Two years ago when snow squall hit a highway in Ontario, Canada I was one of the unfortunate people driving. Fifteen vehicles piled up. I was in the middle. A snow squall, by the way, is a snow storm which causes a whiteout, but lasts only few minutes. But in those few minutes I ended up on the wrong side of the auto insurance claim process. I will save the rest of the story for later and get straight to the point. I will assume you have comprehensive coverage, the accident is serious, the car is totaled but there is no injury.
1. Do not admit fault when you start a claim
Before you call the insurance company think about the events and present a clear story. But do NOT admit fault. If you admit fault and the other person does not, you are at 100% fault. The fault is something the insurer determines and we agree, disagree or negotiate because faults are not always clear. There are provincial/state fault determination rules which you and your insurer can use to determine fault.
Always remember to present your story in the best way possible and negotiate for less or no fault. If you don’t, no one will and you will be at fault! No one will tell you this: there is nothing like 50% fault from the premium payment point of view. A fault is a fault and your premiums will hit the roof if you do not negotiate properly. A basic rule of thumb is to save all your negotiations energy for claim settlement and then negotiate fault to the point of being totally absurd.
2. Do not let the insurance adjuster call you
It is important to recover from the shock and take your time before you can negotiate. If you get a call from insurance adjuster, offer to call back at a time that is convenient to you. Give yourself about 2 hours to call back after you have done your research. Research is mostly about finding the right value to claim. Give yourself at least a week to recover before you call the adjuster. To achieve the best results, it is very important to be fully composed and relaxed when you negotiate. Finding a new, good value car takes at least 20 days. Start looking immediately.
3. Pick an adjuster that is sympathetic to your case
When you call the adjuster, remember you can pick an adjuster if you know how to do it. If the adjuster sounds unsympathetic/unreasonable/hostile, request to talk to another adjuster. Adjusters will refuse. You have to stick to your request and decline to discuss it further. You can tell the adjuster that they are being unreasonable or hostile so you can talk to another adjuster. This is very important. Without the right person all your negotiations will be futile.
4. Calculate the true value of your claim using this method
Always remember that the value of your claim is what it costs you to buy a vehicle similar to the one that was in the accident. Always remember that the value of your claim is what it costs you to buy a vehicle a) similar to the one that was in the accident, b) available in the current market near you. That is not something your insurance company can randomly come up with. You have to show your costs based on what you are able to find in the market. Left to them, they usually come up with much less than what is due to you (potentially leaving you with an option 20% lower than what you deserve).
Search car sales websites for vehicles on sale within 15 or 20 kms from your city, focusing on finding the same model that has similar kilometers. You should leave the very low priced ones out and pick 3 or 4 higher priced vehicles and average them. Your adjuster may ask you to drop the high priced ones. But never let the adjuster not consider the market price.
Do this search and averaging before negotiating so you know what to expect. Your claim settlement will be an average value plus HST, plus some risk amount for the purpose of negotiation. Never ask the actual value you expect (that is the baseline you are willing to settle for); always ask about 5–10% more and back this up with the average price of vehicles for sale.
Remember to keep a bank fund ready that will allow you to efficiently buy a vehicle when you find it. Do NOT wait for claim money to reach you. Get the best value vehicle you can from money borrowed from the bank and return it once you receive your claim.
Drive safe. There is almost always something we could have done to avert that accident or escape from it. That something may not be just ‘hitting the break early’, it may be your choice to drive at that time and place. Precaution, at the end of the day, is the best insurance.
So, you may be wondering where is the 5th thing!
5. Do not negotiate with your inner voice when it comes to road safety.
Take that turn, drive slow, or make the call not to drive. Avoid accidents.
Featured photo credit: Citroen via albumarium.com