When you are involved in a road accident and your car is badly damaged and no longer road-worthy, your insurance company may declare the car as “totaled”. To determine a vehicle as totaled, the auto insurance companies simply estimate the cost of repairing and if exceeds the value of the car they declare it as totaled. In most cases the auto insurance company will make cash settlement for your policy under normal circumstances
Evaluating the cost of car for Auto Insurance Claim
There are different ways in which auto insurance companies evaluate the vehicle’s worth. You should also make sure that depreciation of the vehicle is also taken into consideration when calculating the amount of settlement. If it is an old or cheap car, even minor damages may be sufficient to be declared totaled. It is also true that even major damages to a more expensive car might not total it. Normally the insurance company will decide if it is cheaper to repair your car or to replace it by a new car.
The amount you can expect to receive for a totaled car from your auto insurance company will depend on your auto insurance policy. Generally you can expect an amount equivalent to the cash value of the vehicle after deducting the deductible you have chosen on your policy. If you are the one at fault you should meet the deductible. If you are not at fault the insurance company will not deduct this.
Auto Insurance Coverage and Totalling of Car by Insurance
If you had purchased full coverage auto insurance, and your car is totaled, your auto insurance company will pay an amount that is required to buy a new car. If you have a collision and comprehensive coverage your insurance company will pay you the actual cash value of your car. If your car’s value is less than what you owe on your car loan amount you should go for GAP insurance. In this situation you will be responsible to pay the outstanding amount on the loan as laid out in your loan contract.
The auto insurance companies base the valuation of your car for replacement on the price of the car in the local used car market. When you are in doubt, you can ask the insurance company to give you their paperwork to see how they arrived at that figure. You can check to see if all the components and accessories are included and if not you can ask for it. This will result in a higher value.
For expensive vehicles, the auto insurance companies will follow various other evaluation processes. Their top priority is to determine the value of your car. Usually they will examine the blue book price, how long you have been using it and the number of miles the vehicle has run.
Keeping your car
If you would want to have your car in spite of the damage, the amount spent on salvaging it will be deducted by the insurance company. You may take back your car after some other factors are taken care of.