What should I expect for a totaled car?

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Zaneta Wood, Ed.S. has over 15 years of experience in research and technical writing bringing a keen understanding of data analysis and information synthesis to reach a wide variety of audiences. She studied adult education and instructional technology at Appalachian State...

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Reviewed byJoel Ohman
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UPDATED: Nov 28, 2016

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Here's what you need to know...

  • When a car is unable to be driven after an accident, it is classified as totaled
  • Physical damage coverage is known as a collision or comprehensive policy
  • Being upside down on a car loan that means that you owe more on your vehicle than it is worth

Sometimes a car accident is so damaging that the car is totaled leading you to ask, what should I expect from car insurance for a totaled car?

According to the terms of your insurance policy, if you have physical damage coverage on your vehicle, your insurance company will write you a check for the actual cash value of your vehicle.

Physical damage coverage is known as a collision or comprehensive policy. The following article gives more information about how actual cash value is determined and what you can do if you owe more than your car is worth.

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What is “actual cash value”?


Actual cash value is the amount your vehicle is worth at the time of the accident. The insurance company will determine this value by looking up the average selling price of the make, model, and year of your vehicle.

Proving that your vehicle is worth more than the average vehicle of the same make and model is 100 percent on you. It is important to keep documentation of everything you have done to your vehicle since you have owned it.

This includes oil changes, tire replacement, and adding devices such as an alarm or a remote starter. All of these add value to your vehicle.

Mileage is also a very important aspect of determining the actual cash value of a vehicle. You must let the insurance company know how many miles were on your vehicle. One way to keep a good record of this is to keep the paperwork from oil changes since it always lists your mileage.

Submit this along with all the paperwork to prove to your insurance company that the actual cash value of your vehicle is more than the price your insurance company has said they will pay you.

When you receive the total replacement value amount from the insurance company, do not accept it or cash any checks unless you are satisfied with the amount. You have the right to dispute the amount and submit any paperwork to support your dispute.

Oftentimes, an insurance company will approve the lowest average amount first. Many people do not dispute the first amount because they don’t know they have the right to do so.

Actual cash value does not mean the amount that you owe on your vehicle or the amount that you can buy a new vehicle for. Actual cash value is only the amount you could sell your vehicle for.

When you receive your check from your insurance company, you can use the money however you want. It can be used to purchase another vehicle and some of the funds for something else.

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What can I do if I am upside down on my car loan?

Being upside down on a car loan that means that you owe more on your vehicle than it is worth. If this is the case, you should consider adding GAP insurance to your car insurance.

GAP insurance fills in the gap between the actual cash value of your vehicle and what you owe. GAP insurance can be added to most car insurance policies or purchased independently. It must be purchased before your car is totaled.

If you have GAP insurance, when your car is totaled you will receive the actual cash value plus the difference between that amount and the amount owed.

GAP insurance is an added expense, but if you are upside down on your loan, it is a smart move. The cost of GAP insurance varies. It is based on the amount of coverage you need and other factors concerning your vehicle.

An online comparison tool can help you get just the right car insurance and GAP insurance for your particular vehicle and driving situation.

Enter your zip code below and start comparing affordable car insurance quotes now!

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