New York Total Loss Settlement Rules Under Regulation 64

In New York, a total-loss cash offer must be built from one of the valuation methods in Insurance Regulation 64 (11 NYCRR 216.7), and the actual cash value it pays includes sales tax. The fight is over the inputs: whether each comparable car truly matches yours, whether every deduction has a dollar basis, and whether the tax is in the total. If the payment still cannot buy a matching car, you have 35 calendar days after the insurer mails it to say so in writing, and the insurer must reopen the claim. Today, email the adjuster for the valuation report and the method behind it.

What the offer must be built from

Regulation 64 sets the floor: before your deductible and other deductions, the insurer's minimum cash offer must equal one of these.

• Two price guides. The average retail value of a substantially similar car in two guides the Department of Financial Services (DFS) approves, named in the rule as The Redbook and the N.A.D.A. Official Used Car Guide. The insurer adds options the guides miss, can subtract up to $100 of documented dealer preparation, and owes you a detailed copy of the calculation by the date it pays.
• A dealer quote. A qualified dealer within 25 miles of where the car is garaged quotes a substantially similar car you could buy for the offer plus deductions. The insurer tells you by certified mail or a recorded call, and the car stays available three calendar days after you acknowledge that notice.
• An approved database. A computerized valuation approved by the DFS superintendent, pricing the car within 100 miles of where it is garaged from licensed dealers' sales in the 90 days before the loss and cars still for sale.
• Best available method. When none of those fits, the insurer uses the best method it has and explains to you how it reached the number.

A substantially similar car has the same make, model, year and condition as yours, with all your major options, and no more than 4,000 miles or 10% over your mileage, whichever is greater. Hold every comparable in the report to that test.

Deductions for prior damage or condition must be measurable, itemized and stated in dollars, and each is capped at what fixing that problem would add to the car's resale value. Actual cash value adds the sales tax you would pay to replace the car; title transfer fees are the insurer's choice.

The insurer's clock

What to do today

1. Email the adjuster the letter below and keep the sent copy.
2. Check your car's line. Match year, trim, engine, packages and mileage against your window sticker, registration and last service invoice. The valuation report checklist covers each field.
3. Strike the bad comparables. Mark every one that fails the substantially similar test above.
4. Build your own list. Save three or more listings from dealers inside the dealer-quote radius above for the same make, model and year with similar miles, recording VIN, price, mileage and seller phone. Add written quotes from two local dealers.
5. Get a second number from DFS. Email consumers@dfs.ny.gov with the VIN, year, make, model, body style, engine size, major and aftermarket options, mileage, date of loss, ZIP code and a daytime phone. DFS mails back a valuation based on Redbook and NADA retail values.
6. Counter once, in writing, with every attachment, and request a supervisor's review if the adjuster repeats the first figure.
7. Sign only what settles the car. New York bars an insurer from requiring a release broader than the settlement, and a check on your own claim must carry no final-settlement language.
8. Turn in the plates before you drop coverage. DMV requires plates and registration back, with form PD-7, by mail or at an office, before the liability insurance ends, or it suspends your registration.

Where it splits

• If the other driver's insurer is paying, the same valuation methods and the right of recourse below cover your claim. Within 10 business days after finishing its investigation, that insurer sends a written offer computed as it would for its own policyholder, reduced for any share of fault you carry with a full written explanation, or a written denial with reasons. Its delay letters come every 60 days, and it must decide within six months of your notice. You can also claim on your own collision coverage, if you carry it.
• If the car is nearly new, two rules change the math. A current-model-year car, or last year's model bought new within 90 days of the loss, is paid at the price of a new identical car minus 15 to 53 cents per mile, scaled to the purchase price, unless the standard methods pay more. A car bought from a dealer within 180 days can be capped at what you paid plus documented improvements, minus the deductible, and a capped offer carries no right of recourse.
• If you want to keep the car, the insurer subtracts its salvage value, and on request it must name a licensed salvage dealer or dismantler who will pay that amount with no extra charges. Sales tax is figured on the pre-loss value before the salvage comes off. For a car eight model years or newer with repairs above 75% of its value, the insurer holds at least half the payment until you hand over the title, and DMV returns it branded REBUILT SALVAGE. See keeping a totaled car.
• If you have a loan, the insurer can pay the lender enough to clear it and send you the rest once it has the lien release and signed title. If you owe more than the payout, the whole payment goes toward the loan, the insurer can require your signed title before paying, and what remains is the gap. A GAP waiver from the lender or dealer, or GAP coverage on your policy, pays the shortfall, and some financing contracts accept the insurer's settlement as payment in full. See totaled car with a loan balance.

Your leverage

• The right of recourse. Within 35 calendar days after the insurer mails payment, write that you cannot buy a comparable car for that amount. The insurer reopens the file and either identifies a substantially similar car at a dealer and pays enough to buy it, pays the difference between its payment and the cost of one you locate, or buys that car for you with your consent. The clock runs from mailing, so depositing the check keeps this right. The insurer is excused if its final offer already named a specific available car by VIN and stock or order number, available for at least three calendar days after you received the offer.
• Appraisal. If your policy has an appraisal clause and the only dispute is the amount, you and the insurer each pick an appraiser, and an umpire breaks any deadlock. Read the clause for its demand steps and cost split.
• A DFS complaint. File through the DFS complaint portal or call (800) 342-3736, weekdays 8:30 a.m. to 4:30 p.m. Once DFS asks about your claim, the insurer has 10 business days to send it the information.
• Small claims court. New York small claims hears cases up to $10,000 in New York City, $5,000 in City Courts and in Nassau and western Suffolk counties, and $3,000 in Town and Village Courts.

Call a New York insurance lawyer when the amount in dispute exceeds your small claims limit, or when the insurer ignores your recourse letter or appraisal demand.

Letter to the adjuster

Subject: Total loss claim [number]: valuation basis and revised offer

I received your total-loss offer of $[amount], dated [date], for my [year, make, model, trim], VIN [VIN]. Under 11 NYCRR 216.7(c)(1), please tell me in writing which valuation method you used and send:

1. The full valuation: the price-guide calculation, the dealer quote with the car's VIN and stock number, or the database report with each comparable's VIN, price, mileage, options and location.
2. Each deduction in dollars with its basis, under 11 NYCRR 216.7(b)(12).
3. The sales tax amount and rate in the offer.

Your report lists my car as [wrong item]. It has [correct item], shown on the attached [document]. Comparable [number] fails the substantially similar standard because [reason]. These cars are for sale near me: [VIN, price, mileage, seller and phone for each]. Please revise the offer to $[amount] plus sales tax, less my deductible.

[Recourse letter, after payment:] I cannot purchase a comparable vehicle for the amount you paid. Please reopen my claim under 11 NYCRR 216.7(c)(4).

[Name], [claim number], [phone], [email]

Today

Today: email the letter, pull your window sticker and last service invoice, and save three matching listings with VINs.

Next comes the insurer's written answer: a revised valuation or its reasons for holding the number. If the figure is right, sign the title over and watch for payment. If it is still low, file with DFS that day and demand appraisal; once the check is mailed, send the recourse paragraph with your listings.