Few things are more frustrating than going through a car accident, filing a claim, and then finding out your car is a total loss. Sometimes, it’s fairly obvious that the vehicle isn’t likely to be repairable. Other times, news of a total loss can come as something of a jolt. Here’s what you want to know to make the process go as smoothly as possible.
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Understanding What Total Loss Means
A total loss does not necessarily refer to the seriousness of damage to your car. Rather, it takes place when the cost to fix the damage is excessive when compared with the value of the automobile. Every insurance carrier is different, but most will think about a total loss once the repair quote reaches 70-75 percent of their automobile’s value.
This can be confusing for damages that do not seem all that severe. For example, an older vehicle that simply needs a replaced fender and headlight might be a total loss if the value of the car is just $1,500. Conversely, a newer car with a value of $15,000 may stay perfectly repairable even with extensive damage.
It’s all about what makes fiscal sense. Paying more to fix than a car is worth isn’t prudent for an insurance provider. In cases like this, the business will offer a settlement for the actual value of the car and dispose of the car.
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Understand What Your Options Are
When your insurance adjuster informs you of the intent to total your vehicle and provides you with a settlement amount, you have a couple of alternatives. You may:
Accept the Settlement
This is the quickest solution for getting your cash to acquire a new car. Your settlement includes the value of the vehicle minus any deductible on your policy. If you are the claimant in a liability claim, there generally will not be a deductible since you’re not to blame. If your vehicle has a lienholder, the lienholder will be paid and you’ll get the remaining balance if there’s any. From time to time, the settlement might not pay for the complete balance of your loan, so you will still have to continue payments to secure your credit score.
Dispute the settlement offer
If you think that your car is worth more than the insurance carrier offers you, you have the right to ask an independent appraisal to ascertain the true cash value. This evaluation will require any aftermarket improvements or specialization options under the account, in addition to the general condition of the automobile. Bear in mind, however, it might cause a lower settlement amount if the car is worth less than the insurer thought.
Settle with a buyback
Some insurance companies are ready to sell your totaled car back to you in the event that you would like to keep it. This may be a long and complicated process, and you ought to bear in mind you will be given a salvage title for your car. This means you won’t be able to label and insure the vehicle again until appropriate repairs are completed and approved law enforcement staff has certified that these repairs are appropriate and complete.
Cancel the claim
If you truly don’t need to total your automobile and you do not mind paying for repairs out of pocket, you can cancel your claim completely. This will let you keep on driving the vehicle without the hassle of a salvage title. However, it also means you won’t get any reimbursement from the insurer for the collision. Canceling a claim generally also means that you waive the right to make additional claims from the exact same injury in the future.
Understand How to Prepare Your Vehicle for Settlement
Most people decide to accept the settlement offer immediately or after an appraisal for real cash value was completed. When an insurance carrier pays you a settlement, it’s literally buying your totaled vehicle from you. Your car becomes firm property to get rid of as the company sees fit.
As such, it’s vital that you remove any personal belongings from your automobile prior to the transfer of ownership occurs, including any papers containing your sensitive private information. An insurance provider can, at their discretion, permit you to do this after it issues your check, but it isn’t required to. When collecting your personal belongings, make sure you collect your license plate also. It’ll transfer to your vehicle when you register it.
Certain items shouldn’t be removed from your car or truck before settlement. Although it’s acceptable to eliminate an aftermarket radio if you installed radio, it’s not okay to remove the tires and wheels in many cases–even if the tires are brand new. If you installed aftermarket wheels, your adjuster will enable you to eliminate them so long as you replace them with the vehicle’s wheels.
If there’s something you would like to remove but you aren’t sure whether you need to, ask your adjuster for advice. If you’ve had specific improvements factored into the value of your automobile through an appraisal, and the settlement deal includes that added value, you shouldn’t eliminate those items under any conditions.
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Understand What Happens After the Settlement
Usually, as soon as you accept the settlement, there’s nothing left for you to do except cash the check and go auto shopping. However, you should understand that accepting a settlement normally requires you to sign a statement acknowledging that damages from the accident have been adequately compensated and that you waive the right to pursue additional damages. Therefore, make certain you are happy with the settlement prior to making any decisions.
If you’re in doubt or confused about whether the settlement offer is reasonable, consider obtaining legal counsel. This normally is not necessary if the only damages are for the individual property. But if there are injuries and medical costs related to the collision, determining the actual loss amount is not quite so straightforward. Bear in mind, as soon as you sign, you get rid of the right to seek additional damages, so talking with a lawyer about any concerns might be in your best interest. Don’t permit an adjuster to pressure you into a settlement with which you’re uncomfortable.
Assessing the total loss process after a car accident does not have to be intimidating. As soon as you recognize how the method works and what your rights are, you’re in a fantastic position to negotiate your claim for a positive outcome. Don’t be afraid to call your adjuster with any questions. Just bear in mind that the procedure can take a while, so try to be patient as you wait for your settlement.