Robert Guerrero
We are delighted to have Auto Insurance Report share more about what we're doing at ClaimBuyout and how we're another option in the auto claims process.
Reprinted with Permission Of The Publisher (September 29, 2025 - Vol. 33#5/1540)
A Third Option: Paying Cash For Repairable Auto Claims
Some drivers look at their car after a collision and wish their insurer would just total the mess. But until now, if the carrier decided to repair the damage, the policyholder had little choice other than to take the tainted car back.
ClaimBuyout, a company launched in 2020, is working with carriers to introduce a new choice for cranky policyholders with a repairable claim: a cash offer for the vehicle’s pre-accident value. Two top 25 carriers and about a dozen smaller auto insurers now offer the option.
Owners might be grossed out by a car that was stolen and recovered with damage, they might not feel confident in its safety after a major repair, or the car could remind them of a traumatic accident. Some owners just don’t want to deal with a long repair process and rental cars, or they’re worried that the vehicle’s stained history will make it difficult to sell in the future.
“We’re here to be a third option, alongside a repair and a total loss, that just simply doesn’t exist today,” said ClaimBuyout co-founder Mark Walsh.
ClaimBuyout buys the car from the policyholder for its pre-loss value, and the insurance company pays ClaimBuyout the value of the repair estimate. Then ClaimBuyout arranges to tow the car to one of its auto garage or dealership partners before selling it at wholesale auction, typically online through ACV Auctions. ClaimBuyout exclusively buys and sells repairable cars with clean titles, rather than totaled cars with salvage titles.
The offer can turn a tense claim into a customer service win for the carrier and the repairer, Walsh said, and the policyholder walks away happy with money instead of an unwanted car.
The company has now trained more than 2,000 auto insurance adjusters on how to use the ClaimBuyout process, Walsh said.
Walsh and ClaimBuyout President Robert Guerrero launched the business just as Covid-19 began shutting down offices and restaurants in March 2020. The company trudged through the pandemic while dialing in its proprietary pricing model that determines the pre-loss value. It also worked to shorten the time it takes to sell the car after acquiring it from less than 60 days to less than 30.
For the owner and insurance company, the claim file is typically closed in under three days.
“You turn a pretty upset customer into a pretty darn happy customer,” Walsh said.
Both Walsh and Guerrero held leadership positions at salvage operator IAA, and their relationships in the salvage world helped to build the network of dealers and other partners that allows ClaimBuyout to quickly store and sell damaged but repairable cars.
Walsh said the general criteria is any car with damage between 20% and 70% of its pre-loss value that a policyholder does not want to repair. The average car that ClaimBuyout purchases is worth about $30,000 pre-loss, with a repair estimate amounting to 30% to 40% of its value.
Once the damage to newer cars exceeds 70% of their value, insurers are likely to declare them a total loss, according to data from CCC, the claims technology vendor. The average repair estimate for 1- to-3-year-old vehicle flagged as a total loss was about 77% of its pre-loss value. The estimate may not include all supplements.
A lot of the cars purchased by ClaimBuyout took a substantial hit, which may help explain why the owner does not want it repaired. Of repairable cars worth $25,000 to $35,000, the average repair estimate nationally ranged from 16% to 22% of value, according to CCC data for 2025, slightly lower than that 30% to 40% sweet spot that typically results in a referral to ClaimBuyout for a cash offer.
ClaimBuyout is currently expanding its buying strategy to include more cars with hail damage, offering carriers and policyholders a way to resolve claims quickly after a storm that may burden local body shops with more cars than they can handle quickly. The company recently launched a mobile app called Hailo that adjusters can use to take photos, enter the VIN and automate a quick offer on the car.
A top 25 insurer gave ClaimBuyout offers to policyholders at a drive-in event following a large hailstorm this year.
“That was a really good case scenario, knowing how many cars were damaged in this area, and how long it was going to take you to get your car into a shop to get it repaired,” the claims manager for the insurer said in an interview. “Some people don’t want to drive around in it if it’s going to take four months before
they’re able to get into a shop.”
ClaimBuyout’s first customers were policyholders who preferred cash over waiting for their car during the Covid era, when parts and labor shortages caused long repair delays. While widespread bottlenecks have largely dissipated, repair times still are longer than before the pandemic due to greater vehicle complexity and the additional requirements to scan and calibrate advanced safety systems. Most policyholders who choose cash over a repair make that choice regardless of how long it might take to fix the car, according to two carriers that use ClaimBuyout.
The number of policyholders who choose ClaimBuyout today is small but growing. Walsh said the company has bought about $50 million in cars since 2020 and aims to double that by the end of 2026.
He estimates that up to a quarter of the 16 million repairable claims across the country every year have damage ranging from 20% to 70% of the cars’ value and would make for suitable ClaimBuyout offers.
One challenge for the business is the growing ranks of drivers who are underwater on their car loans. These “negative equity” claimants wouldn’t have enough cash to pay off the loan and buy a new car if they accepted the offer, so they need the vehicle to be repaired.
In the second quarter, 26.6% of trade-ins to dealerships had negative equity, according to Edmunds. Negative equity fell to 14.7% in 2022 when used car values were unusually high due to pandemic supply shortages. While the percentage of vehicles with negative equity has not returned to the 2019 level of 34.6%, the average amount of negative equity is at a record level of $6,754, up from the recent low of $4,487 in 2022 and higher than the average $5,317 in 2019.
A carrier claims director described the typical claimant opting for ClaimBuyout’s cash offer as the owner of an expensive luxury or imported car who would rather buy a new one than wait for a repair or drive a car that had been damaged.
“They want the path of least resistance; They’re just done with it right then and there, and they just get another vehicle and start over,” said the claims director, who estimated that eventually as many as 10% to 15% of claimants might opt for the cash offer rather than a repair. “We don’t see those kinds of numbers today, but I’ve always thought that it has that kind of capability as time goes forward.”
Improved claims satisfaction is the primary benefit for insurers, according to carriers that use the service. J.D. Power research has repeatedly shown that higher claims satisfaction boosts retention and customer lifetime value. The opposite is also true: About 80% of auto insurance customers who have poor claims experiences have already left or say they plan to leave that carrier, according to J.D. Power.
The ClaimBuyout option also closes a claims file in a matter of days, instead of requiring adjuster attention for weeks for a repair. The carrier still pays the original repair appraisal costs to ClaimBuyout, so there is no direct savings on the repair itself for the insurer. But clearing claims quickly can improve efficiency while eliminating rental reimbursement charges, creating some other financial savings.
Being able to offer ClaimBuyout can help adjusters improve the customer satisfaction scores by which they are often judged. “If they’re able to offer something to a customer, that just makes their experience all that much better,” the claims director said.
ClaimBuyout views the insurance adjuster as its customer.
“If we make the adjuster happy, then they’re going to continue to give us referrals,” Walsh said. “We get approval from the senior management of the insurance company, but repeat adjusters are the lifeblood of our company.”
Walsh said the company anticipated more friction from body shop owners, who might view a ClaimBuyout offer as taking away a repair. But so far that hasn’t happened, and one in five referrals now comes from shops. Insurers confirmed the lack of complaints from shops, noting that repairers don’t want to deal with an unhappy claimant.
“I think in their customer experience, too, if the customer says, ‘I don’t want to fix the car,’ they don’t want to force it,” the claims director said.
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