualty agents license and the Florida claims adjusters license. I have attended various courses on auto damage estmating, vehicle appraising and am ASE certified in collision damage analysis.

Past/Present Clients
My company has done work for consumers nationwide.

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