I fell into the job of working in auto insurance. Quite literally, I fell and sustained an injury severe enough to require surgery. So while I was recovering from surgery, I knew I needed a desk job since I would not be able to turn a wrench as a mechanic for at least a year or more. After some research, I saw some postings for adjusters and most positions offered on-the-job training.
[Ed note: Ada is a reader, car enthusiast, and auto insurance adjuster. They agreed to write this post on the condition that we do not reveal their employer. – MH]
Once I finished with the interview, I was off on a crash course in Auto Damage Adjusting. It turns out the insurance industry will train anyone, you don’t have to know about cars, or even like them. This surprised me a bit, since I have a bunch of cars here at home, love all things with wheels, and impress absolutely no one when I can tell the tire track in the mud of things like a BFG A/T tire. So here is a car nerd who found himself working in a total loss department, virtually, from home.
It might sound decent at first, but I have a hard time focusing on the job requirements when I feel that so many of these cars could easily be saved. My job is to KILL cars. For example, any older car that gets a light hit that requires a handful of parts and paint labor? It goes to the scrap yard in a hurry. The formula is simple: Get the value for the car, write a damage estimate, add 30% for potential supplementary repairs, get a bid on the salvage selling price and then do the math. If the value is higher than those three combined, it gets repaired.
Keep in mind this is for the listed part price, plus labor, plus paint if necessary. That little distance sensor in your grille that helps with your cruise control? Usually anywhere from $500-2500 for that one sensor. You also have to pay mechanical labor hours to have it calibrated. In short, modern cars have so many complex components that they are very expensive to repair even with what looks like light damage.
What a person like me loses sleep over, now that I’ve been doing it for a short while, is the stories you hear. That’s the other part of the job. You have to call the owner and let them know their car is determined to be a total loss. This is not fun at all. There is no upside to these conversations. Owners can fall into many different categories, but not many people like to go car shopping unexpectedly. The majority of folks do not want to suddenly replace their car. I’ve heard elderly folks candidly admit that the car that I just deemed a total loss was supposed to be the last car they ever owned.
They don’t want a new, fancy car with fussy screens and beeps and bings. They like the one they know and use. I’ve called people who have unfortunately gotten very bad deals at those buy-here-pay-here places. How about owing $22k on a 9-year-old Nissan Sedan that is valued at less than half that? The financing fees and balances owed can cripple people. I’ve totaled people’s dream cars, the $60,000 sports car that the owner then spent thousands on modifying but didn’t add the aftermarket parts to the policy as an endorsement? Not covered, sorry about the loss.
The car gets valued as the VIN decodes. If you add parts, vinyl wrap your car, upgrade suspension or wheels, better add that to the policy or never plan on getting a return on it if it is in an accident. I don’t relish these policies. In fact, I modify my own cars, upgrade loads of stuff, and it’s not on my insurance policy either.
Another thorny issue that is tough for people whose cars get totaled is the high price of new and used cars these days. Even if the value of your 2004 Jetta is low, at least you own it, have no payments and it runs OK most of the time aside from eating bulbs like movie popcorn. The devil you know is sometimes nicer than the huge new car financing you are suddenly forced to contend with because the payout on your old car likely won’t cover you for an exact replacement.
Sure, there may be some high-priced ones selling, and some lower ones, but when these companies plug in the software to “adjust according to mileage and condition” sometimes the values that come back are a bit offensive. Guess who has to let the owners know. Yup, I do. I get to tell people the company is paying $20k for a vehicle that is listed all over the internet for $22k-$23k. Of course, this leads to disputes, and eventually, with limited rental coverage and a need to settle and move on to get a replacement car, guess who ends up with the short stick? The customer.
I’ve reviewed over a thousand cars in a short time and only two of those were deemed “repairable,” which meant that the damage was way too light to meet the value. The rest were deemed a total loss. You might think that being repaired was still preferable. But consider that a vehicle can be in the shop for months waiting on parts that are backordered or in short supply, especially after the pandemic supply chain issues. Some people do not have rental coverage and need a car to get to work, others have limited coverage that runs out.
Does that make me feel better about totaling cars? Nope. I still feel terrible. But the kicker is that the job pays better than what I was making when turning wrenches. So how do you leave? I haven’t found a solution to that question yet. For now, I’ll be the person who takes the extra time to listen, who notices the great condition your car was in when rating it to send to the valuation company and the person who will genuinely care that you have enough rental time to work your way out of the mess that accidentally happened.
My ’66 Thunderbird was totaled in a rear-end collision a few months ago, but I had the fortune of the insurance adjuster assigned to me being into cars. He even drove out to inspect the car in person.
