{"id":714,"date":"2022-12-26T19:43:00","date_gmt":"2022-12-26T19:43:00","guid":{"rendered":"https:\/\/www.freeway.com\/knowledge-center\/?p=714"},"modified":"2023-09-21T02:46:38","modified_gmt":"2023-09-21T02:46:38","slug":"is-your-car-a-total-loss","status":"publish","type":"post","link":"https:\/\/www.freeway.com\/knowledge-center\/auto\/auto-insurance-claims\/is-your-car-a-total-loss\/","title":{"rendered":"Is Your Car a \u201cTotal Loss\u201d?"},"content":{"rendered":"
It can be frustrating to hear that your car is a total loss for many sentimental and personal reasons, as well as financial ones. So, what do you do when you have a totaled car? <\/span><\/p>\n Though total loss accidents can be very stressful, the most important thing in the aftermath of every accident is making sure that you\u2019re okay. Then, you can work with your insurance agent to determine your vehicle\u2019s salvage value and next steps. <\/span><\/p>\n Although it can be discouraging news, if you\u2019ve gotten into a car accident and your <\/span>auto insurance<\/span><\/a> company tells you you have a totaled vehicle, there is always a good reason. <\/span><\/p>\n The damaged car can\u2019t be guaranteed safe for repairs. Despite replacing external and internal parts affected by the incident, there might be further issues with the vehicle that would make it unsafe to operate even with the parts repaired. Sometimes, the damage is too severe to safely repair the vehicle even if it\u2019s newer and valuable with the accident situation removed. Your health and safety come first so if your car is deemed to be past the total loss threshold, it\u2019s better to accept the news than fight it. <\/span><\/p>\n This news can be more difficult. If the required repairs exceed a certain percentage of the car\u2019s actual cash value, it might not be worth it to proceed with repairs. Normal wear and tear on vehicles will lead to annual or bi-annual repairs. As your car depreciates in value, it\u2019s important to consider whether you\u2019re pouring money into a car that isn\u2019t going to be functional in the next few years. <\/span><\/p>\n By certain state regulations, severely damaged vehicles must be declared a total loss. At this point, it\u2019s out of your control. Many mechanics are under the jurisdiction of the Department of Motor Vehicles (DMV) in their respective state. If a vehicle cannot be repaired your local state law will make the final call, not you. <\/span><\/p>\n The actual cash value vs what your insurer will likely pay you is calculated against your deductible. For example, if your Dodge Neon is worth only $2,000 and your deductible is $450, you won\u2019t be receiving the full $2,000 compensation for your vehicle\u2019s actual value. If you\u2019re curious about the fair market value of your motor vehicle or need to have an estimate for yourself, looking at similar cars in the <\/span>Kelley Blue Book<\/span><\/a> can help approximate what you might expect. However, the number it returns is not a guarantee and is more of a range. <\/span><\/p>\n The point of a total loss insurance claim is to provide you, the owner, with the <\/span>cost of replacing your current vehicle<\/span><\/a>. Your car\u2019s ACV is approximated by your own insurance company by comparing other vehicles of the same make and model, and also the condition of the car before the auto accident. <\/span><\/p>\n If you believe that the amount you\u2019re quoted for the value of your car is too low, you can dispute the settlement amount and try to negotiate a fairer price. However, be warned that this may delay the payout of the settlement and may incur other costs, such as arbitration or legal representation.<\/span><\/p>\n Once your insurance company generates that estimate, the funds will either go directly to you, if you own the vehicle, or to the leasing or finance company (listed on your policy or title). If the funds exceed that amount that is owed to those companies, then the remaining balance refunds to you, however, if you still owe money on the car even after the total loss funds post to the account, then you will be responsible for the difference.<\/span><\/p>\n In terms of the actual steps, once you receive a total loss decision from your car insurance company, you\u2019ll need to take some additional steps before car shopping. <\/span><\/p>\n First, you\u2019ll need to collect any <\/span>personal items<\/span><\/a> from the vehicle. Be sure to look thoroughly through the glove compartment, center console, trunk, backseat pockets, and sun visors. You never know if there is a receipt, photo, or other valuables stashed away. Next, you\u2019ll want to remove license plates. This is yours to keep. If you are planning to use it for your new vehicle this is especially important because you don\u2019t want to have to purchase a new one. <\/span><\/p>\n Once you\u2019ve thoroughly checked the vehicle and removed the plate, you\u2019ll need to leave your keys with your insurance representative. Make sure you\u2019ve contacted the leasing or financing company if you do not own the vehicle. These individuals should have your contact information should they be missing any pertinent information. You should also verify that the damaged vehicle is removed from your policy after it is no longer in your possession. <\/span><\/p>\n These events can mean a lot of paperwork and frustration, but making a checklist will keep you from having to backtrack. There will likely be a settlement, claim, title transfer, and financial implications. <\/span><\/p>\n If you\u2019d like to keep your car, then you may be able to negotiate that with your insurance company, depending on state regulations. However, out of your payoff from the total loss settlement, the fees for Salvage Title and your premium fee may be deducted.<\/span><\/p>\n Even if your car is declared a total loss the situation doesn\u2019t have to be a complete loss. Make sure that you are following up with your insurance company and providing them all the documentation that they need to deliver a smooth and quick total loss settlement fee.<\/span><\/p>\n One type of gap insurance coverage that you should consider carrying is total loss car insurance. This means that you\u2019ll be presented with some help covering the cost of purchasing a new vehicle should yours be deemed unsafe to repair or a total loss. <\/span><\/p>\n The first type you should carry is <\/span>collision coverage<\/span><\/a>. This will help you cover the cost of repairs or in this case, a replacement in the event of an accident. Accidents can be from a moving collision or when someone <\/span>hits your parked car<\/span><\/a>. <\/span><\/p>\n The second type of coverage you should carry is <\/span>comprehensive coverage<\/span><\/a>. This helps protect you against total losses that aren\u2019t related to an accident. Comprehensive coverage claims are made when your car is severely damaged in a hurricane, tornado, flood, fire, or other catastrophic event that is out of your control. While it\u2019s impossible to prevent such happenings, it\u2019s important that you carry the coverage should you live in an area prone to severe weather events or wildfires. <\/span><\/p>\n You\u2019ll need transportation between the accident and getting a new vehicle. Some auto insurance policies will <\/span>cover a rental<\/span><\/a>. Verify with your insurance adjuster if this is part of your policy. It can save you a lot of time, money, and frustration when you\u2019re car-less. <\/span><\/p>\nWhy is My Vehicle A Total Loss?<\/span><\/h2>\n
How is the Value of My Vehicle Calculated?<\/span><\/h2>\n
What Do Mechanics Factor In?<\/span><\/h2>\n
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Steps to Take After A Total Loss Decision<\/span><\/h2>\n
Important Paperwork to Handle<\/span><\/h2>\n
Insurance Coverages for Total Loss Situations<\/span><\/h2>\n