If you have been in an auto accident and your insurance adjuster has determined that your car is totaled, you probably have a lot of questions.
How is it determined that your car is a total loss?
Typically, if the cost to repair the damage exceeds 70-80% of the pre-accident value of your car, the insurance company will call it "totaled."
Totaled Car Defined.
Several things are taken into consideration when determining if a car should be totaled:
• Current mileage
• Overall condition of the vehicle
• Cost of the repairs
• If the repairs can be safely executed
• The current value of the car (prior to the accident) as based on retail book value and other similar cars in your geographical area
• The cost of the repairs in relationship to the value of the replacement of the car
• Individual state regulations and definitions of a "totaled" car
Getting paid.
If your car is determined to be totaled and therefore beyond repair, your next question will be about money. How soon will you receive a check? How much will you receive? Will you be able to buy a new car? Will the insurance company buy you a car?
Most insurance companies will cut a check within a few days of examination of the car. The amount paid is usually enough to purchase a replacement vehicle of similar value, however, the specific amount of the check will be dependant on a few things:
• The amount of your insurance deductible
• The determined pre-accident value of your car
• The amount still owed by you to the bank for the original purchase of the car
Your deductible will be subtracted from the insurance claim amount. If you still owe the bank, most insurance companies will first submit a payoff check to the bank and then the remainder, minus your deductible will be sent to you.
For exact details in your particular case, please check with your insurance adjuster.
What if I don't agree with the settlement?
If you feel that your car is worth more than the insurance company deems, you will need to provide proof in the form of receipts that show added value (new tires, new engine, etc.) that you have done. Also examples of cars for sale in your area that are similar to yours, that have a higher price value.
You may also consider hiring an independent adjuster if you believe the settlement is unfair.
Can I keep the car?
If it has been determined that your car has been totaled and the cost to repair it exceeds its value, then the insurance company will take possession of the car and have a salvage company auction off the vehicle. Any monies collected from the auction would be the property of the insurance company.
If you have a strong attachment to the car or feel you can repair the car yourself, state your desires to keep the as soon as possible to your insurance adjuster.
Each state has different rules as to the legalities of keeping a totaled car - so again, rely on the expertise of your insurance adjuster.
Remember that if you do take possession of the car, most states require the title of the car be changed to a "salvage" status. You will not be able to register your car until you can provide the necessary documentation to resume the title to a (previous) salvage title.
How long do I have to find a new car?
Your insurance adjuster should work with you to provide enough time for you to find a replacement vehicle. If your insurance policy allows for a rental, check with the specifics of your policy to see how long you can have a rental as you shop for a new car.
Most companies will only provide a couple of days rental to find a new car after the check is issued. If that isn't enough, you might consider paying a few additional days of car rental from your own pocket to ensure you make the best purchase.
The cost of the couple days of rental is worth the opportunity to make the right buying decision.
