If you saw accidents that resulted in a car becoming unusable beyond repair, you may hear of the phrase “totaled.”
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Totaled Definition
What does it mean? When is it used?
What is the definition of totaled?
The word “totaled” comes from the insurance term “total loss.” To put it simply, when the cost of repairing a damaged insured property exceeds the actual value of the vehicle, that vehicle is totaled.
Repairing it would cost more than the whole vehicle, so it makes great sense financially and logically not to spend the money for repairing such a vehicle.
Notice: The term “Writing-off” is sometimes used by insurance companies instead of totaled. So, if you hear your car has been “written off,” it means it’s totaled.
What happens if your car is totaled?
A totaled car can be the result of:
- Theft
- Natural Disaster
- Some Kind of Accident
- Etc.
It doesn’t matter how your car got totaled; if it were a covered accident, the insured party would receive a payout from the insurance company, usually referred to as “Cash Value.”
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How “Cash Value” is calculated?
If your vehicle ends up totaled, you will be given the “actual cash value” (informal “ACV”) of now your totaled vehicle. How much your car would cost before it got totaled will be determined by the claim adjuster.
Claim adjusters work for insurance companies, and they will send them to deal with you. Unfortunately, 9 out of 10 times, the payout you will receive falls short of the true cost of replacing the vehicle.
A totaled vehicle is never good news for either the driver or the insurance company.
How can you get a new car after a total loss?
If you have the right kind of insurance coverage, maybe you can actually buy another car. Generally, there are two main car insurance coverage that comes in handy in these situations:
1.Collision coverage:
Collision coverage will cover damages done to your own vehicle if you’re involved in an accident with another car object, or you get into a single-car accident.
If your car is totaled (totaled means the cost of repairs exceeds the value of the vehicle) in an accident, collision coverage will pay the value of your vehicle.
2.Comprehensive coverage:
This insurance will cover the expenses of damages to your own vehicle that is caused by something other than an accident, like vandalism or a natural disaster.
Installing anti-theft and tracking devices can make this coverage more affordable. Still, comprehensive coverage can be costly, and it may not be necessary, especially if your car is easily replaceable.
However, you have to take several steps to get a new car after a total loss:
The first thing you do is file a claim with your insurance company. Then your insurance provider will send an insurance adjuster to look at the damaged vehicle.
The insurance adjuster will determine the actual cash value of your car.
Now, here is when having the right coverage helps. If you have collision or comprehensive coverage in your auto insurance policy, your insurance provider will give you a check for the agreed amount.
You are also referred to as the settlement. With that money, you can finance, lease, or loan a car.
What should you do when you and your insurer disagree on your car’s value?
If you and your insurer can’t settle on a price for your car’s value, and you have an appraisal provision on your auto insurance policy, you have the right to hire an appraiser to speak for you can possibly get you a higher ACV. But it’s not just you; your insurance provider will have the right to hire one too.
What should you do when you and the other person’s insurer disagree on your car’s value?
So, now what if you are not at fault? In such a case, you must go to the other person’s insurance company and come up with an AVC that you both agree with.
Suppose the other person’s insurance company, and you can’t agree on the value of your car; if you have your own collision coverage, you can use it to file a claim with your own insurer, and your insurer will pay you for the loss of your totaled car.
But it doesn’t end there. After your insurer pays you the money, they can pursue the at-fault driver for reimbursement, including any deductible you paid. However, if you don’t have collision coverage, you have the right to seek legal advice.
Can you keep a totaled vehicle?
Yes, you can usually keep your totaled car. But your insurance company will most probably figure out the car’s “salvage” or “junk” value* and they will deduct that amount from what it pays you for the vehicle’s actual cash value.
*Your car’s salvage or junk value is the price of your totaled car if sold to a salvage yard.
The settlement check will be a few hundred dollars less if you decide to keep your totaled car. Usually, salvage yards will pay no more than $1,000.
Notice: When you decide to keep a totaled vehicle, a special kind of title that needs to be obtained by the state’s motor vehicles department. It means you or your insurance company have to do some extra legwork.
