Auto accidents happen all the time and they usually result in huge losses when they do. Loss of lives and property damage are some of the consequences of road accidents. If you are involved in an Accident and your car gets ‘totaled’ it means that the Vehicle has been destroyed beyond repair or that it will require more money to repair it than the actual value of the car. It, therefore, makes financial sense to get another car than to repair the wrecked one.
The Role of Your Insurer in a Car Accident
From the premiums you pay, your Insurer should pay you the exact value of your car should it get totaled in an accident. The value of vehicles change with time and you and your insurer should find a way to determine the exact value of your car at the time of the accident.
If the two of you cannot agree on the value of your car and how much the insurer should pay, the insurer should follow the total loss guidelines for accident vehicles as outlined in the regulations of that particular state. The state regulations usually give the insurer three methods to determine the value of vehicles involved in an accident which include:
- The cost to replace the car with a similar available and comparable vehicle in that particular area.
- To offer a cash settlement to the victim based on the current value of other comparable vehicles in that particular area. or
- The vehicle owner and the insurer can agree to use other methods of determining the value of the car such as external auto-value guides like NADA and Kelley Blue Book.
If the insurer cannot find comparable vehicles in your local area, they extend the search radius by 25-mile increments until they find other cars that are comparable to yours. You can agree to increase the search radius past the 150-mile mark if finding comparable vehicles proves difficult. The insurer must also factor in the other applicable fees such as taxes and vehicle transfer fees when determining the payout for the totaled vehicle.
What if you keep the totaled car?
If you decide to keep the wrecked car after the accident, your insurer will have to deduct the value of the wreckage from the payout. You can also find wrecked car buyers for your totaled car. The insurer will add all the taxes and vehicle transfer fees to the actual value of the car and then get an appraiser to determine the worth of the wreckage.
This figure will then be deducted from the earlier figure when determining your eventual payout. The insurer is then required by law to report the wrecked auto to the relevant licensing department of that particular state.
What about disagreements?
If you fail to agree on the value of the car with your insurer, you can hire an independent appraiser to do the valuation as per the appraisal provisions in the insurance policy.
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