What happens when your car is totaled?

Perhaps the “total loss” may not be what you want to hear after your car is destroyed in an accident or disaster, but not everything is lost. If your car is assembled and there is insurance coverage, the insurance company will pay a cut amount to make up for the car instead of paying for repairs.

Here is what to expect, the type of insurance that plays into effect, and how to move in the process.

Learn more: How does cars insurance work? The basics clarified.

Some states determine the threshold of damage when a total car is made, such as 75 % of the market value. For example, a $ 10,000 vehicle will be raised if the estimated repair costs exceed $ 7,500. In some states, insurance companies apply their own formulas to determine when the car is a complete loss.

No, spreading the airbag automatically that the car is collected. The total depends on the value of the car and the cost of repairing it. As long as the car can be repaired at a lower cost than the total loss of the insurance company, the insurance company will usually pay for repairs instead of the total car.

Nevertheless, the airbag systems are expensive, so the cost of replacing them can pay the total repair bill on the total threshold, especially if there is a lot of other damage or it is an old vehicle that has lost a lot of its value.

More than a quarter of the auto collision calls (27 %) were considered total losses in 2023, an increase of 29 % from 2020, according to the Lexisnexis report published in June 2024.

More cars are collected because the cost of repair is rising. All of these luxury sensors, cameras, radar units and other electronic components that make driving easier and more expensive, so slight accidents can cause expensive repairs. Fixing these components requires special equipment and training, which makes repairs more complicated and expensive.

The average cost of repair for car insurance demands has increased by 26 % in the past two years, according to the study of the Auto JD Power 2024 claims.

Below are the types of car insurance that can pay the price of a car concluded, depending on the situation.

• Collision It pays the actual cash value of your college after collision with a vehicle or another object, such as the building. The claim boost will be reduced by your opponent.

• Comprehensive insurance It pays the actual cash value of your college after damage due to sabotage, cold, floods and other events. Such as collision insurance, the payment will be reduced through your opponent.

• Other driver’s property damage Responsibility insurance Cover the damage to your car in an accident if the other driver is wrong. Their insurance will pay the driver’s policy.

• The uninterrupted property is damaged Insurance covers damage to your car if another driver causes the accident but has no insurance or insurance.

Most of the car owners require the purchase of minimal liability insurance, while others require insurance driver to be secured. To cover your car completely, you need a comprehensive collision and insurance. Both are optional in every state, although your lender or leasing company will usually require them if you still owe money on the car or rent the car.

Read more: The most common type of car insurance is the most common types of

After submitting a car insurance claim, you will also need to obtain an estimate from a repair store, unless the car is clearly assembled. If the car is repaired, the insurance company will send an officer to evaluate the damage and estimate the cost of repairing it.

The insurance company will determine whether the car is a total loss if it is not possible to fix it safely or the estimated cost to repair it approaches or exceeds what the car deserves at the time of the accident.

In general, regarding the demand for the total loss, the insurance company will pay the actual cash value of the car, including your opponent. The actual cash value is the market value – what is the amount of sale of the car in a reasonable way – before the damage occurs. If another driver causes the accident, securing the driver’s responsibility will pay you the actual cash value of your car, to the extent of his police.

Depending on the country and the insurance company, you can also submit a claim for other costs, such as sales tax and registration fees for the alternative car.

Yes, you can try to negotiate a higher leveling if you think the car was worth more than the insurance company’s offer.

“To do this, you have to provide evidence such as miles records, service history and certificates of mechanics to show that your car was equal to more than just a model of its style and model,” says the Insurance Information Institute.

Consulting insurance companies industry databases to determine the actual cash value. A variety of companies provides online resources for consumers to search for car values, such as JD Power and Kelley Blue Book.

You can get an insurance examination for a frozen car if you have a clear and clear car. Your rental company usually gets the check if you have rented the car, and your lender is paid first if you still owe money on the car. If the insurance leveling is more debtor than you owe, you will get everything that remains after the loan is paid.

Yes, you still have to pay the loan or the lease contract if the car is collected. If the insurance payments are less than the loan or rental balance, you will be on a hook for the difference.

Most new vehicles lose 20 % of their value in the first year, according to Kelly Bluk. Therefore, it may end due to a large part of the money after the insurance is settled if the car is collected in the early years of the loan, especially if you make a small introduction batch.

How to cover the gap between insurance and loan balance/rent

Here are several ways to protect your money in the event of a gap.

Gap’s insurance

GAP insurance pays the difference if you owe more car loan or lease contract more than the insurance level after your total car or stole it. Your collision or comprehensive insurance will pay the actual cash value of the car, from which your opponent is presented, and the gap insurance will help pay the rest of the loan or rent.

The gap insurance is usually required when renting a vehicle, and many car dealers offer to sell it when purchasing a new car. But usually, you can get coverage for less than a car insurance company, usually for about $ 20 a year, says Triple-I says.

Securing a new alternative to cars

The new insurance to replace cars is an additional option that you can buy with collision and comprehensive coverage. Instead of paying the actual cash value of your concluded car, the policy that contains alternative coverage of new cars is pushing for a new car of the same model and model. Some insurance companies offer to replace new cars and the gap insurance in one package.

You can keep an integrated car, but keeping it will affect the payment of insurance compensation, so you will need to inform the insurance company immediately. Usually, insurance companies sell total rescue cars, so if you want to keep the car, the insurance company will deduct the car rescue value from the settlement boost.

Some of the collected cars can be fixed; Others beyond installation. Let the insurance company know if you want to keep and repair the car.

Check with your insurance company and a country to obtain rules for possessing the total cars. In general, rescue vehicles cannot be registered or driving on public roads until they are rebuilt and searched. Insurance companies may not provide a comprehensive collision and coverage of vehicles with rescue nicknames.

Sometimes cars are assembled although they are still operating. The damaged cars are one example. If you want to keep a damaged cold car, talk to your claim officer and learn about the next steps required to drive it legally.

It may take anywhere in less than two to more than two months to receive a total car inspection, according to the Solutions Lexisnexis Risk 2024 report. Among consumers with total losses, 40 % said it took at least a month to get a final boost.

The appointment of a lawyer can help obtain a fair settlement to demand complex insurance, but you will need to balance this possible gain at the cost of legal fees.

Prices do not generally rise because you have made a comprehensive claim, such as a claim of the total car due to the damage of the storms. Your prices will not rise if you raise a claim against another person after they have been broken. Your prices may rise if you make a collision demand for an accident that was your mistake.

Amy Danis and Tim Mane edited this article.