What happens if my vehicle is declared a total loss?
What happens if my vehicle is declared a total loss? Not in all accident cases, the cars involved are declared a total loss. This occurs in one out of every seven crashes. In other words, 12% of the vehicles involved in an accident are “totaled” by insurers.
You don’t have to be driving for your car to be declared a total loss. If a tree falls on it or if it stays submerged for a long time in a flood, your insurance company can total it out.
After whatever incident, you should file a claim with the insurance company. Generally, the company declares a vehicle a total loss when the cost of repair approaches 80% of the current value of the vehicle. It is the insurer’s adjusters who are in charge of appraising the repairs that the car would need.
The next step is for the insurance company to determine the Real Cash Value of the vehicle, which will depend on the model, the date of manufacture, the miles traveled, and its market price. In general, the process ends when the insurance company writes a check for 80% of the actual cash value of the vehicle, less the deductible agreed in the policy.
If you are financing your vehicle, that check will go to your lending company. If you have already paid it, you should have collision and comprehensive insurance before the accident to cover the total loss or the fault of the other driver. What happens if my vehicle is declared a total loss?