You’ve just been informed by your insurance carrier that your car has been totaled. What does this mean, exactly? If you’re asking yourself “how much will insurance pay for my totaled car?” or wondering exactly what a total loss means, we can help. Here’s what you should expect if your car is totaled.
When Do Insurance Companies Total a Car?
An insurance company considers your car totaled, or a total loss, when the damages cost more to repair than what the car is worth. Depending on the severity of the damages, you may already know that your car was going to be deemed a total loss.
If you have an older vehicle, you could be surprised to learn your car is totaled. Even with minor damage, repair costs may still be enough to outweigh the actual cash value of your vehicle.
An insurer may deem the vehicle a total loss even if the cost to repair is less than the value of the vehicle, but within a certain percentage of the vehicle’s value.
What Happens When Insurance Totals Your Car?
After you file a comprehensive or collision claim, an adjuster will review the damages to your car. After your car is appraised, your insurance company will come to you with a settlement offer.
If you accept the settlement offer and the vehicle is damaged to the point of a total loss, you’ll need to transfer your title to the insurance company at time of payment. They will take possession of your totaled car, and you will receive the total loss car insurance settlement.
When a Car is Totaled, What Does Insurance Pay?
A typical insurance payout for a totaled car will be for its actual cash value. It’s generally determined by factors such as year, make, model and mileage. Simply put, it’s what your car could have been reasonably sold for before the damages.
It’s important to remember that you will need to have carried collision coverage in order to receive a settlement offer for a total loss from an accident you caused. If your vehicle was totaled as a result of vandalism, fire or hitting wildlife, you’ll need comprehensive coverage to receive an offer. Click here to learn more about what car insurance can help cover.
Who Gets the Insurance Check When a Car is Totaled?
Who gets the check when your car is totaled depends on if you owe money on it or not. If you own the car outright, you will receive the check. If not, the check goes to the leasing company or the lender, otherwise known as the lien holder.
If you owe money on the vehicle, you should notify the lending company that your car has been totaled. Typically, lenders will require payment in full for the loss of your car.
If you leased your car, you’re still obligated to pay for the monthly installments on your totaled vehicle. Totaling a leased vehicle doesn’t void the lease contract.
Owing money on a car on the way to the junkyard is not an enviable position to be in. You can protect your investment with Loan/Lease Gap coverage. This coverage pays for the difference between what your car is worth and what you still owe on it. It can help free you from having to make payments on a car you can no longer drive.
New Car Replacement coverage from Plymouth Rock can also give you peace of mind when you have a new vehicle. We will pay the cost of replacement for the same make, model and year of your car, if available, if you experience a total loss as the original owner and your car was two model years old or less at the time of the accident.
Please note you can’t combine Loan/Lease Gap coverage with New Car Replacement coverage.
Still Have Questions About Your Car Insurance?
Deciding what to do after a total loss isn’t always easy. For expert advice on car insurance, you can rely on Plymouth Rock. We offer motorists an array of exclusive discounts for which you may qualify. Contact Plymouth Rock Assurance today to get the coverage you need and service you deserve!