Can you keep your car and get paid for a claim from the insurance company?

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Mathew B. Sims is Editor-in-Chief and has authored, edited, and contributed to several books. He has been working in the insurance industry ensuring content is accurate for consumers who are searching for the best policies and rates...

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance...

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Reviewed byDaniel Walker
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UPDATED: Apr 23, 2020

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It’s all about you. We want to help you make the right coverage choices.

Advertiser Disclosure: We strive to help you make confident insurance decisions. Comparison shopping should be easy. We partner with top insurance providers. This doesn't influence our content. Our opinions are our own.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.

Things to remember...

  • Car insurance is required in order to protect you in case you are involved in an at-fault accident
  • If your car is totaled, your insurance company, the auto shop may submit their bill directly to the company and have them pay it
  • Most people file a claim with their insurance company to recoup the cost of fixing their car and getting it back on the road

The whole point of having car insurance is to be covered in the case of a car accident. Insurance is meant to get your car back up and running so that you can continue on with your daily routine and to pay for the damages you might cause to another party.

Depending on your insurance company, the auto shop may submit their bill directly to the company and have them pay it. Keep in mind that you’ll pay and then get reimbursement from insurance.

At all steps of the repair and claim process, stay informed. Know what your policy covers and doesn’t cover so that there are no unwelcome surprises down the road.

Don’t wait another moment to protect your car. Enter your zip code in the lookup tool below and get free auto insurance quotes without leaving your chair!

What happens if my car is considered totaled by the insurance company?

 

Most people file a claim with their insurance company to recoup the cost of fixing their car and getting it back on the road. If, however, your car is totaled, your insurance company will reimburse you according to what they calculate as fair market value.

This may or may not be enough money to fully replace your car, depending upon factors including:

  • Age
  • Mileage
  • Condition of your vehicle before the accident

What you consider “totaled” and what your insurance company considers “totaled” may not be the same thing. You have an emotional attachment to your car that your insurance provider does not.

Auto insurance companies consider a car “totaled” when the cost of repairing it is more than the cost of replacing it. If this is the case, they will offer you a reimbursement amount based on fair market value as determined by factors such as trade-in value.

It is important to remember that this figure is not necessarily what you paid for the car or the value of it to you.

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How does the insurance company determine the fair market value of my car?

It is an insurance claim adjuster’s job to figure out the value of your car. Once they have concluded that it’s not worth repairing, they’ll determine the amount of your reimbursement check by calculating the fair market value and subtracting your deductible payment from it.

The adjuster will consider authorities such as Kelley’s Blue Book and the NADA guide, and research the price of similar vehicle models up for sale. They will also look through recent sales data to get an understanding of average prices in your area.

They also have access to software tools that help them do cost and price analyses based on data provided by dealers, repair shops, parts manufacturers, and other third party providers.

What if I disagree with my insurance adjuster’s valuation of my car?

 

You can dispute the valuation that the adjuster assigns to your totaled car and the resulting reimbursement check offered to you by the insurance company.

As with anything, you’ll have to make a good case. Read through your insurance policy to determine your rights and your coverage. Most personal auto policies include an ‘appraisal clause’ which stipulates the method of resolving a dispute over the value of a vehicle.

Do the same research that the insurance adjuster does and that you would do if you were shopping for a replacement car.

Nowadays, you can find most, if not all, of the information you’ll need online. Comparison shop on websites such as:

Be sure you’re comparing apples to apples. If your 10-year-old car had 95,000 miles on it and a broken door handle, you can’t reasonably compare it to the one-year-old model with 8,000 miles logged and no cosmetic damage.

Use these sites, as well as the Auto Classifieds section of your local newspaper to see what the retail value of cars similar to yours is in your geographic location. Keep records of your research to use as proof-print out applicable Web data and clip newspaper ads.

As long as you’re realistic and reasonable when you confront your insurance company and have data to back up your claims, you have a good chance at getting your car’s value reappraised.

Whether you purchase a new or used car to replace your totaled one, don’t forget the insurance coverage! Comparison shop different insurance providers by entering your zip code in the box on this page and getting free online auto insurance quotes now.

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