Car accidents in the U.S. occur at a rate of around 6 million per year. That’s a staggering number and one that makes a person wonder how many of the cars involved are still drivable.
Many of those cars end up classified as a total loss. The driver takes absorbs the loss and shops for a new ride.
Is it that simple? Yes and no.
Read today’s post to find out what it means when your insurance company stamps “car totaled“ on your claim.
It Looks Fine to Me
Immediately after an accident most drivers do the old walk-around and give their vehicle a thump on the bumper. “Looks fine to me!” they claim.
Okay, the only driver that says that is either the one who’s in a hurry to get to work or the one who doesn’t have insurance.
Your car may look like it’s only suffered a few bumps and bruises. Your insurance company may have a different opinion.
Ultimately, your insurance company has the final say in whether to total your car or not.
Is Your Car Totaled?
I totaled my car! Now, that’s a common post-accident statement. After all, even a moderate crumple in the bumper looks hopeless.
That statement, however, is subjective, and again, your insurance company may not agree. Insurance companies use a formula to determine whether it’s a total loss. Their formula uses the following factors:
- Cost of repairs
- Rental car expenses
- Car’s cash value
First, they calculate the cost of repairs and how much they’ll reimburse you for use of a rental car. Then, they determine your vehicles’ actual cash value. If repairs and expenses total more than the cash value of your car, they’ll deem it a total loss.
Keep in mind, each insurance provider uses its own set of parameters and percentages when calculating total loss.
You Have Options
If you’re like most people, you’ve already put a value on your car and it’s usually higher than both the actual cash value or the amount the insurance company wants to give you for it.
Instead of arguing with your insurance provider, or even worse, going into litigation, you do have other options.
You can accept the decision of your insurance adjuster, take their check, a.k.a. settlement, and then find a business where they offer cash for junk cars.
If you take this route, your insurance company will rely on a different formula. You should get the cash value of your car, minus your deductible, and minus what the insurance company could get should they sell your car at a salvage yard.
Make Your Own Calculations
You can always accept the word of your insurance adjuster, let them send you a check, and let them total the car. Or, you can negotiate a settlement and keep your car.
Whether you decide to repair it on your own or sell it for cash, it’s your call. The label, car totaled doesn’t mean you’re required to relinquish total control!
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