Car Insurance Settlement for a Totaled Car

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Things to know...
  • After you file an auto insurance claim, the vehicle’s damage and current value will be assessed by the adjuster
  • You will be required to pay your insurance deductible if your vehicle is totaled
  • You may dispute your claim in several ways if you disagree with the result

Unfortunately, auto accidents are common, and many people will be in at least a couple of fender benders throughout their driving years.

Some accidents are much more serious, and there is a chance that your car may be totaled if the cost of repairs is high in relation to your car’s value.

Learning more about the claims process for a totaled car helps prepare for this potential outcome. After all, the safest driver is an informed one.

Want to ensure your car is covered in case of an accident? Enter your ZIP code above and compare at least three to four policies today!

Filing a Claim

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When your car has been severely damaged, filing an auto insurance claim is necessary if you want your car insurance provider to pay out on your policy.

A typical auto insurance policy may pay for:

  • Vehicle repairs
  • Property damage
  • Loss of personal property in the vehicles
  • Medical expenses

It is usually best to file a claim as soon as possible after an accident.

Filing a claim against your car insurance policy is usually a simple, straightforward process. You may complete this step over the phone by contacting the provider’s customer service or claims department directly. Some providers also allow you to file a claim through their website.

When filing an auto insurance claim, you will be required to provide substantial details regarding the event. You may be able to recall these details more quickly if you file a claim within a few hours or days after the event.

Keep in mind that many car insurance companies have a time limit regarding when you can file a claim. Waiting too long to file a claim may result in your coverage not paying out on the claim at all.

— The Need to Pay Your Insurance Deductible

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When you file a claim against your auto insurance policy, you are required to pay your deductible.

The deductible amount may vary based on your specifications when you set up the policy, but a reasonable range for the deductible amount is between $250 and $1,000.

The deductible is required even if your car is totaled. When you compare insurance quotes from various providers, consider asking for quotes on several deductible amounts so that you can determine the best value.

Insurance proceeds will pay up to the coverage limits for an approved claim. Any expenses that exceed the coverage limit may be your financial responsibility. Therefore, it is possible for drivers to pay more than the deductible amount when filing a claim.

Savvy drivers will make adjustments to their coverage before an accident occurs to ensure that they have ample coverage, and shopping around for new coverage can help you to save money on your premium.

Understanding the Insurer’s Estimate

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After you file a claim, your auto insurance company will typically send an adjuster or estimator to review the damage to your vehicle.

An estimate for vehicle repair costs will be determined based on typically repair rates in your local area. The adjuster will then review your coverage limits and your vehicle’s current value.

— How Your Car’s Current Value Is Determined

If the adjuster determines that the cost to repair your car exceeds the value of your vehicle, your car likely will be totaled by the insurance company. The car’s value is determined by reviewing several factors, and these include:

  • The vehicle’s year, make, and model
  • The vehicle’s mileage
  • Special features
  • Market values for similar vehicles

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– How Your Coverage Limits Factor Into the Claim Results

The vehicle’s current value will play a major role in determining if the damage sustained is enough to total the vehicle. However, coverage limits will play a role in your claim result as well.

The type of coverage you have will not impact whether or not the vehicle can be considered totaled, but it can affect how much you’ll have to pay out-of-pocket.

For example, if the cost to repair your vehicle damage is $20,000 and if you only have $15,000 in related coverage, you may have to pay the remaining $5,000 plus your deductible amount.

In the event your vehicle is totaled, the insurance company may pay out an amount equivalent to the lesser of your vehicle’s replacement value or coverage limits.

The claims settlement is not always sufficient to pay off the outstanding auto loan balance.

When you compare auto insurance rates, consider asking for a quote for GAP insurance as well. This particular coverage pays the difference in the event of a serious accident to prevent you from incurring a significant financial loss.

Disputing the Result of Your Claim

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There are many reasons why you may dispute your auto insurance claim.

For example, you may think that the adjuster estimated the car’s value too low, the repair costs too high, or both. These factors can result in a vehicle being totaled by insurance without true justification or cause.

It’s possible to dispute your auto insurance claim. Some drivers may need to pursue several options before reaching a satisfactory conclusion. Some of the options for disputing the claim include:

  • Discussing the matter with your insurance company directly
  • Seeking mediation from an independent third party
  • Contacting your state’s insurance department
  • Seeking legal assistance

– What It Takes to Successfully Dispute a Claim

To successfully dispute your claim, you should have documentation attesting to the current value of the car in its normal condition.

You also should contact several repair companies to obtain repair quotes. Documenting these two factors is necessary to substantiate your claim dispute.

Preparing for a Potential Auto Insurance Rate Increase

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Regardless of whether your car is totaled or not, filing a claim could cause your insurance rates to increase. If you have multiple claims on your driving record in recent years, your insurance coverage may even be canceled.

You should prepare your budget for a possible rate increase that may occur upon renewing. It is also wise to compare different insurance quotes from a few leading providers to determine if financial savings are available.

A serious car accident can be stressful to deal with, and your challenges can magnify when your insurance company totals your vehicle during the claims process.

Before you decide how to proceed, take time to research the claim result to determine if the verdict was justified.

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