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Negotiating the settlement

The insurance company deemed my vehicle a total loss. I can’t replace my car with the money they are offering. Can I negotiate?

Short answer: not much. In a total loss situation, Texas law requires only that insurance companies pay the fair market value of your vehicle in its immediate, pre-crash condition. If your vehicle was paid off and reliable, then you probably never would have sold your vehicle for the amount they are offering. Arguing that your vehicle was special or irreplaceable simply won’t work here. Instead, focus on the insurance company’s assessment of the fair market value.

Start by gathering information. Insurance companies rely on third party services to compile reports about sales and advertisements of comparable vehicles within a given geographical area and time-frame. Ask the adjuster for the total-loss evaluation report for your vehicle. Read the report to make sure they are basing their evaluation on the average “private party” value and/or “dealership” value, and NOT “trade-in” value. Check to make sure they are using your vehicle’s exact year, make, model, and trim package. Perform your own online research of vehicles for sale in your area. You might even email the sellers to ask if they would take the amount the insurance company is offering. Send the “no” responses to the insurance company along with the corresponding advertisements.

You should be able to achieve a modest increase in their offer. Just be aware, there will be very little time to vacate the rental vehicle after the total loss offer is made. Holding out for an extra $100 could cost you $200 if the insurance company cuts off your rental car. More on that in the next question: Can the insurance company cut off the rental car before I receive the total loss settlement money?