When your car is declared a total loss, storage fees can quietly eat away at your settlement. Tow yards and repair shops typically charge daily for keeping your vehicle. If your insurance company delays processing the claim, those fees can accumulate fast and reduce the amount you ultimately receive.
By the end of this article, you’ll understand how storage fees affect your payout, who’s responsible for them, and how you can minimize or avoid these charges altogether.
Why Storage Fees Matter
Every additional day your totaled car sits in storage, your settlement shrinks. Insurance companies often deduct storage fees directly from your payout. In some cases, you might even be forced to pay them out of pocket.
For example, if your vehicle’s market value is $12,000 and $1,000 in storage fees accumulate, your payout could drop to $11,000. That’s why it’s crucial to act fast and understand your responsibilities.
Who Is Responsible for Storage Fees?
Responsibility for storage fees depends largely on fault and your insurance policy terms. If you’re at fault, your insurer usually covers storage, but only for a limited time. If the other driver is at fault, their insurer should pay, though liability investigations can cause delays.
Always check your policy for specific limits on storage fee coverage, and confirm with your claims adjuster how many days of storage they will pay for.
How to Minimize Storage Fees
Time is money when your vehicle is sitting in a storage yard. The sooner you act, the more you can save.
Start by contacting your insurance adjuster immediately and ask for a total loss determination. Once your vehicle is declared a total loss, find out if you’re allowed to move it. If so, consider transferring it to a free or low-cost storage option, such as your home garage.
Additionally, request written confirmation from your insurer about who is responsible for ongoing storage. Some policies reimburse only for three to five days after the total loss determination, so clarity here is essential.
Keep Detailed Records
Maintaining organized records can protect you in case of a dispute over storage fees. Save all correspondence with your insurer and the storage facility. Keep emails, call logs, and any notes from conversations.
Request a detailed invoice from the storage facility that lists dates, daily rates, and the total amount due. Also, document when you notified the insurance company about the vehicle’s location. These details are crucial if you need to challenge unfair deductions later.
Disputing Unfair Deductions
If your insurer deducts excessive storage fees from your settlement, you have options. Start by reviewing your policy to verify what’s covered. Then, ask your adjuster for a clear explanation of why specific fees were deducted.
If delays were caused by the insurer, negotiate for them to cover the extra fees. Don’t hesitate to escalate the issue by filing a complaint with your state’s Department of Insurance if necessary. Many states require insurers to act promptly and fairly.
Legal Options if Disputes Persist
When informal negotiations fail, legal action might be your next step. For smaller amounts, consider filing in small claims court. For larger sums, hiring a consumer protection attorney may be worthwhile.
You can also report suspected bad faith practices to your state’s insurance regulator. These legal avenues can help you recover unfair deductions and hold insurers accountable.
Final Thoughts
Storage fees after a total loss can be a hidden financial trap. But with swift action, clear communication, and thorough documentation, you can prevent these costs from severely reducing your payout.
Stay proactive. Confirm your responsibilities early, move the vehicle if possible, and don’t be afraid to challenge your insurer if you feel they’re shifting the burden unfairly. Your total loss settlement should help you replace your vehicle, not pay for unnecessary storage.
