When you want to get a little more for your car, you can't be nice. The adjuster knows what he can do, he's done it a hundred times before and he won't hesitate to do it again to close that file. But to you, the individual, it's a brand-new thing. And it's money in your pocket.
After my friends get in a car accident, they come to me to ask how to deal with the claims adjuster. Recently, I helped a friend who had totaled her Mini Cooper and she got $1,500 more than what the insurance company first offered her.
You have to know the business and understand the role of the auto claims adjuster and then you can negotiate effectively on your own behalf. It's not that the insurance companies are trying to cheat their clients. Actually, they want you to be happy. But they are in a hurry, with lots of open cases, and don't have the time or inclination to thoroughly research your case.
The Life of an Auto Claims Adjuster
I spent four years as a claims adjuster for a nationally known insurance company, and my specialty was dealing with total loss claims as well as theft vehicles that weren't recovered. So it was my job to determine the value of the vehicle, present this to the customer and convince them to accept it.
Being a claims adjuster is probably one of the most stressful jobs. I actually lasted longer than most people. If you have a low tolerance for people yelling at you, you won't last long. There were times when my office had bomb threats and even times when I was confronted physically.
My caseload was about 150 open cases. Just think of keeping up to date and knowledgeable about all 150 cases and the high volume of telephone calls that goes with it. In addition, you are meeting people face to face under circumstances which aren't always pleasant.
I also had an extremely high volume of calls, probably 60 calls going out and 50 calls coming in each day. The calls came in so fast that if you picked up the phone there might be someone on the line before it rang. That happened three or four times a day.
How the Claims Process Works
I worked the back end of the claim. I got the file after liability had been settled, so they knew who was at fault. It was my job to decide how much to pay the person for their car or to decide if the vehicle was repairable.
Auto claims adjusters love it when a customer is happy with what they offer. For example, if Mrs. Smith is happy with the amount we give her, she signs the paperwork and we're done. But in most cases, they aren't happy. People get too attached to their cars, and they think the car is worth more than it really is. People might not have gotten a car in four or five years, and they don't realize the car has depreciated considerably. That is where the big disputes come in.
When the customer disputes the claim, the adjuster will explain how they got their figure. Basically, they have prepared what is called an evaluation report that uses two to three similar vehicles ("comparables") as pricing references, but it can use a dozen or more.
Get More Money for Your Car
If you are offered $15,000 and you just tell them you want $18,000, they aren't going to give it to you. You have to come up with a reason for them to give you that much. Every adjuster has a little flexibility, and they know that not everything will go through easily. So they usually have an extra $500 to settle a case.
The best way to get more money out of an auto claims adjuster is to challenge the evaluation report. Take a look at the vehicles they used as comparables. A fair market value is determined by taking the average of the comparable vehicles. The key word there is average — it only takes two vehicles to make an average. So if you have two cars worth $20,000 but the six others are worth $14,000 you can ask your adjuster, "Here are two cars that are just like mine, so can you base your evaluation report on those?"
Another tip is to ask the adjuster to reduce the number of comparables. You can ask him just to use the top five vehicles and that might be enough to bring the price up quite a bit. Believe it or not, a lot of people don't do that. But the smart ones do. When someone did that to me, it made me wonder if they had talked to some other adjuster who had coached them.
If you have a classic car, 90 percent of the time the insurance company will not evaluate your car correctly. Say you have a 1980 Pontiac Trans Am, the old Smokey and the Bandit car. I could see an evaluation report coming back at $4,500. But in all honesty, that car, in pristine condition, is worth about $25,000. If you know that, get ready for a lowball offer and find your own comparable vehicles to get your price to where it deserves to be.
Another thing that consumers don't realize is that in some states, you have the right to hire an independent appraiser. This could be a good move depending on the cost. But if you have a 2004 Camry, there isn't much to be gained if the independent service costs $400.
Be Prepared for Pushback
If a customer challenged me, I had a few lines I would always use. I'd start by saying something like, "I think our appraisal looks good. I'm sorry it doesn't satisfy what you think it's worth." But then, if they still didn't agree, I would say, "Here's what I can do. I can go up another $500 if you are willing to settle." And sometimes that worked.
Just remember, the auto claims adjuster wants to settle your claim. They have a heavy caseload, and they are looking to close 40 cases a month. So there is always about a $500 window where they can settle a claim immediately. If a claimant pushes for more money, it might take longer to get approval while the adjuster gets a signature from their supervisor.
When Your Car Is "Totaled"
If the repairs to your vehicle were less than 50 percent of the car's value, we fixed it. (Note: This percentage varies by state.) But what if the customer had a car that was worth less? If they went to sell it and the buyer found it was in an accident, they would reduce their offer or refuse to buy it. This is called "diminished value" and the insurance company won't pay for this loss of value.
So if you are close to the 50 percent threshold, you can argue with the adjuster to just "total it out." That way, you get a check that you can put toward the purchase of your next car, rather than getting your old car back.
Tell the adjuster, "There might be some hidden damage to the car that you didn't find. It could have damage to the unibody frame or the rails or maybe something is going to go wrong with the air-conditioning. Therefore, can you please total out the car?" Sometimes, this will persuade them since they know you're right.
Avoiding the "Preferred" Repair Shops
You should also be prepared for the auto claims adjuster to try to steer you toward their preferred body shop. We would tell our clients, "We would like to help you get your vehicle repaired and we do have a list of preferred shops that we would like for you to use. They are all certified and do top-of-the-line work."
My recommendation is to ignore this offer and go with the shop you want. If possible, take your car to a shop that specializes in your make of car. If you have a fairly new car, like a 2007 Honda Accord, take it to a Honda body shop. I can tell you right now our preferred shops, once a month, came around and bought us lunch and gave us little gifts to get us to push business their way. If the vehicle was going to be repaired we would push people toward one of our shops.
Being an auto claims adjuster took a toll on me. I'd say it changed my view of human nature. It opened my eyes to the fact that some people are honest but some people are just trying to get as much as they can.
But it's also important to be ready to negotiate and stand up for yourself. I remember I offered this one guy a settlement, and he accepted it right off the bat. He said he was a religious man and respected what I did and assumed I was being honest. It almost made me feel bad. I wanted to say, "Wait! Wait! Don't you want to negotiate?" But being a good claims adjuster, I would never do that. So just remember, it's your car, you paid all those premiums, and you deserve whatever your car is really worth.
Read more articles in the Edmunds Confessions Series.