Auto insurance is a necessity as well as a legal compliance for every vehicle owner. Automobile accidents have increased with more and more vehicles plying on roads. Newer and faster vehicles are added frequently in the market. To keep up with the pace auto insurance companies come up with innovative products and offers resulting in stiff competition among the providers and a wide choice for the consumers. Auto accidents sometimes result in totaling of the vehicle that means the vehicle is not roadworthy anymore. When you make a claim with your auto insurer, the auto insurance company will send an adjuster who will inspect the damaged vehicle and assess the loss. He will also estimate the cost of repairs to restore it to be able to drive it again. Sometimes the vehicle may have been damaged to such an extent that it cannot be repaired as the cost of repair exceeds the value of the vehicle itself and it is not worth it. In this situation the insurance company will declare your vehicle as ‘totaled’ and will pay cash equivalent to the actual value of your vehicle. Insurers have different methods of determining the Actual Cash Value of the totaled vehicles. The insurance companies usually offer the value at which they can buy a salvaged vehicle at an auction. You can also get a specialist who can value your total loss vehicle and get the documentation on how he arrived at the salvage value of the wrecked vehicle to support your claim.
In case of a total loss vehicle, if you are not satisfied with the compensation your insurance company offers, you can ask your insurance agent to get involved in the process, as he would be more than willing. Alternatively you can speak to the Consumer Affairs or complain to them about your case. To know your rights you can refer to the Fair Claim Practices Act of your state.
If you have bought the totaled vehicle on loan and the payments are still pending, then the insurance company will pay directly to the lien holder. Your lien holder generally may allow you to retain the totaled vehicle if your loan repayments are up to date. This payment will be the ACV of your vehicle less your deductible. The salvage cost may also be deducted if you choose to retain the total loss vehicle. You are still responsible for the payment of remaining balance on your loan on the vehicle. The salvaged vehicle title will be given to you and the DMV of you state will be notified about the totaled status before that.
If you have GAP insurance, you can claim the difference in the ACV and the payment still remaining to be paid on the vehicle loan.