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Getting into a car accident, no matter how minor, is terrifying. But when the extent and consequences of a fender bender lead to a ‘totaled’ car, your sense of dread is bound to increase, especially if you are still dealing with a car that is no longer roadworthy. Here’s a closer look at what happens if you still have money for a totalitarian car.
I Totaled My Car And Still Owe Money
Sometimes it is clear that the car is full and not repaired. However, some car damage caused in an accident can be misleading. It may not look bad, but if critical parts are damaged and the repair costs are too high based on the total value of the car, your insurance company will take your car out of stock. If the repairs exceed your car’s market value, you’ll need a new ride, says Kelley Blue Book author Jennifer Brozic.
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“You can also be declared a total loss if the vehicle is unsafe, even if you repair it. If the insurance company repossesses your vehicle, they will pay you the actual cash value (ACV). The actual cash value is what it was. It’s worth it before the loss.”, he adds.
If you finance your car with a loan and still owe the loan when your car is totaled, unfortunately your loan is still valid and must be paid in full. Your insurance company will pay your claim, and that amount must be split between you and your creditor, with your creditor getting the first share of the payout, according to AllState.com. If the insurance payment is not enough to pay off your loan, you will have to come up with the money yourself.
“For example, say you owe $15,000 on your car loan, but the value of your car has been depreciated to $13,000 when added up. If you have collision coverage, your insurance company will pay the actual cash value of your car, in this case $13,000. You must pay that amount to your lender, plus the remaining $2,000 out of pocket,” AllState.com reports.
The only way you can avoid out-of-pocket costs is to invest in GAP insurance when you finance your car, Brozic notes.
How Do Car Insurance Companies Calculate Total Loss Value?
This is an opportunity to keep your entire car, but it will cost you some money. “Insurers usually auction entire cars to car dealers or scrap yards for parts. So if you decide to total the car, the insurance company will deduct the residual value from your insurance policy,” says David Landers, writer for NOLO.com.
If you can repair your car, you will most likely need to apply for a salvage title, but be warned that this will increase your insurance rates. Selling a car with a salvage title is also difficult, he warns. “Think carefully about whether keeping the entire car is worth the cost and potential headaches,” he added.
Dealing with the consequences of a total car accident can be overwhelming, so don’t hesitate to seek advice from an attorney who specializes in car accidents, Landers suggests.
By working with your insurance company, lender and car accident attorney, you can determine the time remaining and cost of your overall car loan.
What’s A Totaled Car Or Total Loss Vehicle?
The information in this article was obtained from various sources not affiliated with Adirondack Bank. Although we believe it to be reliable and accurate, we cannot guarantee the accuracy or reliability of the information. Adirondack Bank is not responsible for and does not endorse or endorse, implicitly or indirectly, the information provided or the content of any third party site that may be hyperlinked from this page. This information is not intended to replace the manufacturer’s manuals, instructions or information or the advice of a qualified professional, or to affect the coverage of any applicable insurance policy. These suggestions are not a complete list of all loss control measures. Adirondack Bank makes no guarantees as to the results of the use of this information.
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A total machine can ask many questions. When you are in an accident, you may not know if your car is beyond repair. If your car is a total loss, you want to be sure that you handle the situation properly and receive the compensation you are entitled to. Here’s what you need to know about what to do if your car is involved with our Tampa car accident lawyers.
If your car has been involved in an accident, you should carefully review the insurance company’s settlement offer. The insurance company must provide you with the fair market value of your car, within the limits of your insurance policy. You can compete for the amount the insurance company will offer if your car is involved in an accident.
Metairie La Car Accident Lawyer
What you should do if your vehicle is involved in an accident includes speaking to an experienced attorney to see if you are entitled to a legal claim for damages from the party responsible for the accident.
When your car is insured, the insurance company will pay you the market value of the car before the accident. If there is a deductible on your insurance policy, the insurance company will deduct the amount of the deductible from the fair market value they pay you for the entire vehicle.
Usually the owner does not keep the entire car. If you really want to keep the car, the insurance company will reduce your lump sum payment by the amount you could have found for it at a salvage company.
If your car is totaled and you still owe money, you will need to continue making your car payments. If you need to buy another car, you can convert your debt into a new loan. You should receive compensation from the insurance company for the fair market value of the vehicle before the accident. With the payment you receive, you can pay off all or part of your car loan.
What Happens If Your Vehicle Is Totaled? |
Yes, you still have to pay for the entire car. However, there may be ways you can manage your finances and purchase a new car. You can use your total car insurance premiums to pay off your total car debt.
Additionally, you can appeal the amount you receive from the insurance company if you believe it does not fairly represent your loss. When you get a new car, the financing company may allow you to convert your debt into a new loan.
A total loss claim takes three weeks. The body shop must inspect the vehicle and prepare a repair report for the insurance company. The insurance company must review the document, determine the fair market value of the vehicle, and make a decision to declare the vehicle a total loss. Processing a total loss claim takes several weeks and should be completed within approximately three weeks.
Yes, you can keep your car if it is a total loss. However, the insurance company will reduce your payment by the amount they think they can get the car to the salvage yard. Most people don’t keep a car once it’s totaled. As a rule, it makes no financial sense to keep the car. It can even be difficult to get the car back on the road. However, if you want to keep your car after it is paid off, you can make an arrangement with the body shop and your insurance company.
A Guide To Dealing With A Totaled Car’s Insurance In Canada
For total fault vehicles, you should check your state law to determine if you can file a claim with the other driver’s insurance company. For states without auto insurance systems, you may need to meet certain personal injury thresholds to also file a claim for your total vehicle.
In car accident states, you can file your claim through the other party’s insurance company or through your own insurance company. In all states, you can sue the insurance company if the insurance company that is legally required to cover the claim does not offer you a fair rate.
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