What should you do if your car is declared a total loss?
When the actual cost of a car is less than the repair cost of that car then it is declared a ‘total loss’. These claims require more attention and effort of an insured person because it is not the same as other minor claims.
We will provide you information regarding all the aspects related to a total loss.
Total loss claims and actual cash value
- If you purchased property damage liability or collision coverage or comprehensive coverage in your car insurance policy then it helps to cover for the ‘total loss’. It is mandatory for the drivers to purchase property damage liability because you can cover your damages from property damage liability only by filing a claim against another driver’s property damage liability if another driver is at fault. Your car insurance company helps you to know the total loss which is covered through collision insurance. In collision coverage, it does not matter who is responsible for an accident for the payment of damages.
- If you have an accident, you should file a claim with your insurance company. Your car insurance company appoints a claim adjuster to check the damages to your vehicle and assess the amount of loss of property. The claim adjuster determines if it is a the total loss.
- According to the reports of claim adjuster if the repair cost of a car is more than its actual value then it will be declared a total loss. When salvage value and cost for the repair of the vehicle is more than its actual cost of the vehicle then it means a total loss. To declare a total loss some states use Total Loss Threshold in which damage exceeds over a certain percentage of the actual cost of the vehicle. While in other states Total Loss Formula is used to declare a total loss in which total repair expenses plus salvage value of the vehicle is more than the present or actual cost of that vehicle.
|Names of the states||TLT/TLF|
|Alabama, Iowa, Kansas, Kentucky, Maine, Massachusetts, Montana, New Hampshire, New York, North Carolina, North Dakota, South Carolina, Tennessee, Virginia, West Virginia, Wyoming||75%|
|Alaska, Arizona, Connecticut, Delaware, Georgia, Hawaii, Idaho, Illinois, Louisiana, Maryland, Minnesota, Missouri, New Jersey, New Mexico, Ohio, Pennsylvania, Rhode Island, South Dakota, Utah, Vermont, Washington||TLF|
|Arkansas, Indiana, Michigan, Wisconsin||70%|
|Florida, Mississippi, Oregon||80%|
What happens if your car is declared a total loss by claim adjuster?
Some auto insurance companies require the following things if your car is declared a total loss:
- Handover the key of the vehicle to the claim adjuster.
- If you have any additional key of the car then give it to the claim adjuster.
- You need to remove personal items from the vehicle and also remove the number plate.
- You are required to fill the associated paperwork.
- If your car is on lease then contact the leasing company.
When you do these things quickly then your process becomes smoother. Your car is kept by your car insurance company after declaring a total loss. The insurance company also informs the DMV that the car has been totaled. The car will be declared salvage and any customer of salvage vehicles can buy this car from the car insurance company.
Some companies provide an option to repair a car if you do not want to sell that car. But you receive only the amount left after subtracting salvage from the actual value of the car. Some insurance companies will require you to obtain a certificate of salvage cars. But some insurers guide the customers about the drawbacks of keeping total loss vehicles.
If you do not agree with it being a total loss
If your car’s actual value exceeds its repair cost but the claim adjuster declared a total loss. At this point, you can negotiate with the claim adjuster. You must need to show proof which shows that your car is more worth than its repair cost. Adjuster may reconsider and re-evaluate the value. If you still are not satisfied with the decision of the claim adjuster then you can file a case in court against the claim made by the insurance company .
How are you paid for a total loss?
The actual value of the car is used to compensate if your car is a total loss. The actual value of a car is determined by depreciating its value. Different insurance companies use different methods to calculate the actual value of the vehicle. They calculate the actual value of the car on the basis of different factors such as the age of the vehicle, wear, and tear, etc. The insurer will pay you the actual value of the car if you are the owner of the car and if you agree on this value. The insurance company will compensate the leasing company if your car is on lease.
If your car is on lease you can buy ‘GAP insurance’ which helps to cover the remaining balance in a lease.
Which company is the best at claims?
There are different car insurance companies that are the best at claims in the USA. Some car insurance companies are listed below:
- Auto owners
- Amica mutual
- NJM insurance company.
- All state
- The Hartford
- State farm
- Liberty Mutual
- 21st Century
- Automobile group
It is important to know and understand these details about the coverages for your auto insurance policy. It not only helps a consumer understand their financial exposure in the event of an incident but also helps them compare auto insurance quotes in a fair way.
At MyMoneyMyQuotes.com, we help consumers find the right information so they can make better and sound decisions for their auto insurance needs.