A car is said to be totaled when the cost of fixing it exceeds the vehicle’s value. Some jurisdictions have rules that set specified standards for what constitutes a totaled automobile. If a car is worth $7,000 and the repair estimate is $6,000, the vehicle will very certainly be considered wrecked.
Collision and comprehensive coverage assist in the replacement of a wrecked car. Your auto insurance policy typically requires these two coverages if you’re leasing or financing your vehicle. If you have a paid-off vehicle, they aren’t necessary. If your automobile is totaled and you don’t have comprehensive or collision coverage, you may have to pay out of pocket for a replacement vehicle.
You should do a few things before and after your car is declared totaled if you’re involved in a car accident. You should Initiate an insurance claim with your agent. Your insurance will pay you the actual cash worth of the wrecked car, less your comprehensive or collision policy deductible.
Insurers sometimes use a range of factors to determine the value of your automobile at the time of the accident, known as the “actual cash value” in insurance parlance, such as its age, condition, mileage, and resale value, as well as the selling price of similar cars in your area.
It’s possible that you still owe more on the automobile to your lender than the insurance payment you get. The outstanding debt on the automobile lease or loan is your responsibility in that instance. Let’s say you owe $10,000 on your automobile loan, but the value of your vehicle has depreciated to $7,000 when it’s totaled. If you have collision insurance, your insurer will pay you the actual cash worth of your automobile, which in this example is $7,000. You’d have to pay that amount plus the remaining $3,000 out of your pocket to your lender.
In certain circumstances, a totaled automobile is not the fault of anyone. Let’s say a tree falls on your parked auto, and your insurance company considers it destroyed. In some situations, this may imply that you will be compensated for the deductible deducted from your insurance claim. It would be best to consult with a professional car accident law firm like Abel Law Firm for your better chances of winning the case.