What is insurance total loss payout and settlement process for car accidents? | Find out now!
Are you thinking of a total loss claim for your car accident? Don’t worry; we have got you covered. If your car is totaled in an accident, you have full rights for your insurance company to get a complete claim, only if you have the right coverage.
This article will discuss the details of claiming a total loss payout and the settlement process for a car accident.
Primary conditions for filing a total loss payout
It is important to remember that these are primary conditions included in car insurance accident claims. However, these conditions can be altered by the company rules and regulations. These are some of the primary conditions:
- The repair cost of the vehicle is more than the Actual Cash Value (ACV)
- The vehicle damage exceeds a specific pre-accident value, according to the company’s total loss limit
- The car can’t be repaired due to total damage, or the car is unrepairable
In every state, the policies can change as some companies use a total loss limit between 50%-100%.
Some states might use a total loss formula. This means a car is considered totaled if its total repair costs are more than the car’s current market value.
Expected Payout by insurance companies
As discussed before, the total Payout is calculated according to your coverage plan. If you have comprehensive and collision damage, most insurance companies will pay the car’s actual cash value if it is totaled.
If your car is on finance, make sure to get the total Payout for your car, as you might get ripped off. The reason is that the value of your car depreciates over time due to inflation and market competition. In that case, you sign up for gap insurance, as it helps pay off your loan if your car gets totaled and helps you financially.
How to file a total loss car insurance settlement?
This procedure is followed if you have a car insurance policy through Hartford. Follow these steps:
- File your legal claim for loss payout
- Later, the company will send you a claim adjuster to inspect your car damage.
- The company will get in touch with you through email or call about the negotiation of the payment settlement.
- If you negotiate and come to an agreement, you can clean out your car and release it.
- You’ll receive your settlement payout in a given time; it is usually within a week.
What to do after the settlement?
After you have negotiated and agreed to a payment, you still need to remove some of the essential items from your car. Don’t worry. These items are yours and will not affect the Payout.
- Remove your license plates and personal items from your car.
- Leave the original key in the car with the claims adjuster.
- Attach any additional keys if available
- Fill out the required paperwork to avoid any issues later.
- Contact the leasing company if you lease your car and make sure you have gap insurance to get through the process seamlessly.
These steps are essential to keep your process smooth and faster. After a total loss designation, the insurance company will take over the car wherever it is in the state. Your DMV will also get notified that your car has been totaled.
Is it still a total loss if airbags are deployed?
If your car’s airbag deploys during the accident, that does mean that your car is a total loss. This is because your insurance adjuster will calculate the cost of replacing airbags and repairing your vehicle would exceed its cash value.
However, suppose the total repair cost and replacing the airbag is less than the car’s current value. In that case, your vehicle will likely not be declared a total loss payout.
What is Gap Insurance?
Gap insurance will help cover your car’s total loss claim if your car is leased. It can be explained in a way that as you drive a leased car, you don’t own the car. However, as the bank owns the car, the depreciation occurs at the pace of most repayment plans.
This strategy creates a “GAP” between the amount you owe on the vehicle and the car’s actual value. This is where gap insurance comes in. It will help you pay the difference between the remaining loan amount and potential insurance settlement to cover vehicle damage.
How will I be paid for a total loss car?
As discussed before, the Actual Cash Value (ACV), The insurance companies will only pay up to the applicable coverage limits. For example, if the accident is between two drivers and has caused $30000 worth of damage to your car, but they only have a total of $15000 of property damage coverage. Then their insurance company will only pay $15000 to you for repairing cost.
The only legal way to get the remaining $15000 is from your collision coverage (the cost depends on your coverage plan).
Whether you get a partial or full payment from the company, you’ll receive a check from the car insurance company claiming a “property damage settlement,” along with the claim number and other relevant details associated with your car.
What happens if you want to keep your totaled car
If you want to keep your totaled car, the company will add the actual cash value, sales tax, prorated taxes, and miscellaneous fees as well. Then, the insurer will deduct the sale value from the total value of the settlement value.
Moreover, the insurance company must report your totaled car to the official state licensing department by submitting the essential information to their website.
After a total loss claim, how long will insurance pay for my rental car?
Suppose you have rental car reimbursement coverage as part of your auto insurance policy. In that case, your insurer may assist you in covering the costs of a rental car after a total loss. Your specific policy and limits will determine the amount of coverage you receive.
This article discussed the insurance claims for a car total loss payout process. We also discussed how you could file a claim about the loss. I hope you liked this article. Make sure to subscribe to our newsletter for more news and updates.