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Things to remember...
  • If your auto insurance company totals your vehicle, you may receive benefits that can be applied toward the purchase of a new car
  • The decision about totaling a vehicle is made independently
  • If you file a claim, your premium may increase

Many drivers love their vehicle for the first year or two of ownership, but there usually comes a time when drivers want to trade in their vehicle for a newer and more stylish model.

If you have recently been in a car accident, you may be wondering if your insurance company will total out your car.

When a vehicle is totaled, the insurance benefits may be paid first to a lender to pay off any outstanding car loans in place. Any additional benefits can be used by the driver as a down payment for a new car.

This sounds like it would be a convenient way to move forward with your car buying plans. However, you cannot simply ask your insurance company to total out your vehicle. With a closer look at the claims process, you can learn more about what to expect when you file a claim.

Find the best rate for the insurance coverage you need. Enter your zip code above to compare quotes today.

When You File a Claim

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Immediately after you are in an accident, you should notify your insurance company and begin the claims process.

With most providers, you can either submit a claim over the phone or online. With both options, you may need to submit supporting documentation for your claim, such as an accident report from the police and photos you took at the scene.

– Paying Your Deductible

As part of the claims process, you will need to pay your insurance deductible. A common deductible amount is $500, but this may vary slightly.

The deductible is owed with your claim regardless of whether your vehicle is totaled or not.

As you can see, the claims process and the potential to have your vehicle totaled by insurance is not a free process for you to benefit from. If you receive proceeds after your vehicle is totaled, the deductible amount will be subtracted from the proceeds.

– Determining the Cost of Damage to Your Vehicle

A skilled adjuster from your insurance company will then examine the vehicle. He or she will ensure that all damage on the vehicle is related to the specific accident that you filed the claim for.

The adjuster will also estimate the cost of the repairs, and this may be corroborated by one or several quotes from auto service centers.

Keep in mind that this is an independent process, and you cannot simply request that your vehicle is totaled. The cost of repairs must be documented and is not typically open to negotiations or requests.

– Estimating the Car’s Current Replacement Value

A car insurance policy pays benefits up to the limits of the coverage that you purchased, but this amount is also limited by the replacement value of the car.

For example, if your car is worth $10,000 in today’s market, has $12,000 in damages, and has $20,000 in collision coverage, the limiting factor would be the current market value of the vehicle.

Keep in mind that most auto insurance providers will total the vehicle if the cost of repairs approaches the market value. The cost of repairs does not typically need to exceed the vehicle’s market value.

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How to Dispute the Insurance Company’s Decision

There are sometimes instances when the driver does not agree with how a claim was settled. For example, you may think that the estimated repair costs are too high or too low.

This simple factor can play a major role in determining whether a car is totaled out by insurance or not.

If you want to file a dispute about any aspect of the claims process, your best option is to begin by writing a letter to your insurance company and providing supporting documentation to back up your beliefs.

Some claims disputes may easily be resolved through this step, but other matters may escalate. You may agree to dispute the matter in an arbitration hearing.

A third party arbitrator may be used to help you and the insurance company come to an acceptable resolution that both parties can agree on.

Filing a complaint about the claim with your state’s insurance board is another option to consider, but this process may take a lengthy amount of time to resolve.

A final option available to you if you want to dispute your claim settlement is to pursue legal action. You can hire a lawyer who specializes in this area of the law.

The lawyer can try to negotiate or settle the matter out of court, but some legal issues do result in a full trial in front of a jury and judge.

How a Claim Affects Your Insurance Premium

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An insurance claim can cause your insurance premium to increase. In fact, any accident or even traffic citation that you receive can result in a premium increase, and this is because these events can blotch your driving record.

Your driving history is carefully reviewed by your provider each time you renew your car insurance coverage, and a blemished record usually results in higher insurance costs.

– Shopping for Better Rates

Each provider analyzes your driving history differently, and some may be more lenient about accidents and traffic citations than others.

With this in mind, you can see that comparing rate quotes from several providers can help you to save a small fortune on your car insurance premium.

If you have decided to shop for better car insurance rates, begin the process by selecting at least three different car insurance companies to request quotes from.

Ideally, these will be companies that have a solid financial strength and a great reputation with consumers.

Insurance quotes can usually be requested online or by calling the providers during normal business hours, but you can also request quotes through an auto insurance broker.

