What to Do if Insurance Is Not Paying Enough for a Totaled Car

Once your car is considered totaled after a collision, your insurer’s initial offer may fall short of covering the actual cash value of your vehicle. 

If insurance is not paying enough for your totaled car, you need a strategic plan of action. From gathering evidence to invoking policy clauses, you can push back against lowball offers and bad-faith practices.

As seasoned Utah car accident attorneys at Craig Swapp & Associates, we have guided countless clients across different locations and beyond through these disputes, helping them secure the full insurance payment for a totaled car they rightfully deserve. Whether you’re dealing with a stubborn adjuster or complex policy language, our firm stands ready to advocate for you every step of the way. 

When Is a Car Considered a Total Loss? 

A vehicle is typically declared a total loss when the cost to repair it exceeds a predetermined percentage of its actual cash value (ACV), or when it cannot be safely restored to pre-accident condition. Understanding when your car is totaled under Utah law and insurance practice is the first step to challenging an insufficient payout.

• Actual Cash Value (ACV): The fair market value of your vehicle immediately before the accident, calculated as replacement cost minus depreciation for age, mileage, and wear.
• Repair Cost: The insurer’s estimate to restore the vehicle to its pre-accident state, including parts, labor, and any required safety inspections.
• Salvage Value: The amount the insurer expects to recover by selling the damaged car to salvage buyers or through auction.

When this threshold is met or exceeded, the insurer will declare your car a total loss and extend a settlement based on ACV minus your deductible. Review your policy’s “total loss condition” section to confirm the exact percentage.

What to Do if Insurance Underpays Your Totaled Car

When the car insurance company is not offering enough, you must be proactive. 

Below are critical steps to bolster your car insurance claim.

1. Invoke the Appraisal Clause

Most auto policies include an appraisal clause, allowing either party to demand an impartial valuation. This is a powerful tool when an insurance payment for a totaled car appears undervalued.

• Within your policy’s specified window, send a certified letter to your insurer invoking the appraisal clause.
• Choose a qualified appraiser experienced in total loss valuations. Insurers often provide a shortlist, but you may select your own expert.
• The insurer designates its appraiser; both will review evidence independently.
• If your appraiser’s valuation differs materially from the insurer’s, both agree on a neutral umpire. The umpire’s decision is binding on ACV.

By invoking appraisal, you shift the dispute to arbitration – a less formal, faster process than litigation, often yielding a higher settlement.

2. Gather Evidence for a Higher Payout

Insurers rely on proprietary databases and depreciation schedules that may undervalue your vehicle. Combat this by assembling robust evidence:

• Research local listings and statewide classifieds for vehicles matching your make, model, year, mileage, trim level, and equipment. Use Kelley Blue Book and NADA Guides to document listing prices and recent sale prices.
• Obtain dealer invoice prices, recent auction results, and trade-in offers for similar vehicles to demonstrate market demand.
• Secure at least two detailed quotes from certified collision repair centers, focusing on OEM parts costs, labor rates per hour, and estimates for hidden damage – frame alignment, airbag sensor calibration, and computer diagnostics.
• Provide receipts for recent major maintenance (new brakes, tires, battery) or aftermarket enhancements (upgraded audio, suspension kits) that increase your car’s market value.
• Submit clear, date-stamped photos of your vehicle’s pre-accident condition – undercarriage integrity, interior upholstery, and any custom features (chrome trim, specialized paint).
• Hire an independent automotive appraiser with credentials from the International Automotive Appraisers Association (IAAA) or the American Society of Appraisers (ASA). Their ACV opinion letters carry weight in disputes.

Organizing these into a concise exhibit booklet helps demonstrate that your insurer’s valuation falls well below market realities.

3. Negotiate with the Insurance Company

Successful negotiation blends evidence with legal leverage.

• Crafting a persuasive demand letter, including your comparable sales chart, repair estimates, maintenance logs, and appraisal opinions.
• If frontline adjusters refuse, request elevation to a senior claims examiner or appraisal unit.
• Propose nonbinding mediation before filing a lawsuit – court-annexed mediation can resolve disputes with minimal cost.
• Utah’s Division of Insurance actively enforces unfair claims practices. A referral or complaint can incentivize the insurer to settle rather than face administrative sanctions.

Keep a detailed log of all phone calls: dates, times, names, positions, and summaries. Follow up with confirmation emails to maintain an evidentiary trail.

4. Consider Lawsuit for Bad-Faith Practice

If negotiations stall or the insurer’s conduct crosses legal lines, filing a lawsuit for bad-faith handling of your claim can yield greater leverage, and potential damages beyond ACV. Bad-faith claims pressure insurers to reassess lowball offers to avoid exposure to extra-contractual penalties.

What NOT to Do if Your Insurance Underpays Your Totaled Car

An insurance claim for a totaled car requires vigilance; avoid these common pitfalls:

• Don’t Sign the Release Immediately: Signing a “full and final” release before securing a fair settlement permanently waives your right to additional recovery.
• Don’t Accept the First Offer: Insurers often anchor low. Always counter with substantiated evidence.
• Don’t Miss Policy Deadlines: Late appraisal demands or suit filings can forfeit your rights. Review policy for time limits on appraisal, suit filing, and proof-of-loss.
• Don’t Handle Complex Disputes Alone: Policy language and relevant statutes can be labyrinthine. Engaging experienced car accident attorneys in Utah helps avoid missteps that could undermine your claim.
• Don’t Discard Damaged Vehicle Evidence: Keep all parts – including bent panels, airbags, and shattered glass – as they can prove repair complexity and justify higher valuations.
• Don’t Ignore Salvage Options: Understand whether keeping your totaled car and offsetting salvage value makes economic sense.

