If you are in a car accident, your insurance company may decide to write off your vehicle as a total loss if it meets the insurance total loss car value. This is the amount of repair cost at which they will total your vehicle and pay for a replacement.
What Is an Insurance Total Loss Car Value?
Insurance total loss car value refers to the total in which the insurance company decides to forgo repairs and list your vehicle as a total loss. If you are in a car accident and your vehicle requires expensive repairs, your insurance company may consider your vehicle a total loss. This means that it is totaled and, depending on your policy, they will replace it for you. The insurance company usually determines this amount by calculating the value of your vehicle and comparing it to the cost of repairing it.
How is the Total Loss Valued Calculated?
There isn’t a single way in which insurance companies calculate the total loss value of a vehicle. Instead, it usually varies from state to state, and even provider to provider.
Many car insurance companies use a percentage of the cash value of the vehicle when deciding when a total loss value occurs. This is usually a set percentage, meaning if the repairs will cost up to a certain percentage of the total value of the car, they will mark it as a total loss. According to ValuePenguin, this amount is usually somewhere around 80 percent but, it can be anywhere between 51-80 percent. Some states have a set percentage the insurance company must consider a total loss value.
The actual cash value refers to the value of the vehicle before the accident. Insurance companies calculate this number differently too. They each have their own software to make calculations. While you may not have access to your insurance company’s software, there are other methods you can use to determine if your vehicle is likely a total loss.
You can usually get a good idea of the value of your vehicle by researching its Kelley Blue Book value or reviewing how much it is currently selling for on online sites. But, keep in mind, this is usually a range, and many factors affect price, including the condition of the vehicle and your location.
How Does the Insurance Company Handle Repairs?
When insurance companies pay for repairs, they usually collect bids from different mechanics. They may choose the lowest one to avoid over-paying, but you do have a choice in where you go for repairs. While your insurance company cannot require that you receive repairs from a certain shop, they can request additional price quotes if they don’t believe a price is fair.
You have the option to negotiate with the adjuster if you don’t believe they are providing you with enough compensation to make the necessary repairs appropriately.
Whether your insurance company covers repairs, and how much, will depend on your policy. Some drivers reduce their coverage for older cars, which may mean they don’t cover repairs at all.
Factors That Go Into Calculating the Value of Your Car
The value of your vehicle right before the accident is what the adjuster will use to determine whether or not the insurance company will claim it as a total loss. It can be difficult to place a value on a vehicle that is now damaged, but insurance companies include the following factors:
- Wear and tear
The adjuster will compare the condition and value of the vehicle prior to the accident to the cost of repairs, determining if it is worth it to make them or not. Newer vehicles that are worth more are more likely to be repaired versus older cars that have a lot of miles.
You and your insurance company will need to come to an agreement on the value of your vehicle. If you agree to a total loss, then instead of repairing your totaled vehicle the insurance company provides funds to buy a new vehicle of equivalent value.
What to Expect During a Claims Process
A lot goes on between the time when you file an insurance claim and when the insurance company officially claims your vehicle as a total loss. This is what you can expect after filing a claim:
- Your insurance company sends an adjuster to calculate damages.
- The adjuster determines if the vehicle can be repaired for less than the insurance’s total loss car value.
- The adjuster conducts an appraisal, determining the value of the vehicle before the accident.
- The adjuster orders an appraisal from a third-party company and compares the two.
According to Insure.com, you don’t necessarily have to agree to a total loss. If you don’t agree that your vehicle should be totaled, you can try negotiating with the adjuster. You will most likely need to submit proof stating why your vehicle is worth more than they claim and you have a right to hire your own appraiser if you don’t agree with the appraised value.
If you agree with the total loss, then you should remove your plates, personal belongings, and fill out the insurance paperwork. Some insurance companies may allow you to buy back your vehicle for a reduced price, but it will have a salvaged title and you may have difficulty finding an insurance company that will insure it. Otherwise, your vehicle is sent to auction.
It is important to file your claim as soon as possible, especially if you need a vehicle to get to work. The claims process can take some time to be processed and you can speed it up by notifying the insurance company and responding to any negotiations as soon as possible.
An insurance total loss car value is the amount in which an insurance adjuster decides to write off a vehicle, rather than cover repairs. If a total loss occurs, you should receive compensation to replace your vehicle, depending on your insurance policy.
Check this out if you need additional information, resources, or guidance on car insurance.
This content is created and maintained by a third party, and imported onto this page to help users provide their email addresses. You may be able to find more information about this and similar content at piano.io