Getting in a car accident can be one of the most traumatic things to experience. But this trauma might extend to your daily life and wallet if your car gets severely damaged in the accident. If you take long trips on the freeway often, you are more likely to be in a car accident that can render your car damaged beyond recognition.
What should you do if your car is totaled in a road accident? Is there a way your auto insurance company can help you in this situation? What are the policies that you need to buy to get reimbursed if your car is damaged to such an extent? Everything will be described in detail in this article. Let’s get started.
What is a Totaled Car?
Before we get into the crux of the article, let’s understand what the definition of a “totaled car” is. It is usually the auto insurance companies that label a car as “totaled”. The term “totaled” car comes from a “total loss” car.
A car is considered totaled if the cost of repairing the car exceeds the actual cash value of the car. This is usually the case, but some states or car insurance companies might consider a car’s total loss of the cost of fixing it exceeds 75% of the actual cash value of the car.
Actual Cash Value: If you’re looking into the details of car insurance policies, you’d find the term “actual cash value” used quite often. “Actual cash value” is the amount of money you’d receive if you sold your car. It is not the price of the car you bought at. Actual cash value takes into account multiple things such as depreciation, condition, relevance, the popularity of the particular car model, resale value, etc.
Take Indiana as an example. In this state, if you get in a car accident and your car gets severely damaged, the auto insurance company will deem your car a total loss if the cost of repairs exceeds 75% of its value. The auto insurance rates are also very high in this state, so if you are looking for great policies at low prices, look for the best and cheapest auto insurance in Indiana.
What to Do if Your Car is Totaled
If your car is totaled, driving it (if you can) can get you in trouble. Some states have strict rules regarding driving totaled cars. If your car gets totaled, you can either sell it for metal parts and other materials that can be salvaged or if you have the right auto insurance policy, you can get the actual cash value of the car. Let’s look at all the auto insurance policies that will reimburse you if your car is totaled.
Auto Insurance Policies Needed
Collision Damage Waiver
A collision damage waiver is a policy that covers the cost of repairs to your car needed after a road accident. If, while driving, you collide with another car, a tree, light pole, a wall, or anything, collision coverage will pay for the repairs needed. Collision coverage will also cover damages due to bad road conditions.
If you get in a car accident and the cost of repairs is more than the actual cash value of the car (or 75% of its value, depending on the state or company), the collision coverage policy will reimburse you. You’ll get the current value of the car, and if you feel the price is too low, you can contact your auto insurer and negotiate a higher payout. After the payment is done, the insurance company will own the car.
Another policy that will reimburse you if your car is completely damaged is comprehensive. But what makes it different from collision coverage? Comprehensive coverage does not cover any damages that might occur while the car is being driven.
So picture this; if you just have comprehensive coverage and your car gets in a severe collision with a tree, totaling it, comprehensive coverage cannot be claimed in this situation as it is specifically for damages that occur while your car is parked. This is the reason why this policy is also called “parked car” insurance.
Imagine if your car is parked and some large projectile falls on it, totaling it. Or a hurricane damages it beyond repairs. In all such conditions, you can claim your comprehensive coverage and get the actual cash value of the car.
Comprehensive coverage covers damages due to natural calamities including fires, earthquakes, hurricanes, floods, etc. It also covers theft, riots, animal damage, vandalism, etc. Any damage that might occur to your car while it is parked will be covered under this policy.
Something to Consider
If you get in an accident that totals your car, or if you notice that your car has been stolen, it is important that you contact the police as soon as possible, reports the incident to them, and get an official police report ready, and then contact your insurance company.
To avoid false claims and insurance fraud, auto insurance companies are very careful in analyzing all claims. If an official police report is missing, your claim might take a long time to process or even get rejected. Follow all the procedures carefully to ensure a smoother and faster claim process.
The insurance agent will ask you a few questions that could feel a little bit accusatory. But this is all done to ensure that the claim is legitimate. Bear with the questions, answer everything truthfully, give all the facts, and all of this would ensure a quicker and faster claim processing. Totaled car claims usually take a bit more time to process because of the verification process. Just stick to the procedure and you won’t have to wait too long.