If you own a car, you most likely know what it means if your car is considered a total loss even if you haven’t had it happen to your own vehicle. This happens when the cost to repair a car exceeds the value of the vehicle. Depending on the laws in your state, the specific numbers can vary, so it’s a good idea to verify what the specific numbers are for your state for your vehicle to be considered totaled.
In some instances, the insurer decides whether or not your vehicle is considered a total loss. Depending on what type of coverage you have, they should help to replace a vehicle in the event that it’s totaled. If you are leasing or financing your vehicle, you are usually required to have comprehensive or collision coverage which is used in the event that your vehicle is totaled to cover the cost of replacing it. If you don’t have comprehensive or collision coverage, and your car is totaled, you most likely will need to cover the costs out of pocket.
If you happen to be in an accident and your car is totaled, there’s a few things you should do both before and after the car is totaled. The first thing you should do is contact your insurance provider to file a claim. After an estimate is completed on your car, they will determine if the car is considered totaled and issue payment for the cash value of the vehicle minus your deductible.
If you are in an accident that is at the fault of someone else, and your car is totaled, your collision coverage should come into play. In most cases, your insurance company will deal with the at fault party’s insurance company to recover the loss.
In the case that your car is totaled and it’s not the fault of a person but an object, your comprehensive coverage will kick in and usually reimburse you for the value, minus your deductible.
Who Decides My Car’s Value?
In order to find out your car’s value at the time of the accident, your insurance provider will usually use a few different factors to determine the actual cash value of your car. Some of these factors include: mileage, condition, resale value, and the current prices of similar cars being sold in your area.
What Happens To The Loan?
If you are financing a car and it is considered a total loss, your insurance company will pay out the actual cash value to you and your lender. This means that you and your lender will have to figure out how the money is going to be released, but usually the lender is paid and you will receive any funds that are leftover. If you are purchasing a new car, you might want to look into gap coverage but you might be able to add it to a car you are leasing or as standalone coverage.
We’re Here For You
We want you to be in the best hands for all your insurance needs so whether you just need a quote, or questions about our claims process, reach out today. We’re here to help you in any way we can at Willoughby Insurance in Buffalo, NY.