When it comes to your car, the worst thing that can happen is to have an accident that results in it being totaled. This can cost you money and leave you without transportation. Some people are unsure what factors would contribute to a car being totaled.
There are some ways to know if your car is totaled following an accident or just damaged. This is something that you need to find out as driving a totaled car is illegal, and will also void any insurance.
What classifies a car as totaled?
According to Valley Collision if you have been in an accident and go to get your car repaired, then your car could be considered totaled if the repairs of your car are over the overall value of your car. So for example, if your car was valued at $3000 but repairs were $3500, then this would be deemed as totaled.
This can vary depending on your state rules so it is best to check depending on where you live. For example, if you were to live in Michigan the totalled threshold for cost of repairs is 75% of the car’s value. So if your repairs cost 75% or more of the value of the vehicle, then it would be classed as totaled.
In some instances, however, the insurer can create their own determination to declare whether a vehicle is a total loss or not.
How do I know the value of my car?
The value of your car is the cash value that the car was worth at that moment just before the accident. This is different from the value of when it was purchased. Your insurer would usually decide based on several factors such as age, mileage, condition and the resale value, as well as the prices of similar cars in your area.
What happens once my car is declared totaled?
If your car is declared to be a total loss, then your car will be signed over to the insurance company to be sold for salvage as it is not recoverable to them. Then, depending on your cover with your insurance and the age of vehicle, a number of options are available to you.
If your car is usually a couple of months old then a new car will be purchased for you. If it is much older, however, then this comes down to your cover level you have if you have paid for replacement coverage. They will replace your vehicle, but if you do not have this as an extra, you will need to be covered for the value of your vehicle which is deemed by the insurance.
If your car is linked to a loan, the insurance company is not required to cover this. You will only be covered for the cost of the car’s value and need to make up the rest of the loan amount yourself. If you do have insurance that has gap insurance, then it may be worth checking this. This will allow them to pay out up to 25% of the actual cash value of the car to cover anything extra you would owe to the loan or finance.
