If your car is in dire need of repair and the cost rivals or exceeds, the amount you paid for it, it’s considered a loss in the eyes of your insurance company. This is commonly referred to as being totaled. For new drivers, this may seem a bit confusing. Having your vehicle totaled is something that no driver wants to deal with.

Read on to learn more about what happens when your vehicle is totaled.

Reasons Why Your Car is Totaled

Before getting into the process of what happens, let’s go into what can cause a vehicle to get totaled in the first place. There are three reasons as to why a car is totaled; the cost for repairs is higher than the price of the car, it is too dangerous to repair it or it is considered a loss by the law. Even if the damage to the car isn’t too severe, the cost of repair may end up costing more than expected.

The Next Step

After your vehicle has been declared to be totaled by your insurance company, the next step is figuring out the payout. Even if the car is a loss, you may still be able to get a few dollars back. However, the amount you receive depends on both the state and your insurer. Furthermore, your payout is also determined by how bad the damage to your car is and how expensive the repairs are.

Here is a list of other factors that are taken into consideration:

Who caused the damages?

Car damages don’t occur for no reason. They mostly happen from the car being involved in an accident. Your insurance company will ask who caused the accident. Are you at fault or is it the fault of the other driver? Regardless, the insurer will offer you a deal. Always double-check the insurer’s math to make sure you’re not getting cheated out of what you rightfully deserve.

Do you have insurance?

If you are responsible for the accident, you must have insurance, specifically collision. Unfortunately, the legal minimum insurance requirements do not include this form of coverage. Collision makes sure that you are covered if you were the cause of the accident. Without this insurance, you will have to pay for the repairs yourself.

Did you pay off your car?

Having your car totaled is bad enough, but when it’s totaled without you having full ownership, then you’re going to have a hard time. This is because every insurance company pays for the vehicle’s market value.

If you had bought a car for, let’s say, $30,000 through a loan. And sometime later, it’s resale value is $20,000, but you still have to pay on the loan. Your insurance company will cut you a check for the resale value, but you still owe the lender the amount that’s owed. If this happens to you, make sure you have gap insurance. It will cover what you owe.

What Happens if You Don’t Agree with Your Insurer?

If you don’t happen to agree with your insurer, don’t worry. There’s almost always going to be a disagreement before both you and policyholders see eye-to-eye.

If you happen to disagree with your insurer, here’s what you need to do:

Do Not Settle for Less

The offer that you are given isn’t always set in stone. You can negotiate for a better one if the first offer doesn’t appeal to you.

Acquire an Estimate

You never know how much the cost of repairs will be. So, you’ll need to have your insurer give you an estimate. Similar to the payout, check their math so you don’t end up paying more than you have to.

Enlist the Services of an Appraiser

Sometimes, your insurance company may either be too difficult to negotiate with or they simply way off on their calculations. If this is the case, you can always go to an appraiser to set things straight. But, keep in mind that this is often the last resort and they are not free.

If you still have questions of whether you can consider your car totaled, enlist the help of Sandifer Insurance Agency. We will be happy to provide further information and assistance.

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