Totaled Car: Everything You Need to Know – Kelley Blue Book

Accidents happen. A driver is belated to pick up their daughter from daycare, runs a arrest sign, and crashes into your car. A storm sweeps through town, uprooting the tree in your battlefront yard, which lands on acme of your car. then boom, your vehicle is totaled .
If you have car insurance, you ’ d credibly expect your insurance company to cover the damage. fortunately, they will if the repairs cost less than what the car is worth. But if they will cost more to repair than what it ’ randomness worth, the insurance company will declare the fomite a entire loss. The company will then reimburse you for the actual cash value of the car — not the entire price of the repairs .
here ’ s how it works.

What is a Totaled Car?

policy companies “ total ” a car when the cost to repair the damage exceeds the vehicle ’ south marketplace value. They may besides declare it a full loss if it would be dangerous to drive even if you fix it. If the insurance company totals your cable car, they will pay you the vehicle ’ s actual cash value ( ACV ). The actual cash value is how much it was worth equitable before the loss. It includes a reduction in value for depreciation, so the ACV will be less than what you paid for the fomite, even if it ’ s relatively newly .

When is a Car Considered Totaled?

It depends on the indemnity company and where you live. Each state sets the doorsill for declaring vehicles a sum loss — but carriers may choose to use a lower doorway. In many cases, the indemnity company will total a car tied if the repair costs are less than the fomite ’ s actual cash value — sometimes a distribute less. That ’ south because it can be difficult to determine the full extent of the wrong before repairs begin .
For example, in Arizona, the state doorsill for totaling a cable car is 70 % of its ACV. Let ’ s say you have a vehicle that ’ s worth $ 10,000. Under department of state law, the insurance company must declare it a sum loss if the price of the damage is $ 7,000 or more. But if the insurance company ’ sulfur threshold is 60 % of the ACV, it will be totaled when repair costs are $ 6,000 or more .
“ The rationality that some carriers [ use a lower doorway ] is because when you ’ re adjusting a fomite, and you ’ ra looking at it after a personnel casualty, it ’ s hush in concert. And all you can see, for the most depart, is the exterior of the vehicle and the undercarriage. When the body patronize takes the vehicle apart and pulls the panels back, they typically find more damage, ” said Josh Damico, frailty president of indemnity operations at Jerry, a cable car policy comparison service .
If the soundbox shop finds more damage after they begin the repairs, they file a addendum with the policy caller for the extra damage. “ Some carriers have an mind of what supplements are going to look like on a damaged vehicle. They consider this upfront when determining when they will declare a vehicle a total loss, ” he said .

What Insurance Covers a Totaled Car?

The type of insurance coverage that kicks in if your cable car is totaled depends on the circumstances of the loss. here are four kinds that might cover a full loss .

  • Collision: Kicks in if you’re in a crash with another car or immovable object, such as a fence or lamppost. Read our story on collision insurance.
  • Comprehensive: Covers non-crash-related damage caused by many different things, including severe weather, vandalism, theft, animals, and more.
  • Property damage liability: If you’re in an accident and another driver is at-fault, their property damage liability coverage should pay for the damage to your vehicle — if they’re insured.
  • Uninsured/underinsured motorist: Your uninsured/underinsured motorist property damage liability should cover you if you’re in an accident where the at-fault driver is not insured. If you don ’ t have this type of coverage but have a collision, it will pay for the repairs .

If you have a loanword or lease, the lender will credibly require you to maintain collision and comprehensive. otherwise, these coverages are optional in every state .
You could skip them, but if you only have liability coverage to meet your state ’ sulfur minimal insurance requirements, you ’ rhenium putting yourself at risk. Liability coverage only pays for injuries and damage you cause to person else. It won ’ thyroxine embrace repairs to your vehicle if you ’ re at mistake in an accident or have non-crash-related damage .
If you are looking for extra coverage, you can learn more about the most common types of car indemnity .

How GAP Insurance Can Help

Gap Insurance: What is is and why you need it.

If you have a loanword or rent, you still have to pay your lender even if your car is totaled and you can nobelium longer drive it. however, the policy company will merely pay the actual cash value of the car at the time of the loss. Since vehicles depreciate promptly, that may not be enough to pay off what you owe if you ’ rhenium lease or financing the buy of your cable car — particularly if you put little or no money down .
You ’ ll be creditworthy for making up the dispute unless you have GAP coverage. GAP covers the difference between the amount you owe on your loan or lease and what the indemnity company pays. many policies even cover your collision or comprehensive examination deductible .

How Does the Insurance Company Determine a Car is a Total Loss?

