Whether you drive to work every day or rarely get behind the wheel, there’s a good chance you’ll eventually be in an auto accident. In 2020, there were more than 5.2 million car crashes reported to police. If you’re in an accident and your car is damaged, your insurer may declare it a total loss.
What is a total-loss vehicle? It’s when the repairs to fix your car would exceed its value or state value thresholds. If that happens, the insurer will send you a check for its current value. But the determined value of your vehicle may not be enough to pay off your existing car loan or buy another car.
Here’s what you should know about total losses after an accident and what you can do to protect yourself.
What is a total loss?
If you’re in a car accident and you have collision coverage, your insurance company may declare your vehicle a total loss. That means the cost of the repairs to your vehicle would be more expensive than the cash value of the vehicle or would be over state total loss thresholds. In some cases, a car may be totaled if the insurance company decides it cannot be safely repaired.
If your car is a total loss vehicle, the insurer will send you a check for the actual cash value at the time of the accident. You can use the check to buy another car or for other expenses.
How do you know if your car is totaled?
When you’re involved in a car accident, you need to contact your auto insurance company right away to start the claims process. Your insurance company will send a claims adjuster to assess the damage and estimate the cost of repairs. If the cost of the