When Auto Body Shops Deem Your Vehicle a Total Loss

October 21, 2022 12:00 am Published by Leave your thoughts

Are you asking, “How to tell if my vehicle is totaled?” Maybe you’ve just gotten into an accident and, as a result, you believe your car is totaled but are unsure. Accidents are unpredictable, but they come with the risk of driving. If your car is considered “totaled,” it means that it can no longer be driven, nor can it be repaired. Read on to find out what happens when an auto body shop claims your vehicle is a total loss.

Auto Body Shop Deeming Car a Total Loss

The first thing you need to know is that if the cost to repair your vehicle is 70% or more of the actual cash value, your car will be considered totaled. As far as the actual cash value, your insurance company must put those numbers in. While an auto body shop can determine whether your vehicle is totaled, the final determination is up to the insurance company to make. Auto body shops may be able to tell you if your vehicle is repairable or not. However, the insurance company will be the one to calculate the actual cash value of your vehicle and make that final decision. If you are asking, "Can auto body shops fix my totaled vehicle?" the answer is "no."

If your car is deemed a total loss by your insurance company, and you still owe money on the vehicle, you will be responsible for the remaining balance. Your insurance company will calculate the actual cash value of your car and come up with a payoff amount for you. If you owe anything on your vehicle, the lien holder, which is the bank, will be the one who receives the payment. If, after the calculations are done and the amount is short, you will be given that amount.

The bad news is that it can be a nightmare if you owe more on your vehicle than what your insurance pays you. As a vehicle owner, you will be liable for the amount owed on the car if it is more than the total loss value. This is the type of situation that occurs when people purchase vehicles that are too expensive or if the payments are very cheap. If you ever get into an accident and you are found not liable, you can still owe money.

The best thing to do to ensure you never get into this situation is to obtain GAP insurance. This policy can be added to your normal insurance plan when you purchase your car. This usually helps those who owe more than the car is worth.  

How an Insurance Company Dictates a Total Loss

Once your insurance company has deemed your vehicle a total loss, the value has nothing to do with the repair costs and what your vehicle is worth.

Insurance companies use one formula to make this determination: the replacement cost of the car minus the repair cost minus the salvage value. Insurance companies obtain information that is extremely precise when it comes to cars that are comparable to yours and their value. The formula is easy most of the time, leaving very little room for any adjustments to be made.

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