When you request quotes for new auto insurance, remember that your the following can affect your rates:

  • coverage limits
  • coverage types
  • your deductible amount

Select these with care, and request similar quotes from each provider to make the comparison process easier.

Some drivers want their car to be totaled by insurance, and others may prefer to have their current vehicle repaired after an accident. Regardless of your wishes, this will be an independent decision made by your insurance company after a careful review of the facts.

You can, however, dispute the decision and change providers if you are not happy with how your claim was handled.

Compare car insurance quotes right here by entering your zip code below!

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Here's what you need to know...
  • Find out the trade-in value of your car
  • Consider how much out-of-pocket expense you can afford when buying auto insurance
  • Decide how much coverage you will need to replace or repair your car
  • Compare rates for best deal before making a final decision

When shopping for auto insurance, one of the things you need to know is how much insurance to get. As is the case with any insurance, you need to get enough insurance to cover the value of your car based on how hard it would be to replace.

In other words, insurance is money set aside to cover the damages for loss so that you can get a new one or at least have the damage repaired.

Therefore, it is important to understand what your car is worth at the time you get insurance.

Compare rates to make sure you have the right coverage. Enter your zip code into our FREE price comparison tool to get started!

How to Assess the Value of Your Car

wallet-cash-credit-card-pocket-1600x1600Several places are available to help you assess your car’s value.

These are just meant to be used as a point of references when you need to find out how much your car is worth before you search for auto coverage.

Kelly Blue Book is considered one of the foremost authority sites on figuring out the trade-in value of your car as it is today.

It is based on factors, such as the age of the car, the mileage, the make, model, and year, as well as the color and other vehicle options.

The information from KBB gives you today’s trade-in value that you would likely get if you tried to trade in your car today.

A Test Case

We did this as a test case on this site for a 2004 Pontiac Grand Am (Red) with a sliding sunroof with over 100,000 miles and in good condition. The system told us that the trade-in value would be around $1200.

Remember, if you were in an accident in which you totaled your car, it would take that amount of money to replace it.

However, it may be tough to find a car in the same condition as yours, with the same approximate number of miles, and with the same options.

Therefore, you will want coverage for at least twice as much, in case you need to use the money to purchase a similar vehicle that is worth slightly more than yours

Using our case study, if we needed to replace this Grand Am with another one of similar quality, we would need to carry at least $2000 of collision insurance to be on the safe side, in case we could not find one in the same condition as the one that was lost.

Keeping that in mind, you could compare via yours charts with various insurance coverages and see what totals are offered.

In general, the average amount of collision coverage in most auto policies is around $5000. In our scenario on the Grand Am, this amount would be more than enough to cover a total loss.

About Comprehensive Plans

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Many auto insurance companies offer comprehensive coverage which not only covers the loss in an auto accident but also applies to theft of property if your car is stolen or damaged by an act of God, such as a tornado, hurricane, or hail.

It is usually highly recommended for new cars.

You will want to inquire with your insurance companies to see if it is offered.

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How Insurance Companies Cover Large Collision Amounts

Remember that most accidents will not result in a total loss. Instead, they may require up to $5000 or more to repair.

When you are in an accident where damage is done to your car, after you file a claim, an insurance adjuster will come to your house or place of business and assess the damage.

They will take notes on the specific points of damage, as well as whose fault the accident was attributed to, and they may ask for a police report from the local police who covered the accident.

Once they have all of this information, they will leave and call you a few days later with an assessment of what it will cost to repair it.

Provided that you have ample collision coverage, the adjuster will also assess damages from two other sources such as local car mechanic garages.

Once you come back with these figures, the adjuster will tell you that you must take the lowest estimate. They usually like to err on the low side.

Your Rights

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Remember as a consumer you have a right to have your car repaired to as near new condition as possible. Mechanics and bodywork professionals should not take shortcuts to save money either for themselves or you.

They should use the money from the insurance company to repair your car to as good of condition as possible and rebuild any body work to the same condition as it was before the accident.

If you notice badly-done paint jobs or half-closed trunks after your accident, you have a right to appeal the adjuster’s decision to a lawyer or insurance settlement board.

Once you know the general value of your car, you can keep these figures in mind when shopping for insurance. Look at the other specs first, such as state liability amounts, bodily injury, and property damage.

These cover your costs to others if you are at fault in an accident. But focus on the collision insurance also, so that you know you are getting enough insurance to cover all damages and replacement if needed.

