Wednesday, June 15, 2022

Can Insurance Company Force You To Total Your Car

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Determine The Current Market Value

How to Fight With Your Insurance Company Over a Totaled Car?

The most recent edition of the National Automobile Dealers Association Handbook helps determine the current market value of a vehicle. The mileage, condition of the body, age, resale value, and any additional parts before it was totaled help determine the Actual Cash Value of your car.

Insurance companies are known to look to external sources to determine the value of a total loss claim. Therefore, it is best to research your cars value using the NADA handbook and consult with a credible Fort Lauderdale auto accident attorney about your claim.

Driving Without Insurance On A Financed Car Is Possible But Very Risky

Every car owner knows that paying for and maintaining a vehicle is expensive. If you are financing a vehicle on a tight budget, you may wonder whether you can drive it without auto insurance, but we dont recommend driving with no insurance on a financed car.

In this article, well explain the insurance requirements that keep you secure in your financed vehicle, and what you can do if you cant afford your insurance premium.

If youre looking for new car insurance, use our tool below or call to compare quotes from the best auto insurance providers.

What Is Actual Cash Value

Your vehicle’s actual cash value is its market value at the time of the accidentnot what you paid for it. Many consumers are surprised at how much a vehicle’s value can go down . A brand new vehicle begins depreciating the moment its driven off the lot.

Typically, a vehicle’s actual cash value is determined by the sale price of the same vehicle in the same geographic area. Online ads and Kelley Blue Book are two ways of figuring out a vehicle’s ACV. Learn more about actual cash value.

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When An Insurance Company Can Total Your Car

Cars are totaled when the cost of repairs exceeds either the vehicle’s pre-crash value or a specific total loss threshold established by the state. For instance, in New York, a car is considered totaled if the cost of repairs is more than 75% of the vehicles actual cash value . Total loss threshold laws account for the fact that damage is often more extensive than it first appears.

Its also important to note that the ACV is not the price you paid for the car. Instead, the ACV is an approximation of the cars worth just before it was damaged, so it factors in things like depreciation and mileage.

You Cannot Cancel Your Policy Until The Renewal Date

Can an insurance company force you to total your car?

You can compare car insurance quotes and shop for insurance at any time and are entitled to a refund of any unused premium. However, insurers do have the right to charge a penalty if you cancel before the expiration date. Nonetheless, it’s quite an easy process if you want to switch car insurance companies.

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What Is A Totaled Car

Can my insurance company force me to total my car?

Yes, your insurance provider can declare your vehicle a total loss after an accident. However, you may have the option to keep the car if you choose to do so.

A totaled vehicle is one that is considered a total loss because its repair costs exceed its fair market value. A car insurance company might also declare a car totaled if would be unsafe to drive it even after the appropriate repairs are made.

While each state sets its own total loss threshold, car insurance companies have the right to choose a lower one. Often, an auto insurance provider will total a car even if the repair costs are less than the actual cash value of the vehicle. They do this because its very difficult to understand the entire extent of the vehicle damage before the repair process begins.

Once your insurance company declares your damaged vehicle totaled, theyll pay you its actual cash value minus your deductible. You can expect the actual cash value to be much less than what you paid for the vehicle, even if its newer. If youve paid extra for new car replacement coverage, youll receive enough compensation to replace your car with a similar one.

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They Dont Work For You

Its easy to assume that the insurance companies are working hard to get to the bottom of an auto accident or to do the right thing. You might even believe that your own insurance company has an obligation to represent your best interests.

Unfortunately, they dont and they wont.

Insurance companies are for-profit corporations. Their biggest concern, above all else, is their bottom line. They would rather pad their own pockets than yours. And at the end of the day, they care more about their shareholders than you.

That doesnt mean insurance companies dont have any obligations at all. They do. Specifically, they must abide by:

  • The terms of the relevant insurance policy
  • Applicable state and federal law
  • Any promises theyve made you
  • Their duty of good faith

But dont make the mistake of confusing those obligations with a duty to work toward your best benefit. Thats the kind of duty you can expect from an attorney but insurance companies never act as your agent.

This rule cuts both ways too. Neither your insurance company nor the other drivers insurance companies are working for you.

And at the end of the day, if the claims adjustors assigned to your case can find any way to pay you less money or no money theyll take it in a heartbeat.

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What You Need To Know About Your Insurance If Your Car Is Totaled

You got into an accident and your car is totaled. This can be surprising news for many drivers after a car accident. Even seemingly minor accidents can result in a total loss insurance determination by your insurer and be considered a write-off.

