What Happens When my Car is Totaled After an Accident?
If you’ve been involved in a serious auto accident, you’re sure to feel glad that you’ve managed to survive. Unfortunately, your car may not have been so lucky. Once its damage has exceeded a certain point, its fate will likely lie in the hands of your insurer. You may consider your car’s problems to be relatively minor and want nothing more than to get it back on the road. Your insurance company, on the other hand, might be more inclined to declare it a total wreck.
The truth is that after conducting a post-accident appraisal, between 12 and 14 percent of insurers will declare a damaged vehicle to be a total loss. By this measure, one car out of seven is doomed to meet this fate post-accident.
The Parameters Insurers Use in Determining Total Loss
Before deciding to total your car, an insurer will consider several variables. These include:
– The amount of damage in relation to the value of your vehicle.
– The probable cost involved in making the needed repairs.
– The size of your deductible.
– The estimated value of the car if sold as salvage.
– The cost of paying the owner on a claim for total loss.
– The likelihood of hidden damage that will exceed the value of the car
The age and value of the car in question holds the greatest weight. The insurer who would have no problem paying for $4,000 worth of damage to a year-old Lamborghini will just as happily total a ten-year-old Nissan Sentra that has sustained the identical dollars’ worth of harm.
The actual ratio of vehicular damage to a car’s value will often vary by region. In many states, laws have set thresholds defining total loss according to a specific percentage of cost to repair in relation to the vehicle’s monetary value. For example, the laws of a certain state may require the insurer to total a car if the value of harm sustained exceeds 75 percent of the vehicle’s worth. By this metric, a $10,000 car with $8,000 worth of sustained damage is likely to be deemed a total loss.
Lacking this direction, however, every insurance company will play by its own rules.
How Insurers Determine the Worth of Your Car
In figuring the monetary value of your vehicle, the insurance company will consider its:
– Condition of the body and interior.
– Any parts, equipment and improvements that you’ve added on your own.
While considering the elements listed above, the insurer will also compare your vehicle to similar cars of the same make and model currently selling in your area to arrive at your car’s actual cash value.
You have the right to challenge this determination. If you have your doubts, don’t be afraid to ask the insurance adjuster for more information concerning the supposedly comparable vehicles on which he is basing his decision. If you can find a better match to your own car on the market at a higher price, be sure to bring it to his attention.
Do I Still Have to Make Payments on a Totaled Car?
If the insurance company has totaled your car, you can expect the amount of your settlement check to equal your car’s actual cash value less the size of your comprehensive or collision deductible. If you are financing or leasing your vehicle, these two coverages are mandatory. When the insurance company has totaled a financed car, it will normally pay the lender first, after which any money that remains on the claim will go to you.
Unfortunately, if your accident involved a financed car, you may be dismayed to find that the amount of the settlement check falls short of what you still owe on the vehicle. In a case like this, you may have lost the car, but you haven’t lost the debt. It’s still your responsibility, and this is where gap insurance can come to your rescue if you’ve had the forethought to purchase it beforehand.
Regardless of what your insurer is offering for your totaled car, you don’t have to take it lying down. You can challenge their decision. For more information concerning your rights in cases of this nature, contact Lloyd Baker Powerhouse Injury Attorneys today.