Thing is, the car still tracked straight and drove fine, and the body shop I took it to to get a quote said they estimated it’d need about $8-10k in repairs. And the adjuster valued my car at about 12 grand, which was frankly more than I thought it was worth… but insurance declared it a total loss anyway.
I ended up buying it back from insurance (I didn’t want it to get bought by someone who would part it out), and spending most of the rest of the insurance money on a 1990 Miata to drive in the meantime, so something good came of it. But I am still left with this T-bird that runs and drives, but which I can’t legally drive until I’ve saved up quite a bit for repairs so it passes inspection.
So uh… thank you insurance adjusters who try to do the right thing. These situations tend to suck for everyone involved, in my case it ultimately worked out for the better, even if I now have a huge driveway ornament I can’t do anything with for a long time.
Great article. I sort of knew the deal and the details are very interesting. There is a lot of cost in stuff designed into cars that comes out of focus groups seemingly made of teenage girls.
I had a vehicle that I was hoping was going to be totaled, but they did not, they fixed it and then within a year I ended up getting rid of it for $2000 after they put $7500 in repairs into it. Was the oddest thing.
Well not totally odd, when the adjuster came out to deal with all the front end damage to my Dakota they had no idea that the transfer case was starting to be wonky and the AC was shot and the bed’s wheel tubs were starting to rust out, they just dealt with the whole front end, radiator, accessory drive, and the hood from when some lady leaving church in her S class felt stop signs were optional.
But yea, there was no way an at that time 12 year old truck with 160,000k in miles on it was worthy of $7500 in mechanical and body work. And I always had wished they had just totaled it and gave me that money lol.
I went through all of this for the first time last October when a texting driver blew a stop sign and pulled out directly in front of me on a 55mph road. My 2021 Crosstrek was rightly mangled from t-boning her giant Yukon at speed. The entire process was beyond infuriating. For starters, her insurance payout limit was $25k, and my trek was only a year old and valued at around $27k according to her insurance. This resulted in me having to get my own insurance involved to make up the difference, which restarted the entire process. Her insurance deemed my car a total loss, which frankly was a bit of a relief to me because I didn’t really want it back after that much damage. My insurance on the other hand initially wanted to repair it, which triggered a debate between the two companies that resulted in yet another delay during which time my rental car timed out and my wife and I had to deal with sharing a single car (or me daily driving my 68 bug in 30 degree weather with no heat)
In the end, it all got settled, the car was totaled out, and I was able to order a brand new 2023 Crosstrek in the color I wanted (cool grey khaki), but I still got screwed as I went from a loan that was financed with 1.9% interest, to a brand new loan that was financed with 6.9% interest and that’s with a stellar credit score.
A buddy of mine went through this same ordeal where they had stellar credit, great APR and had a car totalled in an accident where they were not at fault. He pressed for reimbursement of the sales tax, which often gets overlooked, and the difference in finance costs on the replacement vehicle.
I have similarly learned that you have to fight to be made whole. Like the author pointed out, people don’t have the time and give in to get it settled fairly.
I really wish I would have fought for the cost difference of interest, but like you said it’s easier to just give in to get the process rolling along. Even more painful is that I couldn’t find a replacement 6-speed manual Crosstrek, so I settled for a cvt. So it goes.. (I actually like the cvt for daily driving, but I miss my manual)
Being an adjuster for 30+ years, this was one of the toughest parts of the job to total cars. The metric that I used was more than 50% of the value of the vehicle at the moment of the loss. This was 10+ years ago and before the sensors got to be more stuffed in the front and rear end of the vehicles. You could get dinged on your performance evaluation if you ended up approving the vehicle for repairs and there were hidden damages that raised the value to repairing the vehicle for more than the actual value of the car.
The most totaled car? Minis. They would allow for people to walk away from accidents by forcing the engine to dive to the ground. There also was no room for any exterior parts to move into the engine bay without taking out major engine components as well. A lot of the other vehicles were the older models, since the cost for components stayed high while the value of the vehicles were dropping steadily.
I did try to take into account changes that the insured did to the vehicle, but most of them did not make much of a difference (maybe $200 to $500 on a $10k+ vehicle).
I got out of auto appraisals since the job became a race to the bottom for the appraisers to make any money.
I say this as an auto enthusiast: We have been doing basic transportation completely backward in most of the U.S. for more than 50 years. And each and every one of us working class Joes, Janes, and Jays gets the costs passed on to them.
The system is working as intended. We’re forced to pay monthly to a rich corporation with politicians in its pockets and in exchange, we get the pleasure of dealing with adjusters who look for any little reason for their employers to not pay out a claim.
The corporation makes money, and gets to keep it too! Isn’t that great?
Yup. Just peachy.