Last Updated on May 17, 2021
The worst thing drivers fear to hear from the insurer is having their vehicle considered totaled after an accident. The vehicle is considered totaled when the cost of repair exceeds its value. In the US, you will find some states interpret totaled vehicles using specific thresholds.
If you were in an accident, the first thing as you proceed with your body checkup is to make sure you notify Naqvi Injury Law to help represent you through the right legal way to claim an insurer in case of any injury. The most important type of insurance you need for your car insurance policy is collision plus comprehensive coverage.
Here are a couple of things you need to know to help your dream of having your car getting back on the road.
What Happens After Insurance Totals a Car?
It is not easy to maneuver the insurance processes after experiencing an accident where your vehicle is considered totaled. Here are the steps that follow when insurance breaks the news to you.
- The first process is your claim adjuster requiring you to hand over your car keys and asks you to get your personal items out.
- The next step is to contact your leasing or finance company to notify your insurance that they will contact them.
- After your vehicle is considered totaled, the insurance is supposed to pay you settlement money, which is in the form of a check with the exact amount that is the cash value of your vehicle.
In case the car you had an accident is from a leasing company, the settlement money is sent directly to the leasing company. However, if in one way or another, you financed the vehicle, the finance company or bank will be sent the money for what you still owe and the balance given to you.
What Happens to the Totaled Vehicle?
Generally, after the final decision is given that your vehicle is totaled, the insurance company takes your car ownership and transfers it to their name. Later, they dispose of the car by selling it to salvage buyers, but in case you decide to keep it, the insurance will have to deduct the salvage value from your settlement amount.
Some states handle the process differently and have specific guidelines concerning the owner retained total losses. Therefore, you must check your vehicle claims with your adjuster to understand how the process entails entirely.
What happens if you are Still Paying Loans?
If your vehicle has been totaled and had a loan you were still paying, the insurance company will have to cut your vehicle’s actual amount of value. The insurance will pay your lender, and if there is a balance, it will be given to you. So, your lender is reimbursed for the actual car amount in case it is totaled to cater for your loan.
What happens if the Total Loss was not your Fault?
In circumstances where the vehicle loss was not your fault and maybe the accident happened at the parking by the tree, and your car was declared totaled, you will be paid the actual amount of the car. Remember, this will only happen if you have comprehensive coverage and also deductible are cut when reimbursement is made.