Things to Do After a Total-Loss Auto Accident

Jan 24, 2024 By Susan Kelly

The good news is that you made it through the vehicle crash unscathed. Your car has been declared a "total loss" by your insurance carrier. A definition, please. After this, what will happen?

You have the right to challenge the insurance company's assessment of your vehicle's value if you don't agree with it. If you total a financed vehicle and still owe more on the loan than the vehicle is worth, gap insurance will pay the difference. If a car is totaled, at what point does it lose all of its value? If the cost of repairs exceeds the car's "actual cash value," the insurance company will classify the car as a "total loss" (ACV).

A car's actual cash value (ACV) is its market worth at the time of the accident, not its purchase price. It is a shock to many when they learn how quickly and how much a car's ACV can decrease (depreciates). The value immediately begins to drop when a customer drives off in a fresh new car.

Resource Like Kelley Blue Book

A resource like Kelley Blue Book can help you determine your car's true market worth by comparing it to others of the same year, manufacture, condition, and recently sold features in your region.

So, for illustration purposes, let's pretend that the 60% total loss criterion has been established by legislation in your state. Your Honda Civic, worth about $4,800, becomes totaled in the accident. In most cases, an insurance company will declare a vehicle totaled if the estimated cost of repairs is $2,880 or above. The insurer will usually approve repairs if your technician can do it for cheaper.

If your automobile is deemed a total loss, your insurance company will likely pay you (or your lender if you still owe money on the car) the ACV and then take possession of the vehicle.

What to Do If Your Car Is Wrecked

Getting an insurance payout for a totaled vehicle is usually more difficult than fixing the automobile. When filing an insurance claim, it helps to know what steps to take and what options you have so that you may move forward as quickly as possible while still achieving the best potential conclusion.

What to Do Immediately Following a Total Car Loss Most incidents that result in a total loss are usually rather severe. After an accident, prioritizing your physical health and well-being should be your top priority. After the first shock of the disaster has worn off, you must:

The quicker you submit your insurance claim, the better. It is important to notify your insurance company and the insurance company of any other parties involved in the accident as soon as possible if a total loss claim is to be filed. In the case of a car collision, for instance, you should notify both your and the other driver's insurance company.

Garage That Meets Our Standards

Has it been towed to a garage that meets our standards? You can take your vehicle to whatever repair shop you like, but it will speed up the claims process if you take it to one the insurance adjuster has pre-approved. The repair facility's estimate of costs will be sent to your insurance adjuster, who will then decide whether or not to total the vehicle.

Gather your necessary documentation. The insurance firm will need the vehicle's title. You could get a replacement copy from your state's DMV if you lost yours. If your car is a total loss, your insurance company will likely need you to sign over the title. Find out the actual cash value of your car.

Do your investigation on the car's ACV before accepting a settlement offer from your insurer in case of a total loss. Learn the going rate for cars similar to yours by researching them on automotive websites, newspapers, and local car lots and using online resources like Kelley Blue Book.

What if my car was totaled?

In most cases, you will be allowed to keep your totaled vehicle, but the insurance company will reduce the "salvage" or "junk" value (what they could get if they sold the vehicle for components) from the actual cash worth. You will receive a reduced settlement amount, but you can keep your car.

It's important to weigh the costs and benefits of keeping a wrecked car. To get your automobile back on the road, you'll need to get it fixed, inspected, and re-insured.

Donating a totaled vehicle to charity might give the donor a tax break. To find out if the organization you support uses a car donation service or auction house, you can inquire with them directly. Several states maintain databases of charities accepting vehicles as tax-deductible donations in exchange for their recycling services.

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