Getting into a car accident is scary. And in addition to potential physical injury, you may need to worry about replacing your vehicle. When an insurance carrier determines that your car is “totaled,” that typically means the cost to repair the vehicle is more than the current value of your car. Having vehicle insurance is critical to getting reimbursed if your car is totaled in an accident. This reimbursement is known as a total loss car insurance settlement.
Read on to learn what you need to know about total loss car insurance settlements.
With Credible, you can compare car insurance quotes from top insurance carriers in minutes.
A total loss insurance settlement is the amount of money your auto insurance provider offers you based on your vehicle’s pre-accident market value. The insurer will look at the car’s pre-accident condition, additional features and current sales prices of the same model with the same features, and in a similar condition, to estimate a cash value.
If you still owe money on your vehicle, your insurance carrier will issue the payment to the lender or lease company.
In most cases, an insurer will cover the cost of your totaled vehicle. If you were at fault in the accident and have collision coverage, your insurance provider will pay the cash value (minus any deductible). The same is true if you have comprehensive coverage and an unexpected covered event (like a fire) totals your car. If you weren’t at fault and the other party has insurance, their car insurance policy will cover the cost of your vehicle through their property damage liability coverage.
You may need to pay some or all of the costs if:
When an insurance carrier determines the settlement offer for your totaled vehicle, it considers several factors, including:
It’s important to know that you don’t have to take the first settlement offer from the insurance carrier. If you want your insurer to reconsider the settlement offer, follow these steps:
The time after a car accident can feel a bit chaotic and overwhelming. You should do a few things as quickly as possible following your accident.
In most cases, lenders require borrowers with loans on their vehicles to have full coverage car insurance. If you’re at fault for an accident and have full coverage insurance, your insurer should cover most of the cost of the vehicle (minus your deductible). You may need to cover any difference between the actual cash value of your car and what you owe on your loan.
Since cars depreciate quickly, your insurance provider may offer a settlement lower than what you owe on your vehicle. You’re responsible for any difference if there’s a balance after the insurance pays out. If you opted for gap insurance when you purchased your vehicle, the gap policy should cover any difference between what you owe and the insurance payout.
With Credible, you can compare car insurance quotes from various insurance providers, all in one place.