Your Car Is Totaled, Now What?
Your Car Is Totaled, Now What?
Any traffic accident is unnerving. But when your car is totaled, the situation is even more stressful. A better understanding of the way your auto insurance company deals with this situation can alleviate much of the added stress. And that’s great news at a time like this.
Making the determination
You may take one look at your car and declare it a total loss. But your auto insurance agent has other criteria, including:
- Whether or not your car can be safely repaired.
- Whether or not the cost of repairs exceed the car’s current value.
- Whether or not the damage fits the state’s criteria for being considered totaled.
Determining Actual Cash Value
Auto insurance adjusters gather information about your car’s condition prior to the accident including mileage, condition on the outside, the inside, and tires, plus modifications you’ve made. If you have receipts for modifications, give them to the adjuster. To estimate total loss, the adjuster performs an analysis of comparable cars that have sold recently in your area and based on that determines the car’s Actual Cash Value.
If you disagree, explain why you feel the determined value is too low. You can request details on the cars used in the analysis plus provide your own research using cars you feel more closely match your car.
Is a new car in my future?
Only if you purchased Guaranteed Replacement Cost coverage for a newer car. With this coverage, you’ll likely be paid enough money to purchase new. Without it, you’ll be paid the equivalent of the car’s Actual Cash Value minus your collision deductible. The settlement amount should be sufficient to purchase a comparable car.
Who gets the settlement check?
That depends on who holds the car’s title. The leasing company gets the check if the car is leased. The finance company gets the payoff amount and you get what’s left over if it’s financed. And you get the check if you own the car. Ask the adjuster when the check will be issued and if you have rental coverage, how long you’re entitled to the rental car.
But I want to keep my car and repair it myself
State law varies on whether or not you can retain ownership and make repairs once the car is deemed totaled. The best advice is to ask your auto insurance company about your options under this scenario.