When the Insurance Company Determines Your Car Is a Total Loss The insurance adjuster gets to work to determine the amount of damage to your car and the repairs needed to make it driveable. Once the adjuster determines whether a car is totaled, the work begins to determine the payout.
If you have collision and comprehensive coverage options on your auto policy, then your total loss is paid out at ACV minus your deductible. Do your research, and keep in mind that extra options like a moonroof can increase its value. You are responsible for the shortfall, but if you have gap insurance with your auto policy, this is where it kicks in.
Gap insurance bridges the difference between what you owe and the amount of the payout from the insurance carrier. Some drivers may want the salvaged parts, while others may simply want to keep their car, even though it is not drivable. Either way, the answer is yes, although you should proceed with caution if you choose this option. However, this may not be the case for everyone. If you want to keep your vehicle after a total loss is declared, first confirm the following:.
Follow these practical steps to help you stay focused on getting back on the road safely, and perhaps with a new vehicle. The sooner you file your claim, the better. The damage to your vehicle could be greater than you realize, and the insurance carrier should be involved from the beginning of the claim. Once you do that, then the shop can start on the estimate.
The more knowledgeable you are on this subject, the better you are able to negotiate with the insurance carrier for your payout. If you're involved in a car accident, there are a few basic steps to follow before and after your vehicle is considered totaled:.
To determine your car's worth the "actual cash value" in insurance terms at the time of the accident, insurers typically use a number of factors to figure your car's actual cash value, including its age, condition, mileage and resale value, in addition to the selling price of similar vehicles in your area.. If you're financing a car that's been totaled, your insurance company will likely make the claim check payable to both you and your lender, which means you'll have to come to an agreement with your lender on how to release that money, the Insurance Information Institute III says.
Typically, the lender will be reimbursed first, with any remaining money then being paid to you. It's possible that you may still owe your lender more for the car than the insurance payment you receive.
In that case, you are responsible for paying the remaining balance on the car lease or loan. Adding loan or lease gap coverage to your car insurance policy is one way to help protect against paying a lender out of pocket for a totaled vehicle.
Depending on your insurer, this optional coverage may be available as part of a package or as a standalone coverage. It may also be available only for brand-new cars. In some cases, a totaled car may not be anyone's fault. Suppose, for instance, that a tree topples onto your parked car and your insurer declares it's totaled. If you have comprehensive coverage on your car insurance policy, it will likely reimburse you for the actual cash value of your vehicle again, minus your deductible.
If your car is totaled in an accident that is caused by another driver, your collision coverage may first come into play. However, your insurer may seek repayment from the other driver's insurer to cover the loss. In some cases, that may mean you are also reimbursed for the deductible that was subtracted from your insurance payout. If your vehicle's airbags deploy in a car accident, that does not necessarily mean your car is a total loss. The insurer owes you the actual cash value of your totaled car.
If you and the insurer can't agree on the method to come up with the retail market value, the insurer must follow the total loss rules outlined in state regulations leg. These rules allow the insurer to choose one or more of the following methods to determine the value of your car:. If your insurer can't find comparable cars in the area where you normally park your car, it may expand the search in mile increments until it finds two or more comparable cars.
With your permission, your insurer may extend the search beyond miles. The insurer must add to the actual cash value any applicable taxes, license fees and other fees required to transfer ownership.
If you and your insurer can't agree on your car's value, you may have the right to hire an appraiser if your auto policy includes an appraisal provision.
Keep in mind, new car owners may be most susceptible to the situation above. Newer vehicles typically depreciate as soon as you drive the vehicle home from the dealership.
Call us at and a claims representative will walk you through the claim process. You can also file a claim by logging into your policy or using the Progressive app. Before financing a new car after a total loss, check if you owe a balance on your totaled vehicle. In those instances, your lender might be able to consolidate what you owe into a new car loan.
Progressive offers a car shopping service to help with your new vehicle purchase. Please note: The above is meant as general information to help you understand the different aspects of insurance. This information is not an insurance policy, does not refer to any specific insurance policy, and does not modify any provisions, limitations, or exclusions expressly stated in any insurance policy.
Coverages and other features vary between insurers, vary by state, and are not available in all states. Whether an accident or other loss is covered is subject to the terms and conditions of the actual insurance policy or policies involved in the claim. We are not responsible for the content of any third-party sites linked from this page. No account? View your claim here. Progressive resources. Find answers to your insurance questions, insights into current trends, and tools for navigating life in our resource center.
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