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Dealing with irreparable auto damage after a collision

  • Corey
  • Oct 14, 2016

Totaling your car is the worst, but the process of claiming through insurance can be just as much of a headache. This is why it is important to assure you have an insurance policy that covers all damages. If you are at fault, you will need collision coverage. If you are not at fault, basic plans should include direct compensation. Before assessing the damage to your vehicle, you should consult with a professional. If you need to file a total loss, a claims adjuster will come to assess your vehicle and determine whether the cost to repair is greater than the actual cash value. Each insurer has its own set of guidelines and in the US, each state writes its own laws on when a vehicle can be claimed as a total loss. In general, the formula is:

Cost of Repair + Salvage Value > Actual Cash Value (ACV)

What to do first?

Gather the documents and items your auto insurer will need to make the claim. Usually this includes: vehicle title, license plate number, and keys to your vehicle. If your vehicle is leased, you will also need to get the lienholder’s contact information as well as the loan account number. Best case scenario, your insurer will deal directly with your lien and send a check directly to them, but in the case you receive the check, it is your responsibility to ensure it is sent to your lien.
After your car has been towed to an auto body shop, make sure to give the shop your auto insurance information. This is so when the claims adjuster comes to inspect your vehicle in order to determine whether or not it needs to be towed to another location, usually the junkyard if it is deemed a total loss.

What do to next

By this point you will be basically done with the irreparable vehicle, but there are more decisions to be made. If you have accepted the ACV your insurer has quoted, you will choose whether or not to keep the vehicle. In the case you decide to keep it, the insurance company will deduct the salvage value of your car from the payout.

Other insurance woes

Unless you have a second vehicle, you will probably need to rent a car while your insurance claim is sorted out. Ask your insurance provider if your policy covers the costs of renting a car.
Another problem to consider is if your payout covers the amount remaining on your loan or lease. In the case it does not, you will be responsible for paying that amount. This is unless you have Guaranteed Auto Protection (GAP) which covers you for the gap between your payout and remaining loan or lease.

It’s best to prepare for the worst

The best way to cope with a bad accident involving a total loss is to proactively understand the process of claiming and having your insurance details readily available. To be best prepared, you can find more information on auto insurance here.

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