What Exactly Is Total Loss Car Insurance?

A total loss cover car insurance offers comprehensive coverage and protects you even if your car gets damaged beyond repair. A vehicle is considered a total loss if it cannot be repaired or if the cost to repair is greater than the Actual Cash Value (ACV) of the car.

Total loss cover car insurance includes comprehensive coverage as well as collision coverage. It also means that the insurance provider will pay for a new car if your car is totaled.

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Factors That Affect Total Loss Car Insurance Premiums

Rates may increase if you live in areas with heavy traffic and numerous accidents.

Places which witness unexpected weather changes such as hurricanes, floods, hail, etc.

If you reside at places with regular incidents of vandalism and even vehicle theft, your rates increase.

When Is a Damaged Car Considered a Total Loss?

Your vehicle can be declared a total loss if,

It is not safer to repair your car.
The repairing work costs more than the worth of your car.
Insurer is required to declare the car a total loss due to the severity of the damage, as per the law.
Total Loss Formula used by a few states: The cost of repairs + the value of the car should be equal to or exceed the pre-accident value of the vehicle.

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How Does Total Loss Car Insurance Work When You Are Not at Fault?

In many situations, total loss does not result out of primary driver’s fault.

A tree fell down on your parked vehicle
Your car can be totalled due to accident caused by another driver. In this case collision coverage will creep in first.
Your insurance company will ask other driver’s insurer to cover the loss, in this situation.
In the above-mentioned situation, you can also be reimbursed for the deductible from your insurance payout.

Know the Car Insurance Total Loss Process Before Applying

We can help you to evaluate existing condition of your car and also give you an estimate of its worth with the guidance of our experienced claim adjuster.

If the resale value of the metal as well as parts of car does not exceed its actual cash value, the vehicle is considered totalled. This is known as salvage value.

When the repairing costs combined with salvage value exceed actual cash value of your car, your vehicle will be considered totalled.

Insurance Company Buys a New Car if You Have Total Loss Car Insurance?

Insurers may replace a vehicle, which is less than three months old, with a new car.
Also, some insurers provide guaranteed replacement coverage. They may cover a new car.
Moreover, your insurer may pay you actual cash value when you do not have guaranteed replacement coverage.
Remember, insurers are not required to pay off loan of the insured. Their role is limited only to the worth of your car.

FAQS On Car Insurance Total Loss Coverage

Discover If Your Insurer Will Get You A New Car Or Give You The Actual Cash Value.

The actual cash value of car, minus your deductible, is what will be paid. You can then buy a new car after your total loss car insurance settlement is received.

Yes. Some insurance companies allow the same. But, you need to approach an experienced insurance agent to learn how to go about it. Notable, you may have to pay out-of-pocket costs in this situation.

1. Find vehicle’s title.

2. Arrange contact information for a lease or finance company.

3. Get all your personal belongings out of your vehicle.

Well, this is determined based on the state where you reside. It is advisable to seek help of an assigned adjuster to make yourself well-versed with the rules for total loss vehicles.

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