What Happens If Your Car Is Totaled

Accidents vary a lot in severity, from minor scratches to totaling the vehicle. Totaling a vehicle is something nobody really wants. To conclude that is not worth repairing a vehicle is not an easy task, but it must be done, in order to properly reimburse the owner. Find out more about what happens if your car is totaled. Also, if you are interested in shopping around for car insurance, check our webpage and get a car insurance quote for free.

A car is considered totaled when the cost to fix the car exceeds the value of the car. Some states have laws that define a totaled vehicle by specific thresholds. For example, in Alabama that limit is 75 percent. That means that if the cost to repair the vehicle surpasses 75%, the car is considered totaled. However, in many cases, the insurer determines whether a vehicle is considered a total loss or not.

If the insurer determines that the car is totaled, then you will be reimbursed. But you will not be reimbursed at the original market value. Many people assume that they will get the money for a new spanking car. Unfortunately, this is not true. Companies take into consideration car’s depreciation and they reimburse the owner at the current market value, which is usually lower than the original price. When assessing the value of your car, the claim adjuster and the insurance company will do the following:

  • Evaluate the condition of the car prior to the accident
  • Research the market value of your car
  • Get 3rd party appraisals of your car

After the condition of the car was determined (excellent, good, fair, or poor condition) the company will research the current market value. Most insurers will contact local dealerships and 3rd party companies to see what a car similar to yours is selling for in your area. Then, they will give you some numbers and try to settle the claim.

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