Vehicle Insurance

Total Loss and What It Means for Your Vehicle Insurance

Total Loss and What It Means for Your Vehicle InsuranceHave you ever been involved in an accident with an older vehicle; then you may be aware of the concept of Total Loss. If you have a new vehicle, then you might not experience total loss anytime soon. Nevertheless, if you are ever in a situation in which the incidence affects your car insurance, you need to be prepared.

What is Total Loss?

After experiencing a severe damage, a car may be considered a total loss. If the cost of repairing a vehicle is more expensive than the actual value of the car, it’s considered a total loss. The actual cash value of the vehicle refers to the cost of the car taking into consideration its age and natural wear and tear. Getting coverage for cars that are a Total Loss is different than a conventional vehicle insurance coverage.

When Is A Total Loss Car Covered?

To obtain coverage for a Total Loss car, you will need to have property damage liability, comprehensive or collision insurance. There is a good possibility you already have PD, as it’s mandatory in every state other than Virginia and New Hampshire. To file a claim via your PD, the other person would have had to be at fault after an accident for you to be given a payout. Conversely, if you file a claim on a Total Loss car with your collision insurance, it does not make a difference if you were the careless driver or not.

Is It A Total Loss Or Not?

Total Loss and What It Means for Your Vehicle InsuranceThe moment you file a claim, an adjuster will inspect your car, trying to find out the damages to the vehicle and estimated costs. At this point, your vehicle might be declared a Total Loss. Your state of residence determines whether or not the car is a Total Loss. Some states, such as Texas, Colorado, and New York, determine the damage by a Total Loss Threshold, where the damage is computed as a percentage of the vehicle’s actual cash value. Other states, including Pennsylvania and Georgia, use a Total Loss Formula; in this circumstance, if the amount of the repair costs and the estimated resale value is higher than the vehicle’s actual cash value.

What If Your Vehicle Is Declared A Total Loss?

After your vehicle is declared a Total Loss, your insurance provider will take your vehicle and alert the DMV that your vehicle has been totaled. If you would like, you may ask your insurance provider whether you can keep the car if it is a vintage car worth collecting or if you would like to sell the parts. However, you will receive less payment in this instance. According to Geico, not all states allow the vehicle owner to keep the towed automobile, so it is best to look into the steps you’d want to take to see if it is worth jumping through any hoops.

What If You Don’t Believe It Is A Total Loss?

If you are not in agreement with the decision of insurance adjuster on your car, you have the right to negotiate the vehicle’s worth. To do this, you’ll have to submit documentation supporting the notion that your vehicle is worth more than the adjuster is estimating. Especially, modifications you‘ve made to your car are the core grounds of a negotiation with an adjuster. After this conversation, if you still feel short-changed, you might want to take legal action. Nevertheless, paying for an attorney and going through this legal process is only worth it if you believe the adjuster’s estimation is much lower than what you believe it ought to be.

If your car is declared a Total Loss, don’t freak out. Though this process involves some extra steps than filing a claim on most types of cars, it’s vital if you want to obtain cash in the sum of your ACV. As a client of your insurance provider, you have the right to push back on your insurance provider’s estimates, within reason. If you feel that your provider is not giving you a fair estimate, after you have filed this claim, think about shopping for insurance quotes that cater to your vehicle make and lifestyle.

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