The balance on your car loan or the original purchase price of the car is not relevant to its current value. Cars depreciate rapidly. That is the reality of the whole love affair we have with our automobiles. If you paid $20,000 for your car a year ago, it might only be “worth” $10,000 now, even though you still owe $18,000 on it. Why? Because you are paying mostly interest in the first half of the life of a car loan, and the balance doesn’t go down as fast as the value of your car. There is a point in the second half of the loan period where the balance and the value of the car meet, say at $5,000. Once you pay off the car, it's worth more than the balance. It doesn’t seem fair, but that’s how it works.

You must negotiate your best deal with the claims adjuster. Do your homework. First, make sure you aren’t paying too much for the car in the first place. Try to get the best financing with the lowest interest rate. Look for comparable vehicles and their selling prices. And be assertive when settling with the insurance company and fight for what’s fair and reasonable. If, after all of that, you feel they are not offering you enough, there is a clause in your contract you can invoke to hire, at your expense, a third opinion appraiser. If the two adjusters can’t agree, the agreement calls for even a third party (umpire) to settle the dispute, who you both pay for. That clause usually gets triggered only in high-value items. It’s not worth the cost for lower-valued vehicles.