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Is My Vehicle Totaled?

Damaged in heavy car accident vehicles after collision on city street crash site.

Accidents are sometimes unavoidable. When a severe weather event passes across the region, floodwaters engulf your vehicle. A driver strikes your vehicle after being late to pick up their child from daycare and running a stop sign. Then suddenly, your vehicle is totaled. You presumably anticipate your insurance company to pay for the damage if you have auto insurance. Fortunately, if the repairs are less expensive than the automobile is worth, they will. However, the insurer will write off the vehicle as a total loss if repairs are more expensive than its value. The company will then pay you back for the vehicle's ACV, or actual cash value, and not for the total amount of the repairs.

When is a vehicle a total loss?

A vehicle that would cost more to repair than it is worth is typically referred to as a total loss. A vehicle is deemed totaled if its current value is $4,000 and the repair cost is $6,000. Insurance companies typically decline to repair totaled vehicles. The insurance provider will instead compensate you for the actual value of the vehicle. The intention is to provide you with the funds necessary for a new vehicle. You might need to submit an insurance claim for your totaled vehicle if you've been in an accident. If a firm decides that it is more expensive to fix the damage than to purchase a comparable vehicle, it will declare your vehicle to be totaled.

How is a total vehicle loss calculated?

After an accident, you may ask yourself, "How do I know whether my vehicle is totaled?" It is helpful to become familiar with the following terms:

  • Real money value- A claims adjuster will determine the actual cash value of your vehicle. To achieve this, the adjuster assesses factors, including the state of your vehicle, and generates a value estimate based on the model, year, mileage, and vehicle choices.
  • Value of salvage- based on the total cost of the recoverable and marketable parts left over from the collision, including the engine, electronics, tires, seats, and doors. The vehicle is regarded as totaled if the total sum of those goods is less than the vehicle's actual monetary value.
  • Repair costs- What exactly determines whether your vehicle is totaled, then? Usually, the solution is just a few calculations away. The adjuster will estimate your vehicle's repair costs to determine whether they are higher or lower than the vehicle's real cash value. The vehicle is typically considered totaled if the overall repair estimate, after including the salvage value cost, is higher than the vehicle's real cash value.

What takes place after your vehicle is totaled?

Typically, the insurance company will transfer the title of your totaled vehicle into their name and take possession of your vehicle. After that, they may sell it to a buyer of salvage. The salvage value will be subtracted from your settlement amount if you want to keep your vehicle. Check with your claims adjuster to understand what owner-retained total losses imply, as several jurisdictions have special rules.