If you have been in an auto accident and if your car is totaled, that means, the repair estimates are more than your car is worth, then the insurance company will likely pay you its actual cash value rather than pay to fix it. Simply we can say that, if your car is irreparable, it is a totaled car or total loss. Also, if your car is stolen, then the insurance company has to pay actual cash value of the car.
Gap insurance is a right type of insurance for a totaled car. Therefore, before buying car insurance, understand important points to get reimbursement when your car gets totaled.
The first thing you need to understand is, how an insurance company determines the value of your car? Claims adjusters from your car insurance company analyze the value of your car using a combination of dealer surveys, value guide books, online pricing sites and actual private party sales. They also look at the factors like sales tax, registration and title costs of a replacement vehicle to determine its value. These factors may vary across companies and states.
The second thing is to find out what an insurance company will do if your car gets totaled? That is to say, when your insurance company owes you for a totaled car. Generally, most insurance companies offers to replace your car with an available and comparable car in your local area. Perhaps, they might offer cash settlement based on the actual cash value of comparable cars in your locality.
The third thing is to understand, what happens when you keep your totaled car? If you want to keep your car even after the car gets totaled then, the insurer offers the actual value of the cash, sales tax and applicable taxes and fees are added together and the insurer deducts the salvage value from the total cash settlement.
If you did not get right amount of reimbursement, it is better to check with your state’s department of insurance for a list of your rights as an insured driver. Thus, according to the condition of your car, get your car repaired or replaced as insurer owes you for a totaled car.