Figuring Deductible Amounts

The question of deductibles often comes up when searching for insurance as well and it is important. You will want to consider how much out-of-pocket expense that you can afford to pay to get your car fixed if you are in an accident.

For a $500 deductible, you would only pay $500 out of your pocket, and the insurance company would pay the rest. For a $1000 deductible, you would pay $1000, for example.

In the case of our Grand Am, with a $1000 deductible, this person would end up paying all of the replacement costs. With the 2016 Honda Civic, it would be a substantial saving if the damages were significant.

The key to finding the best insurance and deductible amounts is to shop around until you see that you have found one that covers your cost of either repair or replacement in the event of an accident, and which does not require you to pay too much of an out-of-pocket expense for the repairs.

Compare rates from different insurance provider for the best rate! Enter you zip code in our comparison tool below to get started!

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Things to Remember...
  • Replacement value tends to pay out smaller claims
  • Full value will pay a higher price for the totaled vehicle
  • Auto insurance companies rely on external sources — two of those sources are Kelly Blue Book and Edmunds.
Having an accident serious enough to total your car is bad enough – worrying about how much your auto insurance company will pay can just make things worse.

Understanding how insurance policies are structured before you purchase one can alleviate this worry and save you a lot of trouble in the case of an accident. Planning ahead will give you a better idea of what to expect when your insurance check arrives.

Although they go by different names, there are only two types of auto insurance policies (as opposed to many types of auto insurance coverage options) you can purchase.

The first one, which is often called replacement value, tends to pay out smaller claims.

The other type of policy, commonly referred to as full value, will pay a higher price for a totaled vehicle. Keep in mind though, that a full value policy will also carry higher premiums.

To begin comparing rates among insurance providers, enter your ZIP code above!

What types of replacement policies are there?

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Think of replacement value as the amount an insurance company needs to pay to provide an exact replica of your current car.

For example, if you drive a 2004 Hyundai, your insurance company would write a check equivalent to what it would cost to purchase the exact same Hyundai in the same condition.

Insurance companies rely on external sources to assess this value — two popular sources are Kelly Blue Book and Edmunds.

Both of these resources are used by the National Auto Dealers Association (NADA) to determine the fair market value of used cars. They consider the production year, average mileage, average wear and tear, and so forth.

What is a full value policy?

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A full value policy is one that pays out enough money to cover your car at its full market value regardless of its Kelly Blue Book or Edmunds price.

A replacement value policy doesn’t take those things into consideration while a full value one does.

If this is confusing, think of it in terms of a 1999 Honda Accord. At 12 years of age, the Kelly blue book value of that car might only be $2,500.

Yet, it may be worth a lot more in real terms if you have cared for it meticulously and installed thousands of dollars worth of customized parts.

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In order to make the best use of a full value policy, it’s extremely important to document everything. At the very least, you should be taking digital photos or videos to prove the condition of the car and the money you’ve invested in it.

Take pictures of any customized parts you’ve purchased. In addition, save all the receipts for any parts purchased, as this can be used to prove the true value of your vehicle

Another way to boost the value of your car is to do a comparison study of similar vehicles sold on the open market. Automotive magazines and websites are a great resource.

If you prepare beforehand, you will be able to prove the value of your car to your insurance company in the case of an accident. By providing more supporting evidence, you are more likely to get a check for the full value of your car.

What if I only have liability insurance?

Unfortunately, a car insurance company will replace a totaled vehicle only if you have purchased collision or comprehensive coverage. If you only have the state mandated minimum liability coverage, a totaled car will be your loss.

That’s why it may be worth purchasing the extra coverage if you have a loan on your vehicle. While if you’re simply driving your parents’ old family sedan, with 150,000 miles on it, it might not be as worth it.

Before you file a claim for a totaled car, you also need to be aware that your insurance rates will go up. For an inexpensive car, it might be better in the long run to pay out of pocket. This will keep your car insurance rates down.

Although it is not the best scenario, with a calculator and the right questions, you can try to maximize your saving.

Don’t wait until you total your car — start comparing auto insurance rates with our FREE tool today!

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Things to remember...
  • Car insurance is required in order to protect yourself in case you are involved in an 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.

Your insurance provider will most likely want you to use its own designated auto repair shop in your area, so check with them before you ask your local mechanic to start work on the car.

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?

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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 might consult dealers or 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?

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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.

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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