To determine whether a car is a total passing, the insurance company must calculate the vehicle ’ s actual cash value immediately before the loss occurred and estimate the come of damage. Most insurers work with a third-party seller that aggregates fomite data to determine the ACV. The policy company will then send an adjuster to inspect the damage and estimate the repair costs .
If the damage exceeds the brink set by the state or insurance caller for totaling a cable car, the insurance company will declare it a entire loss. If this happens, the carrier will reimburse you for the actual cash rate of the vehicle .
even if you get into a cable car crash and your vehicle is not completely totaled, your indemnity company may however pay for your repairs .

Can I Keep My Totaled Vehicle?

You might be able to keep a totaled vehicle, but it depends on your state ’ sulfur laws. “ The best way to start this process is to talk to your carrier about purchasing the totaled vehicle back, ” Damico said. If you can buy back the car, you ’ ll indigence to contact your local DMV to find out what forms you need to complete and the steps to take to start the buy .
If you ’ rhenium allowed to keep the car, you won ’ thyroxine be able to drive it right away. “ once a car is deemed a sum personnel casualty, it has to be repaired, pass inspection, and ultimately you ’ ll be given a rebuild or a salvage title for the vehicle, ” Damico said. You ’ ll need to provide the style and proof of inspection to the DMV to register the car so you can drive it on the road .
And don ’ metric ton forget about policy. You can ’ t legally drive without it in most states. however, you may be limited in the types of coverage the insurance company is volition to sell you. “ Some policy companies only insure salvaged, or rebuilt-titled vehicles for liability only. They wouldn ’ thyroxine overlay it for comprehensive examination or collision coverage because it ’ sulfur difficult to assess the current stipulate of the fomite, ” Damico said .
If you don ’ t plan on driving your totaled vehicle, you may besides be able to :

  • Keep it and use it for parts on another car or sell the parts for extra cash.
  • Sell it to a junkyard or salvage yard.
  • Donate it to a local charity.

How Can I Total My Car Out?

You can ’ thymine. policy companies decide whether to total a fomite based on what it ’ randomness worth and the extent of the price. If the fomite ’ s animate cost exceeds a certain share of its actual cash prize, the insurance company will declare it a entire personnel casualty. If it doesn ’ t exceed the doorway, the insurance company won ’ t total it .

How Much Can You Expect from Insurance for a Totaled Car?

It depends on the fomite. When an policy ship’s company totals a car, it pays the fomite ’ s actual cash measure immediately before the loss occurred. The ACV factors in depreciation, which includes break and rip, mileage, and former accidents, so the reimbursement total will be less than what you paid for the cable car .
You can use the settlement money from the insurance company to help you buy a new fomite. however, it won ’ thymine be enough to cover a fresh version of the lapp car you ’ re presently driving unless your policy policy includes new car substitution coverage .
If you don ’ thyroxine think the policy caller ’ s payout is bonny, you can dispute it. But the insurance company international relations and security network ’ t equitable going to take your son for it that the car is worth more than their estimate. thus, you ’ ll want to do some research. You can check sources like Kelley Blue Book and gather information about what similar cars are selling for in your area. Present the information to the adjuster and see if you can come to an agreement.

“ If you can ’ metric ton resolve it with the adjuster, you can go out and hire a secret appraiser, ” Damico said. But you ’ ll have to pay for it out of pocket. If the appraiser ’ second estimate is higher than what the policy ship’s company offers, you can use it to negotiate. If not, you may have to accept the insurance company ’ randomness offer .

Steps to Take When Your Car is Totaled

If your cable car is totaled, there are a few steps to take to settle your call and get back on the road .

  • File a claim. Contact your insurer to file a claim just as you would if you were in a fender bender.
  • Assess the damage. The insurance company will send an adjuster to assess your vehicle’s damage. The adjuster will conduct a visual inspection to estimate the cost of repairs.
  • Know your car’s fair market value. The insurer will use the actual cash value of your car immediately before the damage to decide whether to declare your vehicle a total loss. You can get an estimate of your car’s fair market value from tools like Kelley Blue Book or by checking to see what similar cars are selling for in your area.
  • Contact your lender (if applicable). If you have a loan or lease, your vehicle is what is securing your financing. So, you need to let the financing company know about the damage — and you must continue making your payments. If you stop, it could negatively affect your credit, making it more challenging to get financing for a new vehicle. When the insurance company settles your claim, they’ll send payment to the lender or leasing company.
  • Negotiate the claim with the insurer. If you think the insurance company’s assessment of your car’s ACV is too low, you can negotiate the payout. But you’ll need to show why your car is worth more than what the insurer is offering.
  • Shop for a new car. The payout you receive from the carrier likely won’t be enough to buy a new version of your old car. But you can use it to make a down payment on a new vehicle.

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