3 Insurance Questions You May Have After Totaling Your Car

Even though it only takes a second for a car accident to occur, this one second can leave you injured and your car totaled. If your car insurance company tells you that your car is considered totaled, you may wonder what this really means and whether you have any options. Here are three questions you may have about car accident claims for totaled cars.

What Does “Totaled” Mean?

After a car accident takes place, the insurance company handling the claim will look at the vehicle and determine what work is needed and the costs of the work. When the repairs needed will cost more than the car is worth, the insurance adjuster will consider the car totaled.

In this situation, the car insurance company would probably give you a check for the value of the car before the accident took place.

What Happens To The Car?

If you accept that the car is totaled and agree to the amount the insurance company will give you, they will take the car and send it to a junkyard. You will receive the check for the amount they offered you.

If you decide that you really want to keep the car and make the repairs yourself, you could keep the car; however, you will not receive the full amount the insurance company had offered you. The insurance company will actually make several deductions from the amount they offered, which will include the following:

  • Your deductible – The amount of your deductible is the first thing they will subtract, and this could be $500, $1,000, or a different amount.
  • The scrap value – The second thing they will deduct is the amount of money they would have received from the junkyard when they scrapped the car.

After these two items are deducted, you will then get the remaining amount of money.

What If You Owe More Than The Amount Offered?

There are also times when another problem occurs after a car is declared totaled. If you owe more money on the car than what the insurance company offers to you, you could be stuck owing money to the lender. The lender would receive the check from the insurance company, and you would be responsible for paying the balance on the loan after the payment is applied.

The only way to get out of this is if you have gap insurance on the car. Gap insurance is an extra you can add to your car insurance policy, and its primary purpose is to pay this type of difference after a car accident occurs.

If you just received the news that your car is totaled, you may want to call your car insurance company to find out if there are any other options to choose from.

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