If my car has been declared a total loss, do I have any options before arbitration?
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If my car has been declared a total loss, do I have any options before arbitration?
My car was recently hit head-on (their fault). Now I’m dealing with the total loss department who seems to be significantly undervaluing my car. The Kelly Blue Book, NADA, Cars.com, and Edmunds.com appraisals all came in $2,000 to $3,000 more than what AAA initially offered, and after sharing my research they’ve added another $1,000. Perhaps more importantly, the actual cost to purchase a car with the same options and similar mileage is still $1,000 to $2,000 below AAA’s offer. AAA insists that they have to discount what these cars are selling for by about $1,900 because they don’t pay for dealer overhead. Is that discount reasonable?
Asked on June 13, 2013 under Accident Law, Michigan
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 10 years ago | Contributor
The insurer should pay the then-current fair market value (e.g. Blue Book value) for the car and is not supposed to further discount that value; on the other hand, they only have to pay the current fair market value, not your actual cost to purchase, which may indeed be higher. If you have arbitration scheduled, your options are either 1) take the offer as is; 2) see if you can't get them to come up a little more--though note that if you reject the current offer and counter, they would have the option of taking that offer off the table and going to arbitration, to see what arbitration awards; and 3) simply going to arbitration and trying to convince the arbitrator that the offer is too low.
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