Staying alert to these DON’Ts preserves your legal rights and strengthens your negotiating position.

What if the Insurance Limit Exceeds the Total Loss

High-coverage policies can still shortchange you if you neglect nuanced provisions. Even if your policy’s limit exceeds ACV, insurers may offset salvage value or apply policy depreciation schedules that ignore real market trends.

If you hold an umbrella policy, ensure collision damage is properly integrated; some umbrella policies exclude collision, creating coverage gaps. Review policy declarations and endorsements for explicit collision coverage continuity.

Split Level Policy: Limit to Liability Coverage 

A split level policy segregates your coverages into discrete buckets:

Liability Coverage

Your liability coverage, although crucial for protecting you against claims by others, doesn’t directly compensate you when your own vehicle is declared a total loss. Instead, it sets the ceiling on what the insurer will pay third-party claimants for bodily injury or property damage that you cause.

If your totaled car caused damage exceeding those limits, you could face out-of-pocket liability – but your personal recovery for your vehicle itself must come from your collision or comprehensive coverage.

Collision Coverage

Your collision coverage is the workhorse for repairing or replacing your own vehicle after an at-fault accident or collision with an object. Once your car meets the insurer’s total-loss threshold, collision coverage shifts from repair estimates to computing your vehicle’s ACV.

Low ACV valuations often leave policyholders feeling shortchanged. That’s why gathering market-based evidence and invoking the appraisal clause is so vital: it presses the insurer to match your collision coverage payout to true local market values rather than generic depreciation tables.

Comprehensive Coverage

In contrast, comprehensive coverage steps in when your vehicle is damaged by non-collision events – think hailstorms, flooding, theft, or falling debris. If a windstorm hurls a tree branch through your windshield or your car is stolen and unrecoverable, comprehensive coverage treats the loss similarly to a collision total loss. When both collision and comprehensive apply, understanding how deductibles and limits stack ensures you claim every available dollar.

These limits can impact total loss claims in many ways, including:

• Inadequate Collision Limits: Lower collision limits can cap your total loss payout, even when liability limits are high.
• Deductibles and Thresholds: Each coverage part carries its own deductible. A high collision deductible reduces net ACV recovery.
• Policy Exclusions: Some split level policies exclude certain losses – read your comprehensive section for exceptions like wear-and-tear or mechanical breakdown.

When both drivers share fault, liability coverage may reimburse your collision deductible up to your at-fault portion – effectively reducing out-of-pocket expenses. For example, Utah follows a modified comparative negligence rule, reducing recovery by the claimant’s percentage of fault. If you share 20% fault, your ACV payout may diminish by 20% before collision coverage applies. 

Can You Keep Your Totaled Car?

Yes, you can keep your totaled car. 

When your vehicle is declared a total loss:

• Insurance Payout Adjustment: The insurer subtracts the salvage value from ACV before issuing your net payout.
• Salvage Title Branding: Utah requires titling the retained vehicle with a “Salvage” or “Rebuilt” brand, signaling it previously was totaled.
• Safety and Rebuild Requirements: To return to the road, you must rebuild the vehicle and pass a Utah Highway Patrol safety inspection, verifying frame alignment, brake integrity, and functional safety features.
• Insurance Implications: Post-rebuild, insurers may charge higher premiums or exclude collision coverage, treating the vehicle as high-risk.

Thus, keeping a totaled car will require time and cost that may exceed salvage value savings, safety liability if rebuild is substandard, and difficulty selling a salvage-branded vehicle.

Can  You Drive a Totaled Car?

In most jurisdictions, like Utah, a car branded as “salvage” cannot be legally operated on public roads until it has been rebuilt, safety-inspected, and rebranded with a “rebuilt salvage” title. This process ensures that major structural repairs meet safety standards before you drive it again.

You must:

• Complete Repairs: Engage a licensed repair facility to restore the vehicle to a safe, roadworthy condition, using quality parts and following manufacturer specifications.
• Undergo Inspection: Present the rebuilt vehicle for an official safety inspection, which may include checks of frame integrity, lighting systems, brakes, and emissions controls.
• Rebranding the Title: Once the inspector certifies the repairs, the DMV issues a “rebuilt salvage” title, lifting the driving prohibition.

Until these steps are completed, operating a salvage-titled car on public roads is both unlawful and unsafe. But if you surrender the salvage to the insurer in exchange for a full ACV payout, you no longer possess the vehicle; driving it is not an issue. If you’re uncertain about the salvage process or your rights under Utah law, consult a knowledgeable Salt Lake City car accident attorney to guide you through your options.

Consult an Accident Attorney to Appeal Your Insurance Claim

If you believe your insurance is not paying enough for a totaled car, don’t settle for the insurer’s first, lowball check. A knowledgeable Utah car accident attorney can:

• Interpret Complex Policy Language: Ensuring you invoke all available coverages and clauses – collision, rental reimbursement, gap coverage, and more.
• Assemble Persuasive Evidence: Presenting market data, expert appraisals, and repair estimates in a legally compelling format.
• Negotiate with Authority: Using formal demand letters, pre-suit mediation, and, when necessary, litigation to secure fair compensation.
• Pursue Bad-Faith Claims: Holding insurers accountable under bad-faith insurance claim laws .

By retaining experienced car accident attorneys, you maximize your leverage and improve the odds of securing full compensation for your total loss car. For dedicated advocacy and proven results, turn to Craig Swapp & Associates, your trusted Utah car accident attorneys. We also provide legal representation in Idaho, Washington, Montana, Oregon, Wyoming, Colorado, and Arizona. 

To schedule your free consultation, call us today at 866-308-3626 or fill out our contact form. We’ll fight for the ACV, your total loss car warrants and ensure you’re not shortchanged by unfair insurance practices.