Getting in a car accident can lead to many headaches dealing with the insurance company. These headaches are compounded when the insurance company says that your car is totaled. When a car is totaled, that means that you can no longer drive your car and they will not fix your vehicle.
If your car is totaled, the only way you will receive any money is if you have comprehensive or collision coverage, or are the victim of an accident that is not your fault. If you are at fault in the accident and only have liability coverage, you are out of luck and won’t receive one penny for your car.
When an Insurance Company Totals a Car
An insurance company totals a car when it costs less for them to give you the value of your car than it would fix the car. Sometimes this means a car that is totally salvageable is deemed “worthless” by the insurance company. The car probably won’t be scrapped. Someone will purchase the salvaged car, refinish it, and resell it. Unfortunately, this means that the original owner of the car usually won’t get that car back.
How Much the Insurance Company Gives for a Totaled Car
An insurance company will give you the actual cash value for your car. This is typically the NADA book value of your car. They do not give you the retail value. They do not consider how much you owe on your car, except if you have special gap insurance coverage.
This is where hiring car accident lawyers can help you in increasing the claim amount that you get for your vehicle. With their expertise, your lawyer is capable of handling the insurance company as they represent you in the court or while dealing with the insurance company’s representative.
Who is the Check Made Out to?
If you owe money on your car, the insurance company will make the check for your car out to you and your lender. This means that the lender must endorse your check before you can have any of the proceeds. The lender will take any of the proceeds to pay off your loan, and give you the balance. If you owe more than the car is worth, you won’t receive one penny of the proceeds.
What Next?
After your car is totaled, you can try to negotiate with the insurance company if you don’t feel your car is really totaled. If that doesn’t work, you will have to purchase a new car. Keep in mind that you may not have any money for a down payment. Although this may not feel fair, remember that if you are injured in a car accident that is not your fault, you are likely to receive a payment for “pain and suffering” that should help you get back on your feet. However, this won’t come until after you are done with medical treatments and are back to work.
If your car is totaled, you will have to purchase a new vehicle. It’s unfortunate, but you aren’t alone. If you cannot afford to purchase a new car, look for a reliable used car. Always check a vehicle history report before committing to purchase a car.
