What is a “Total Loss” in a motor vehicle accident?
If you were involved in an accident, your car might be so damaged that it cannot be repaired for a reasonable cost. It might also be so damaged that it cannot be made safe for use again. If the insurance company thinks that repairs would be either too expensive, or the car would be too unsafe, they will write off your car and “total” it instead of fix it
What Does Insurance Have To Pay For?
Having your car, truck, or motorcycle totaled is a kick in the gut, but if your policy covers the loss, the insurance carrier will pay the actual cash value of the vehicle (and fees and taxes) minus your deductible. The insurance carrier then generally takes ownership of your vehicle, however, it may allow you to keep your vehicle in exchange for the salvage value.
How Much Is My Vehicle Worth?
The insurance carrier is only obligated to pay the fair market value of your car. It doesn’t matter if it was your grandma’s ’55 Chevy, or the best Harley you’ve ever seen, they only have to pay you what the market says it’s worth. The fair market value is the value of your car based on a comparison of sale prices of similar vehicles in your local area. The adjuster will look at Kelly Blue Book, Craigslist, newspaper ads, etc. The Carrier is generally fair in paying for your vehicle, but they are also in the business of paying as little as possible so make sure they compare apples to apples.
But I Don’t Want To Lose My Car.
If you want to keep your totaled car, you can. The insurance company will give you the option of accepting a little less money (salvage value) for the value of the car in exchange for keeping the car.
Do I Get All The Money?
Who gets the money depends on whether you own, lease or finance the vehicle. If you own the vehicle, you will be the person paid. On the other hand, if you lease, the leasing company gets the money. And on yet another hand, if you are still paying off the vehicle, then the financing company gets paid. If the vehicle is worth more than you owe, you will get the excess money. But if you owe more than it’s worth, you will owe that difference.
My Car’s Totaled, How Do I Get Around?
If you have rental coverage in your policy, then ask your insurance company to pay for a rental vehicle after your accident. Although, they are not obligated to rent you an identical vehicle, there are exceptions, so always ask. Unfortunately, you cannot rent forever, so ask your insurance adjuster for as much time as possible after your car is paid off, so you can get a new car.