What to Do After a Total Loss Accident
Even if you drive sensibly, always use your signals, and check your mirrors often, you may still find yourself involved in an accident that damages your car. In some accidents, your car may be deemed a total loss. This doesn 't just happen in a seven-car pile-up €“ even minor accidents can write off vehicles. A total loss claim is where your car has either been written off as a total loss because it cannot be repaired, or that the cost of repairs exceeds your car 's actual cash value (ACV).
How is a vehicle a total loss?
There are many reasons why your car can be deemed a total loss €“ here are just a few of them.
- The cost of repairs exceeds the car 's value. If your car 's value is lower than (or a certain percentage of) the cost of repairs, the auto shop may deem it not worth making repairs.
- If it 's not possible for a car to be made road-safe again, a total loss may result.
- State laws. Some state laws impact whether a car is deemed a total loss or not.
What happens next?
Your insurer has told you that your car is a total loss. These are some of the next steps that will follow.
- Report the claim as soon as possible. A total loss claim is not one you want to sit on. The sooner you file a claim, the sooner the insurance company will start working on your claim.
- Pay your deductible. In many cases, you may be required to pay your auto insurance deductible.
- Transfer ownership. You 'll essentially sign over ownership of your totaled vehicle to the insurance carrier settling the claim. From there, the insurer sees to its proper disposal. You should maintain your insurance coverage on the vehicle until it 's officially taken off your hands.
- Receive payment. Your car 's actual cash value (ACV) is the amount, minus any deductible and fees, the insurer will pay to cover the total loss settlement. If you own the vehicle outright, you get the check. If you lease or finance the car, the leasing or financing company will receive the check. If any money remains after paying off your lease or loan, it 's yours. If not, you may be on the hook for the difference.
- Buy a new vehicle. Once you 've found the right vehicle, it's time to buy/lease it and find the right insurance coverage. Before you drive off the lot, consider the additional coverage, such as Roadside Assistance.
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