What is the insurance value of a totalled car
what is a wrecked car?
A wrecked car is a car that would cost more than it is worth to repair, or a car that cannot be repaired. For example, if a car is worth $10,000 and the repairs would cost $11,000, the insurance company would declare the car a total loss because the repairs cost more than the value of the car. the insurer can then reimburse the “actual cash value” of the vehicle, which is what the car was worth before it was damaged.
key things to know about totaled cars
- Insurance adjusters are the ones who determine if a car is totaled.
- totaled cars may be covered by comprehensive, collision, or property damage liability insurance, depending on the situation.
- If your totaled car has a loan or lease balance, your insurer will first reimburse your lender or lessor.
- You may have the option of keeping a wrecked car, but it’s unlikely to be worth it.
when does an insurance company consider a car to be totaled?
An insurance company will “total” a car when the repair cost is greater than the value of the car immediately before the damage occurred. An insurer may also declare a car a total loss if it cannot be repaired safely or repaired at all.
State law sometimes dictates the amount of damage needed to total a car, and this threshold can be as low as 50% of its value.
Learn more about when an insurance company totals a car.
what happens when your car is wrecked?
When your car is totaled, you file a claim under the appropriate coverage type to be reimbursed for the value of the car, less deductibles. The type of coverage you will use to file the claim depends on the situation in which the car was totaled.
coverage to use for a totaled car
Other coverage options that can help you if your car is totaled include gap insurance and new car replacement. gap insurance will help cover any remaining balance owed towards a leased or financed car that totals up. new car replacement will replace a totaled vehicle with a comparable new vehicle.
how much is the total car insurance payment?
An insurance company will pay the actual cash value (ACV) of a totaled car. ACV is how much a car was worth immediately before it was damaged, taking into account factors like age, make, model, and condition.
Once you and the insurer agree on a value, you will be paid that amount less any deductible. in some states, the payment will also include taxes and fees associated with the purchase of a replacement car.
Learn more about how much is a car payment in full.
what happens when your car is wrecked and you still owe money?
If you are leasing your car, the insurance company will pay the leasing company first. If you have an auto loan, your insurer will first pay off the loan before paying you. if your car is worth more than what you owe, the balance will be paid to you.
However, if you owe more than your car is worth, you still owe your lender the difference. A gap insurance policy, if you have one, can protect you from this risk. otherwise, you are obligated to pay the loan balance.
Learn more about what happens if you owe money on a wrecked car.
can you keep your car if it gets wrecked?
You can keep your car if it is wrecked and pay for the repairs yourself in most states. the insurer will deduct the salvage value of the car (what they would have gotten by selling your car to a junkyard) from what they pay you.
However, there can be a lot of red tape involved to get your car back on the road. Your car will likely be issued a “brand title,” “salvage title,” or “salvage certificate” until the repairs are completed and inspected. the total loss will also be part of the car’s vehicle history report, and totaled cars can be difficult to insure or sell later.
Learn more about when you can keep a totaled car.
what to do when your car is totaled
1. file an insurance claim
Total loss claims can take a long time to process, so you should contact your insurance company or the at-fault driver’s insurer as soon as possible.
2. tow the vehicle to an authorized body shop
You don’t have to take your car to a specific body shop, but using a mechanic that has already been approved by your insurer is the most efficient way to go. The body shop will give the insurance adjuster a full assessment of the car’s condition and the cost of the repairs. Based on that information, the adjuster will decide whether to declare the car a total loss.
3. gather your documents
You will need to provide the insurance company with your title and sales receipt for your car in order to be reimbursed for the value of your car. If you can’t find the title, you can request a copy from DMV. If your car is leased or financed, then the lender or lessor must provide the title.
4. investigate the value of your car
To ensure you get a fair refund, you should try to find out how much your car was worth before it was destroyed. The best way to do this is to research the value of similar vehicles in your area using online resources like Nada Guides and the Kelley Blue Book.
5. check the status of your loan
If your car is financed, you need to find out how much you owe on a lease or loan. Once you have an agreement with the insurance company, the insurer will use the money to pay off the remainder of your lease or loan. then she will receive any remaining amount.
6. start buying a new car
Once you know how much money you’re going to get from your insurance company, you can start looking for a new car. In several states, including California and Florida, insurers must pay sales tax on your new vehicle as part of the final settlement. just keep in mind that you usually have to request a refund within 30 days of buying the new car.
Also, remember that different cars can come with different insurance rates, so always shop around and compare quotes before making a decision.
video: totaled car guide
ask the experts
To learn more about the wrecked car, Wallethub posed the following questions to a panel of experts. Click on the experts below to see their biographies and responses.
1. Should drivers ever consider keeping a totaled car? 2. How can drivers get the most out of their insurance companies after their car is totaled? 3. What is the most important thing to do after your car is totaled? 4. When do you recommend getting additional insurance to protect against the possibility of a totaled car? 5. Can drivers save as much as insurance companies advertise by switching companies? 6. Why do auto insurance companies spend so much on commercials? 7. Should drivers trust their insurance company?