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Bill Quickel's - Insurance Plus Agencies Inc. Blog

How an Auto Insurance Company Decides If Your Vehicle is a Total Loss or No

12/17/2019

10 Comments

 
Picture
​When you get into an accident that seems relatively minor, you may end up surprised when your insurance company declares your vehicle totaled. Also known as declaring a total loss, this decision relies on different information than you might expect. Understanding the total loss formula will give you some insight into what might happen the next time an accident damages your vehicle.
The Total Loss Formula
As with most other insurance decisions, the adjuster handling your case uses a formula to determine if the car is repairable or a total loss. Even minor car repairs are expensive, so older cars with lower values are often less expensive to replace than repair. A repaired vehicle often doesn't function quite the same or offer the same safety benefits either.

By declaring a total loss, the insurance company can reimburse you with the money to buy a replacement vehicle rather than spending more to cover the repairs. When the car insurance company declares a vehicle as totaled, they usually must pay you its fair market value on the day of the accident. Remember, this is the car’s depreciated cash value at the time of the loss.

What Happens to Totaled Cars?
You can't keep a car that the car insurance company declares as a total loss. In exchange for the reimbursement of its value, the insurance company becomes the legal owner of the damaged vehicle. They sell these cars to salvage yards to recoup a little of their cost.

Salvage yards generally break these cars down into salable parts and recycle the rest, but cars with limited damage may undergo repairs and end up resold as running vehicles again. This means you may see your old totaled car driving around again one day, but it's highly unlikely.

Can I Dispute a Declaration of Total Loss?
When you get into a minor collision but have a car with a very low market value, even a badly dented bumper could tip your car into a total loss. If you want to keep your vehicle, you can try disputing the declaration.

Hire a private vehicle appraiser to make their own assessment of your vehicle's condition and value to back up your claim. If the auto insurance company disagrees, you can argue the case in litigation, but must prove the vehicle costs less to repair than to replace to win the claim.

Getting compensated an adequate value of a totaled car should help you find a reasonable replacement. If you're concerned, talk to your auto insurance company about how they handle declarations of total loss before you get into an accident.
10 Comments
Taylor Hicken link
6/1/2021 01:33:30 am

I appreciated it when you shared that the adjuster uses a formula to determine if your car is repairable or a total loss after an accident happens. My friend just mentioned the other day that her brother was involved in a car crash a few months ago and he needs to file for claims from his insurance company. I will suggest to her hiring a reliable public adjuster who can help determine the right amount of compensation.

Reply
Braden Bills link
7/27/2021 06:24:52 am

I want to make sure that I get my insurance put together properly, but I'm not sure how to go about it. It makes sense that I would want to get a professional to help out with this. They would be able to help ensure that we get the right insurance plan.

Reply
Chance Cook link
7/29/2021 10:50:45 am

It's good to know that your insurance company will reimburse if your vehicle is declared a total loss. My worry was that I'd be out of luck. But this has given me reason to get insurance in case something ever happens.

Reply
Hailey Miller link
10/9/2021 05:39:33 pm

Thanks for pointing out that declaring a total loss can make the insurance company reimburse us with the money to buy a replacement car. This is helpful because my husband and I are planning to buy our only son a new Toyota car. With this, we will also be looking for a reliable agent on Monday who can offer affordable car insurance for him.

Reply
Party Bus Rental and Limo Service in Missouri link
1/19/2022 02:12:05 am

It's great for you to point out that an insured can keep a damaged car even if it's determined to be a total loss. While it may not make sense to a lot of people thinking that he should just take the money to buy a replacement, sometimes, cars hold a bigger value rather than its market value or price. This is a helpful article. Enjoyed reading it. Thanks for sharing!

Reply
Locksmith Woodland Hills link
2/23/2022 02:33:24 am

If you want to secure your car from intruders, always contact professional and trusted locksmith experts because they install innovative locks, which are tough to break by intruders.

Reply
bridging loan link
6/13/2022 07:20:06 am

Your insights is informative. It makes sense that I would want to get a professional to help out with this. They would be able to help ensure that we get the right insurance

Reply
ochuko evidence link
9/13/2022 07:47:38 am

Thanks very much! this article has a lot of information and has answered the questions I have about this topic. I appreciate <a href="https://www.techfiver.com/how-to-dispute-a-car-insurance-claim-against-you">your website</a>. Thanks again.

Reply
Adam Golightly link
10/26/2022 03:44:21 pm

Thanks for explaining how insurance companies reimburse totaled cars and sell them to recoup some of the cost. I wasn't aware that the insurance company you pick will take care of the car after it has been totaled. My cousin is really worried that she will get in a crash and wants to get the insurance that will do what you said, and reimburse the car.

Reply
www.tampa-seo.org link
2/25/2023 07:00:05 am

I think details like this are provided in the terms and regulations of every auto insurance companies, I guess.

Reply



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