In North Carolina, the North Carolina Insurance Commissioner has created a set of rules about how motor vehicle insurance claims should be handled. Those rules are found in Chapter 11 Section 4 of the North Carolina Rules of Administrative Procedure. If you would like to read the rules for yourself, go to Google North Carolina Administrative Code. Go to Chapter 11, and look at the rules that start with “4.”. I will explain some of the most important of them in this video.
The portion of the rule regarding what happens when your car is totaled is found in 11 NCAC 4.0418. Subsection 5 of the rule reads:
“When a motor vehicle is damaged in an amount which, inclusive of original and supplemental claims, equals or exceeds 75 percent of the preaccident actual cash value, as such value is determined in accordance with this Rule, an insurance carrier shall "total loss" the automobile by paying the claimant the preaccident value, and in return, receiving possession of the legal title of the salvage of said automobile.”
What I get from that is that if all the costs of fixing the vehicle exceed 75% of the preaccident value of the vehicle, it has to be totaled. So, how do you figure out what the preaccident value is?
That information is found in Subsection 1 of the same rule and reads as follows:
“If the insurer and the claimant are initially unable to reach an agreement as to the value of the vehicle, the insurer shall base any further settlement offer not only on published regional average values of similar vehicles, but also on the value of the vehicle in the local market. Local market value shall be determined by using either the local market price of a comparable vehicle or, if no comparable vehicle can be found, quotations from at least two qualified dealers within the local market area. Additionally, if the claimant represents that the vehicle actually owned by him was in better than average condition, the insurer shall give due consideration to the condition of the claimant's vehicle prior to the accident.”
Essentially, look at the Kelly Blue Book online and at Edmunds online to see what the value of your car was before the wreck. You should also look and see if you can find a comparable car for sale in the area at a dealer, on Craigslist, or in the newspaper. That will give you the fair market value of your vehicle.
Once you have the fair market value of your vehicle, you multiply that times .75. For instance, if the fair market value of your vehicle was $10,000.00 before the accident, then your vehicle is totaled if repair costs exceed $7,500.00.
If you really want to be thorough, go to two separate dealerships in your area and ask them to give you written quotes on the pre-accident value of your vehicle.
Also, you need to have a list of anything that you can think of that would make your vehicle better than an average vehicle. For instance, if you just put new tires on the car, you should get the bill for the tires and request that the cost be added to the value of the car.
This would be a good time for you to review the video on Negotiation in the Basics section of this series. Armed with the fair value of your vehicle and a good set of negotiating skills, you are as prepared as you ever will be to negotiate with the adjuster. Don’t let the adjuster make you mad. Remember, this is not personal to the adjuster. It is strictly business, and you should try and approach it the same way. That’s the best way to get what you deserve for your car.