I’m An Insurance Adjuster And I’m Going To Total Your Car (And Hate Doing It)

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.

The thing is, modern cars have expensive parts, complex safety systems, and repair requirements and they are laborious to work on. In addition, ever since the pandemic, salvage bids on damaged cars have been very high because there is value in repairing them, rebuilding them to sell used with a salvage/rebuilt title, or just using the undamaged parts. A modern Audi with LED headlights? $3500 per side just for the lights. Even a simple Honda or Toyota headlight can cost $750. I once wrote a 2020 Land Rover with a front hit where the front-end parts added up to $44,000.

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.

As the adjuster, you are under pressure to lock up as many claims as possible in the day to meet the company’s expectations. That means you need to crank through damage estimates quickly. Does it look broken? Replace. Is it likely to be broken behind that part? Replace. Could it be repaired by a skilled body guy? Sure, but we are in the business of killing cars, so: replace, replace, replace. The damage adds up fast, and when the software tells you you’ve hit the 75% or higher threshold of the value for the car, you wrap it up. Bam, the car is now deemed totaled by the insurance company.

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.

The valuation is not based on Kelly Blue Book or some other consumer value site. Instead, insurance companies use a “non-biased 3rd party evaluator” for vehicle valuations. Those valuation companies have proprietary algorithms that they do not share, even with us as adjusters. So when I get a value back on someone’s treasured workhorse pickup, or their reliable family CR-V that took their kids home from the hospital, I sometimes can tell that the valuation is rather lame.

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.

So every day I have the unfortunate duty to kill off cars, call people and give them bad news and often they run out of rental time before they get paid or have found a suitable replacement vehicle. This is not a great position for someone who loves cars. The fact that a deer can wipe out your car in an instant is well-known. But who would expect that backing into a hard snowbank that results in a minor dent to your bumper and quarter panel would total the car? It still runs and works fine. No airbags deployed. Yet, it dies for the dollars it saves the corporation because that means the company benefits from fewer days in rentals, no supplemental repairs, no body shops to argue over repairs about, no long delays waiting on out-of-stock parts.

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.