After your vehicle is heavily damaged in a collision and is declared a total loss by the insurance company, it can be tough to get a fair settlement. It’s because they are business-centric and will try to settle the claim with a low payout. The total loss appraisals are available to help you in this situation and get a fairer settlement amount for your beloved vehicle.
A car is declared a total loss if its estimated repair cost and salvage value reach or exceed a certain percentage. This fixed percentage is known as the total loss threshold and can differ according to state. Many people are unaware of it, but if a car is totaled, it also means the vehicle is a total loss.
After you send your notice or letter to the car insurance company, they will receive it. You both select a professional appraiser to evaluate the market value of your car before its an accident. Each party is responsible for paying the fees of their chosen appraiser, and it is necessary that the appraisers have extensive knowledge about vehicle values and the total loss appraisal process.
Both appraisers assess the market value of the car and reach a mutual agreement. For this, both appraisers will likely compare findings. If both appraisers disagree, they will select an umpire – the 3rd appraiser to make the final decision. In case both insurers don’t come to an agreement and an umpire is summoned, both parties can split the expense equally.
An auto total loss appraisal clause is a legal provision in your insurance policy that allows both parties to request an appraiser when the value offered for total loss is rejected. If you disagree with the offered settlement amount, this provision lets you challenge the settlement without filing a lawsuit.
When should you invoke an auto total loss appraisal clause, you ask? It shouldn’t be employed only when your insurance company offers a lower settlement amount for your totaled vehicle than you demanded. Smaller differences aren’t worth the effort. Moreover, gains will be spent on the process fees. If somehow you manage to get a settlement that is much higher than previously offered, the auto total loss appraisal clause can help you with that.
After your car is declared a total loss, it can be risky to employ the total loss appraisal clause, especially if you are in a hurry. Companies generally have deadlines to file total loss claims, and it’s difficult to find a certified and experienced appraiser. Furthermore, it will take time for both appraisers to agree on a value. The need for a third appraiser may also occur, further delaying the settlement. You should invoke the total loss appraiser only after considering all.
Total loss appraisals need a long process; we break it down for you in the following points.
The process starts with the policyholder challenging the settlement amount offered by the insurance company. It typically happens because the insurance company undervalues the market value of the vehicle, the repair cost, or the loss in resale value.
Both the insurance company and the claimant try to reach an agreement. They send an insurer to negotiate and resolve the issue, which mostly proves to be worth less. It’s because the insurer has no room to negotiate unless the claimant presents solid evidence, like an appraisal report. This leads to two outcomes: claim settlement or invocation of an appraisal clause.
Either party requests an auto total loss appraisal clause as briefed in the insurance policy. The claimant sends a demand letter along with an appraisal report to the insurance company and invokes the appraisal clause. It can result in the insurer realizing their fault and increasing the offer, or hiring an appraiser of their own.
Both appraisers present their points and try to reach an agreement. If they reach an agreement, both sign and then settle the claim.
If both appraisers don’t agree with each other, they hire an umpire (a third appraiser). This umpire reviews both the appraisers’ assessments and issues an agreement for settlement.
The appraiser who agrees with the umpires’ decision signs their award. If neither appraiser agrees with the umpire, legal interventions or steps according to the insurance policy are taken.
Appraisal clauses have 2 major impacts on the policyholder:
The auto total loss appraisal clause provides claimants with a solution to control the insurance claims process. It empowers claimants to challenge decisions or settlement offers of the insurance company. This freedom becomes instrumental when claimants believe that the settlement amount offered by the insurance company is lower than the actual cash value of the vehicle.
If the appraisal is higher than the insurer’s offer, the claimant can receive a higher payout. However, this can be vice versa; if the appraisal finds that the insurer’s offer is fair, the policyholder might end up covering appraisal costs.
Selecting the right appraiser is very difficult. You need to find an impartial, experienced appraiser. An experienced appraiser can save significant time to reach an agreement and add considerable value to your claim. Conversely, an appraiser unfamiliar with the process can cause delays.
An auto total loss appraisal clause settlement is difficult to dispute. You need an experienced appraiser who can accurately assess your vehicle, so you get a fair settlement. They can protect you from forcefully accepting the wrong settlement amount.
No, diminished value is applied to repairable automobiles, and a totaled car isn’t eligible for that. It’s because the insurance company will already be compensating for the full fair market value of the automobile.
At ADR-Claims, we are devoted to helping you get the best total loss value settlement. We conduct a thorough evaluation of your vehicle and provide you with a detailed appraisal report. So, you can present a strong case and get higher payouts. We deliver many other services, such as diminished value appraisals, arbitration and umpiring, fleet and commercial appraisals, etc. Contact us for a free quote now!
How long an appraisal process takes to complete depends on the complexity of the claim and the availability of appraisers. Generally, it takes from a few days to weeks to complete total loss appraisals.
Invoking the appraisal clause is a right given by the insurance company and should not negatively impact their relationships. It’s just a method to ensure fair settlement and is part of the normal procedure.
No, if you disagree with the offered settlement amount and don’t want to use the appraisal clause, you can consider legal action as a last resort, depending on the circumstances.
In case of constructive total loss, the claimant keeps the ownership of the vehicle, and in actual total loss, the insurance company takes over the ownership of the vehicle.
Our quick and simple appraisal process can help you recoup vehicle-related losses.
