What Makes a Car Totaled, and What Happens After?

February 14, 2022 5:42 pm Published by Leave your thoughts

If you want to know what makes a car totaled, the answer is simple: When the cost to repair the vehicle exceeds its value, then it’s considered totaled.

Some states have laws that define what a totaled vehicle is through specific thresholds. For example, it might be that if the damage is more than 75 percent of the car’s value, then it’s totaled. In most cases, the insurer determines what a total loss is.

Read on to find out more about vehicle repair and whether your car is totaled.

What to do if you’ve been in an accident

Let’s start with what you’ll need to do if you’ve been in a car accident. First, contact your insurance agency, and file a claim. Then your insurer will determine if the vehicle is considered a total loss or not based on how much repairs are. If the car is totaled, then the insurer will provide a payment for the car’s actual cash value minus any deductible on your insurance coverage.

How the value of your car is determined

You may be asking what the actual cash value of your vehicle is. Insurers will use several factors to determine the car’s value. This includes its condition, age, number of miles, resale value and more. What makes a car totaled is when the cost to fix the damages exceeds this calculation.

What happens to your loan if the car is totaled?

If you’ve financed a car, you may be wondering what happens to any balance left on the loan. In this case, the insurer will likely make a payment for both you and the lender. This means you’ll have to discuss with the lender about how to release the money. Usually, the lender is reimbursed first and then any remaining money will be paid to you.

In some instances, you may owe your lender more for the car than what the insurance company pays out. Unfortunately, you will be responsible to pay the remaining balance on the loan. For example, if you $10,000 on a loan but the car’s value has depreciated to $8,000 at the time of the crash, you will have to pay $2,000 back to the lender out of pocket.

What if the crash wasn’t your fault?

Let’s say a tree fell and struck your parked car, totaling it. For those with comprehensive coverage, you will be reimbursed for the car’s actual cash value minus any deductible.

If you were in a crash but it was the fault of the other driver, collision coverage would come into play. The insurer may also seek reimbursement from the other driver’s insurer in order to cover any losses.

Are you looking for the leaders in vehicle repair? Then turn to Tom’s Body and Paint, Inc. We’re a full-service auto body repair shop and roadside assistance provider. We offer body and collision repair on all makes and models of vehicles, along with auto paint services and 24-hour towing. Stop by our shop or call us today for a free estimate.

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