After a car accident, chances are your auto insurance company will start off with a lowball claim payout. Your car's value can drop significantly after an accident, even if the auto shop repairs it to like-new condition. If your car is totaled and beyond repair, its payout value may be low as well.

Both situations are prime examples of when some haggling needs to be done in order to get the payout on your auto insurance claim you feel you deserve. There are plenty of online resources you can use to find the value of your car before the accident. You will need this whether you are negotiating a payout with your insurance company or their adjuster for a diminished value claim or a totaled car. Having records of improvements you did to the car before the accident can also affect your final payout.

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How do I calculate my car's value before negotiating my insurance claim?

After you've filed your auto insurance claim and you want to negotiate your claim payout, it's important that you get the best possible estimate of your car's worth. You're going to need to justify to your provider why you need a better payout, and researching your car's actual value is the best way to do it. Here are the steps you should take:

  1. Use an online car value calculator to get the pre-market value of your car. Also make use of the National Auto Dealers Association (NADA) and the Kelley Blue Book websites. Both of these sources are established, well-respected authorities used to figure out a vehicle's value.
  2. Go to multiple auto repair shops and get damage estimates. While you're there, get diminished value appraisals from them as well. A diminished value claim allows you to get a payout on the difference between the car's value before and after the accident if it decreased the vehicle's value, which is common.
  3. Compare the estimates you calculate to the pre-accident value to the car. This will give you a solid range of dollar values for the car that will give you room to negotiate your payout.

Getting a better car insurance payout after an accident

If you are unsatisfied with your insurer's payout number after a car accident, contact your provider. Your car insurance company may send an adjuster to represent them in the negotiations, or you may just deal with them directly.

When negotiating with the insurer or their adjuster, make sure you know what your auto insurance policy does and does not cover. Your insurer is not going to pay out on damage that is not covered under your policy. The declaration page of your policy will have a basic but clear overview of your coverage, but also take the time to read through the policy to make sure you're only focusing on the damages your car insurance can cover.

Equally important is being ready to explain the personal elements of why you're looking for a higher claim payout. Being able to explain how the damages have affected your life, such as your commute and ability to run errands, will give them a fuller reason for your payout request during negotiations.

Also be ready to dig your heels in and be persistent. If it seems like your provider is moving slowly with settling your claim, don't be afraid to ask why. Insurers usually have claims processed within 30 days, but this is more of a guideline than a rule. 

How to file a diminished value claim

A diminished value claim is a type of claim you file with another driver's insurance company after an accident. It allows you to get back the difference between your car's value before and after the accident. According to the Bryant Law Center, your car's value may decrease anywhere between 10% and 25% after an accident. Filing a diminished value claim is usually required to recoup those costs.

Here are the steps you can take if you choose to file a diminished value claim:

  1. Estimate the diminished value of your car by comparing your car's pre-accident worth with the estimated trade-in value.
  2. Contact the other driver's insurer and request to file a diminished value claim. They will tell you what you need to do on your end. Make sure you have evidence that their policyholder was at fault for the accident, as well as receipts and documentation supporting the amount of the diminished value that you want to recoup.
  3. If the result of the diminished value claim is unsatisfactory, contact your state's insurance commissioner and see if they can be of assistance. If you still cannot get help and are committed to a diminished value claim, consider hiring a lawyer.

Diminished value usually falls into three categories:

  • Immediate diminished value is based on the resale value of a car right after an accident before any repairs are made.
  • Inherent diminished value is the most commonly used form of diminished value. It is based on the resale value of the car reflecting its overall damage history.
  • Repair-related diminished value is similar to inherent diminished value, the difference being where inherent diminished value is based on optimal quality repairs being done, repair-related diminished value is applied to cars with subpar repair work done. 

Be aware that if you are responsible for the accident, you probably will not be able to file a diminished value claim. There are currently 12 "at-fault" states in the U.S. This means that all damages are the responsibility of the person who instigated the accident. In a "no-fault" state, your insurer will pay out on damages regardless of who is at fault. You cannot file a diminished value claim against your own insurance.

Negotiating an insurance payout for a totaled car

If your car is damaged to the point that the cost to repair it is more than what it is worth, your insurer may declare your car a total loss. If your insurance company's settlement amount is unsatisfactory, here are some tips to get more money from them:

  • Look at the NADA and Kelley Blue Book sites to get an estimate of your car's value before it was totaled.
  • Find the local market estimate of your car's pre-totaled value by checking for-sale listings in your area for similar make and model cars.
  • Collect and compile all receipts you have for any improvements you've made to the car in the past. These improvements will not be included either in car value estimate sites or by your insurer unless you've made them aware of the changes. They can affect the overall value of the car.

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