What Happens When Your Car is Totaled?
You’ve probably not felt this sad before. No. Not in a long time. After 8 years of dutiful service your faithful steady Chevy car is to be taken away as a worthless piece of junk; totaled by your insurance company.
Your car is totaled? What exactly does that mean?
The word “totaled” conjures up images of the terribly twisted metal carcass of what used to be a car after a terrible crash. But that is hardly the case. Most totaled cars look pretty much repairable.
This is why you have to understand the meaning of total loss from an insurance viewpoint.
Following an accident, a car is considered totaled or a “total loss” by an insurance company if the estimated cost to repair it exceeds 70 – 80% of the present value of the vehicle. Your state auto insurance laws also determine the extent of damage to be deemed as a total loss.
How do insurance companies total a car?
The process of totaling a car starts with your auto insurance company sending an insurance adjuster to evaluate the car. The adjuster assesses the extent of damage and determines the value of repair work to be done – inclusive of replacement parts.
The adjuster then establishes the current market value of the vehicle. If the repair cost is more than 70% or 80% (depends on the auto insurance company and your state auto insurance laws) of the present value of the vehicle, the adjuster totals the car.
So now what happens when your car is totaled?
Luckily, you have auto insurance and won’t have to suffer total financial loss because your car was wrecked in an accident.
The loss of your car is never a pleasant experience. You just have to wipe the odd tear or two and move on.
Your primary focus now is getting as much money as possible from your insurance company to buy a replacement. Or, on the other hand, you can’t bear to be separated from your beloved wheels and insist on having it repaired.
Whichever is the case, knowing how to navigate through the insurance process will help you avoid being screwed over by your insurance company.
- Determine the value of your vehicle
If the damage to your vehicle was extensive and your auto insurance company decides to total it, they will offer you a check for your car’s value.
This will enable you to shop for a replacement vehicle.
Do not accept this initial offer.
It is not their best offer. Insurance company agents are there to protect their principals’ bottom line and not your personal interest. So, they are going to give you an offer lower than the actual cost of your car. while your goal is to get as much money as possible to replace your totaled car.
Ask for a higher settlement amount backed with some evidence to support your claim. This could include pictures of your vehicle before the crash, receipts of the upgrades or enhancements done on it, and valuations done by another qualified automobile car shop or dealership.
You’ll be surprised at the extra amount you will get as compensation if you ante up your negotiation game.
Determine how much your car is worth.
When the decision is reached to allow you to repair the car, the auto insurer sends a check for the assessed value less the estimated amount the company would receive to junk the vehicle.
The insurance company then decreases the check amount by your deductible. Then it’s up to you to repair the car with funds in hand.
There is often a disagreement about the actual estimation of the value of totaled cars. In that case, you would have to seek the services of a professional auto body shop. What this helps you do is to provide the estimated cost of repair for your car including other charges. Ask a family member or a friend if they know of a reputable auto body shop that they can recommend.
The professional auto mechanic can also help you determine the worth of a replacement car. Getting this information will help you negotiate and get a better deal from your insurance company.
What if you would want to keep the car?
So you want your baby back. No other car would do. If you have decided to keep your car after it has been totaled, ensure that you are aware of the implications of your actions. Mechanical integrity is a major challenge of totaled cars. Fixing a totaled car may put it in a state considered fit for use but experts’ advice that keeping a totaled car is not always the best move.
An automobile, however good it may look after it is fixed remains very complicated, and there are good chances that some underlying faults that may be difficult to detect would remain and cause even worse accidents.
An insure.com article revealed that several faults become noticeable after in attempts to fix minor damages.
For this reason, insurance companies take a legal step to report cases of fixed totaled automobiles to relevant authorities.
Finding insurance coverage for a totaled car may be a problem.
Most insurance companies keep a record of cars declared totaled. This means that you may not be able to enroll in insurance plans provided by most insurance companies in your area.
Determining the actual market value of a totaled car is also a problem. Some insurers may find it difficult to agree with you on a method to come up with the exact estimate that determines how much they owe you for your totaled vehicle. In any case, when there is an impasse in reaching the exact cost of your car, you should keep the following in mind.
The first legitimate option permits the insurer to replace your car with an available and comparable car in your local area. Your insurer may also offer the cash value of a comparable car in your local area. In the last case, your insurer may follow other methods such as those provided by Kelley Blue Book and NADA.
Your insurer should also provide you with any information or document necessary for the transfer of ownership like license fees and other fees. It is very important that you know if the valuation of your car by your insurer is reasonable when compared to its real market value.
To ensure that this is the case, you can request that your car insurance company provide you with a loss valuation report. This report shows the comparable auto data used by your insurer to calculate the value of your vehicle.
The most important thing to do in the case of a totaled vehicle is to look for the best way to remedy the problem at a minimal cost. While keeping your totaled car may be fine by what you think, you should also consider the restrictions and possibilities of further damages. Your insurer remains your most dependable resort, but you have to ensure that the process ends in a win-win for you and your insurer.