Car insurance covers you financially whether you need repairs or your vehicle is totaled. The first few weeks following an accident can be stressful. You may be dealing with car problems, possible injuries, or financial needs that result from the accident or being unable to drive.
Being familiar with what formula car insurance companies use to determine if your vehicle is totaled will help you be prepared for their determination after your accident.
Read on to learn what the auto insurance formula for a totaled car really means and then make sure that you enter your ZIP code above for a FREE car insurance rate comparison!
What Does Totaled Actually Mean?
You often hear people say that a car is totaled after an accident. The word “totaled” is used for many things, but isn‘t always used in the right way. When it comes to your vehicle it simply means that the cost of repairing the vehicle supersedes the cost of replacing it. Sometimes it simply isn’t worth it to repair a vehicle.
Repairing a car that should have been totaled can drastically reduce its overall value.
Determining if a car is totaled cannot be done by only looking on the outside of the vehicle. A car may look damaged on the outside while the engine is fine. On the other hand, a car can also look only slightly damaged on outside but have extensive engine damage. Both the car’s engine and its body are taken into consideration when determining if a car is totaled. However, the engine damage is a bigger factor in the determination because it has a higher repair cost.
Making the determination doesn’t have to be up to the insurance company alone. Your company may make you feel like it is up to them who should evaluate your vehicle. However, you can use a mechanic that is contracted to work with your insurance agency or you can choose your own mechanic. You have the right to make the choice.
Either way, an insurance adjuster will come out to assess the damage and to look over the report from the mechanic. If you have a mechanic that you are comfortable with or you have used in the past, you can go ahead and use that mechanic. If you don’t agree with the assessment from the mechanic and/or the adjuster, you can ask for another professional to look at your vehicle. You must be diligent to make sure you get the most for your vehicle.
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What is the Formula Used to Determine if a Car is Totaled?
The first step in the formula is determining actual cash value. Actual cash value is how much your vehicle would have sold for at the time of the accident or damage. It is based on mileage, age, upkeep, damage, and how well its interior and exterior were kept. Often times the car insurance company will only use the blue book value of the vehicle because they don’t know other details about your vehicle.
The best thing you can do to be prepared is to keep records of any repair or work you have had done to your vehicle.
This includes simple things like oil changes and bigger things like a replaced transmission. This will help you prove what your car is actually worth. Without proof the actual cash value may be wrong but that is the amount your insurance company will go with. It is left up to you to prove otherwise.
After the actual cash value is determined, the total damage is determined. This will be done by a mechanic and an insurance adjuster. Each insurance company has their own cut off between repair and replacement but the generally accepted percentage is 70-75%. If it would cost 70-75% of the actual cash value of your vehicle to replace it, then it will be determined to be totaled.
Once your vehicle is determined to be totaled, your insurance company will provide you with a check for the actual cash value of your vehicle. You can use this money to purchase another vehicle or in a different way if you choose. As far as your totaled vehicle goes, you can sell it to a scrap metal yard or dispose of it according to your local community’s guidelines.
Find an Insurance Company You Can Trust
The most important aspect of making sure your totaled vehicle is paid for is going with a car insurance company that you can trust. To compare companies, rates, and quotes, you can use an online comparison tool. An online comparison tool is a fast, easy way to weigh your car insurance company options and to find a company that works for you.
Enter your ZIP code into the tool at the bottom of this page to start comparing FREE quotes online now!