What Are Your Options After Your Car is Totaled?

After your car is in an accident or damaged for any reason, your insurance company may total it. You're already upset, and now you can't drive your car. What should you do next? 

What Does "Totaled" Mean?

Repairing a damaged vehicle could cost more than the vehicle is worth. In this case, your insurance company may not pay for the repairs. Instead, it will declare your vehicle a "total loss".

To determine whether or not they'll repair the car, some insurance companies require for damages to exceed 51 percent of the car's pre-accident value. Other companies set the threshold at 80 percent. Your insurance company will also add the cost of repairs and the cost of a rental car and compare that total to your car's cash value as they decide if repairs are worthwhile. 

What Happens to Your Vehicle After It's Totaled?

Once your car is totaled, you'll receive a check for the vehicle's actual cash value minus the auto insurance deductible you owe. Your vehicle is then transported to a salvage yard where it's auctioned and typically chopped into parts. Your insurance company keeps any profit made from your vehicle's salvage.

Can You Keep Your Car?

Maybe you're completely attached to your car and don't want to total it. You can insist on keeping the car and then pay for the repairs yourself. The insurance company will subtract the deductible and salvage yard payout from your car's actual cash value. You need to make sure the insurance company and adjustor know that you want to keep your vehicle as soon as possible, though, because once it's totaled, you'll have a tough time retrieving it from salvage. The vehicle must also pass inspection before it can be insured again. 

What if You Disagree With the Assigned Value? 

The insurance company uses several factors to determine your auto's value, including its mileage, special equipment and pre-accident condition. If you disagree with that value, you can hire an independent appraiser to perform an inspection of your car and put the results in writing. If you are still unable to come to an agreement about your car's value, contact your state's department of insurance. A consumer representative will investigate the case and mediate. If these steps do not work and you still think you deserve more money, pursue arbitration or litigation. Decide first if your vehicle is valuable enough to pursue the cost of legal action. 

Getting your vehicle totaled is no fun, but you do have options. Know what they are as you figure out what to do next. Make sure you have adequate auto insurance, too, as you protect yourself and your investment. 

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