Join Date: Aug 2006
My Ride: E60M
A word on total losses...
So the worst case scenario has happened... you were in an accident, and now you're coming to me as your insurance company's adjuster and I've told you that most likely, your car is going to be a total loss. What am I going to do next, you ask? Well, here goes:
My company uses CCC Pathways for our estimating software (there are several different ones out there, though). At the top of my estimate is a running ticker that counts up to the total loss threshold. It has a generic value set based on year make and model of car. Once that hits 100%, I know that there is a potential for a total loss.
The next thing I do (after letting you know that there is a potential for a total) is I get a good overall condition of the car. We rate in these categories:
- Body (condition of the sheet metal and bumpers. Is there prior damage? Is there rust? Are panels misaligned or ill-fitting? The amount this affects value depends on the year of the car. For instance, several dings will not hurt a 2001 model like they would a 2011 model. This applies to all categories)
- Paint (how does the paint look? Is it faded? De-laminating? Does it match across the car? Is there obvious overspray? Is there obvious paintwork? Obvious meaning "I can spot it from across the lot", not "My spectrochromograph shows a 1% variance in hue".)
- Glass (any chips, stars, cracks, or pitting?)
- Tires (what is the current tread depth? Measured in 32nds of an inch. New is between 10 and 12/32 of an inch)
- Mechanical (Pop the hood, how does it look? Is there a lot of seepage around seals? Pull the oil dipstick, is the oil black? Or does it look pretty clean? Pull the trans stick. Is the trans fluid burned up? Are there huge scorch marks on the bumper around the tail pipe? Start the car. Does it start right up, or does it struggle to crank?)
- Interior (How is the inside of the car? Are the carpets in decent shape? Does the headliner sag? Are the seats worn to crap? Is the dash all torn up? Does the interior smell clean?)
Each category is rated on a 4 point scale: Excellent (never seen anything rate Excellent. Doesn't mean they're not out there, but it would basically be an absolutely flawless vehicle), Dealer Ready (car can be sold as is other than normal dealer prep work), Average Private (What we expect to see in a car with the year and miles yours does. AP in a category neither adds nor takes away value.), and Rough (car needs some serious TLC).
I also make sure that I have all the options correct for your car.
After I have my evaluation, I'll ask you if there has been any major work done to the car lately. A new engine or transmission would rate this. A new all-over professional paint job. Regular maintenance doesn't count, nor do new tires, or a really sweet vinyl job.
From here, I send all the information I have about your car to CCC Pathways. Most of the time, I'll get a response within about 2 minutes of sending it. What they give me, first and foremost, is a number. It will also give me all the locations it used to find this value, as well as all the cars used in the comparison. Pathways searches through dealer ads and classified ads, starting in your zip code and working out from there.
Once I have the value of the car, I'm going to take a minute to put some numbers together. I'll add in state sales tax for the vehicle (varies by state, VA is 3.5%), I'll add in tag and title fees ($12 for VA outside of Virginia Beach.), and I'll subtract your deductible. I'm also going to determine a salvage value for your car. We have what are called "guaranteed bids" for certain classes of cars (domestic, year range 1. domestic year range 2. import year range 1. import year range 2.). We are guaranteed to receive no less than that when your car goes to a salvage auction. I cannot give a lower salvage value than that. I usually start at about 20% of the ACV for any car less than $6,000. If it's more than that, I'll make a couple phone calls to local salvage yards I trust and ask them what they would bid for it.
Now is when we start chatting. If you own the car free and clear, you have two options. Let us keep the car, and you get the full ACV minus deductible, or you keep the car, and we keep the salvage value. This is typically where the debates start. Your car has intrinsic value to you. This was the car you first learned how to drive in. So on and so forth. Divorce yourself from the emotional attachment and start thinking reasonably. If I tell you that I'm offering $5,000, and you say the car is worth $10,000, then the conversation is more or less over. I can't negotiate on 100% of the value. Different bosses will give differing amounts of leeway to their adjusters based on experience and company policy, but my boss usually gives me about 20% of the value to negotiate with.
Things I can negotiate on: Cash value, category analysis, and salvage value. Things I cannot negotiate on: your deductible, the options that exist on your car (if I missed something, let me know. But each option is specifically defined. There is no room for interpretation as to what "Power seats" means.), tax/tags/title. If you feel that negotiations between you and me aren't getting far because you can't negotiate on what I can, then feel free to ask for my boss' phone number. I had one total loss settlement go all the way to our regional Vice President once. He settled for $250 more than I was offering. I was thoroughly puzzled, as the guy showed no interest in talking to me about it. I'm happy to give you my boss' number, but give me a chance first. If the first thing you want to do is talk to management, you're just going to annoy me, and them, and make it tougher on yourself. You approach my boss in an understanding way, he's going to be a lot easier to deal with.
Bring solid evidence to negotiate with, as well. You give me good info, and I'll deal with my boss and work it out for you. You bring me a newspaper clipping for someone in California selling a car similar to yours and asking for $2000 more, though, and I can easily dismiss it. Bring me some info on cars similar to yours that were sold around the block from your house for more, and we've got something to go on.
My goal with a total loss (and really, and customer interaction) is to get you off the phone/out of my office as soon as possible, and as happy as possible. The last thing I want is for you to call my boss with a legitimate complaint about something that I did or failed to do.