Although collisions have declined over the last 20 years, car write-offs after an accident are fairly common in Canada. Its estimated that 17% of physical damage claims result in a vehicle being deemed totaled by insurance companies.

Here we will discuss what happens in these situations, how the value is determined and common questions about what happens when your vehicle has been totaled.

I Use My Vehicle For My Primary Or Second Job Will My Claim Be Paid If I Am In An Accident

Car Insurance Total Loss Negotiation How to Get the Best Auto Insurance Rate

Personal cars used for business, like for delivering pizza and ride sharing arent covered under a personal auto policy. You should always tell your agent or insurance company about your plans to start driving for a ride share company as you will likely need excess coverage for when your vehicle is being used for business purposes.

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Total Warfare: What To Do When Your Auto Insurer Totals Your Car

Your car suffered major damage in an accident. Now what? Do you buy a new one? Do you have it repaired? In most cases, thats a decision that will be made by your car insurance company. If you disagree, you can try to work out a deal to pay for repairs. If you cant agree, you can fight your insurer but get yourself familiar with the claims process first.

If the cost of repairing your vehicle exceeds a certain percentage of your cars value before the accident, insurance companies will declare it a total loss. Some car insurance companies will total a vehicle if damages are at or above 51% its pre-accident value. Other insurers will total at 80%. State insurance departments often set guidelines for the percentage at which cars can be totaled.

More specifically, your insurer will weigh the cost of repairs plus reimbursement expenses for a rental car against the cars actual cash value.

For example, your insurance company may declare your 15-year-old Buick a total loss if it suffers minor damage because the cars value is already low and repairs are expensive. At the same time, major damage to a brand-new Lexus might not make it a total loss. Auto insurance claims adjusters usually determine a cars actual cash value by using their companys proprietary database of values.

A car generally is considered to be a total loss when the estimated cost of repair plus the salvage value equals or exceeds its actual cash value.

Key Takeaways

Keep The Car And Don’t Fix It

Similar to the option above, you may want to simply keep the car if it is safe to drive, and accept whatever cosmetic damage has deemed it a total loss. This is common with scratches, paint damage or severe dents, such as from hail damage. This also may good option if the payout from the insurance company isnt enough for a replacement car.

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How To File A Complaint Against The Insurance Company

If negotiations arent going well, you have options. If you have a complaint about an insurance company and the way they are handling your claim, you may call or write the Consumer Insurance Information Division of the North Carolina Department of Insurance.

The toll-free telephone number is:855-408-1212

What Insurance Companies Wont Tell You After A Car Accident

Can Insurance Company Force You To Total Your Car

We all know what their commercials say: theyre like a good neighbor, theyre there when you need them, theyre on your side.

But the truth is that insurance companies are not on your side.

As a matter of fact, theres a lot they wont tell you things you need to know.

Below, we present seven truths you should keep in mind when dealing with insurance carriers after submitting a claim for car crash compensation.

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The Texas Total Loss Statute

Most states, including Texas, have laws on the books that require special titles for damaged vehicles. The purpose of these statutes is to protect purchasers of used vehicles by giving them notice, on the face of the vehicle title, that the vehicle has previously sustained damage in crashes, floods, or other damaging incidents.

The Texas Transportation Code defines two levels of vehicle damage requiring a special title:

  • A salvage motor vehicle is one for which the cost of repairing damage exceeds the actual cash value of the vehicle immediately before the damage occurred. The law requires a salvage title for a vehicle with this level of damage.
  • A nonrepairable motor vehicle is one to which the damage is so severe that its only value derives from its use as scrap or for spare parts. The law requires a nonrepairable vehicle title for a vehicle with this level of damage.

Trying To Negotiate For More Point : Repair Versus Total

If you believe that your car cannot be adequately repaired, there is typically some room to negotiate. This is tied directly to fair market value that number is driving everything that comes after. It may be difficult to get an insurance company to change its mind here, but it is worth trying if you believe you will not be left with a safe, functional, reliable vehicle after repairs are completed. Pursuing a diminished value claim may put you over the top.

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What Happens If You Keep Your Totaled Car

If you keep your car after the actual cash value, sales tax and applicable prorated taxes and fees are added together, the insurer deducts the salvage value from the total amount of the settlement. The insurer must report your totaled auto to the Washington state Department of Licensing .

If you have questions about what happens next with your totaled car, contact the:

We Are Cancelling Your Policy And Not Giving You Any Notice

Will the Insurance Company Total Out My Car? – Georgia Accident Attorney | Murphy Law Firm, LLC

Required notice will vary by state but your insurer must give you written notice of a cancellation or non-renewal and the reason why. For instance, Texas requires 10 days’ notice, while Massachusetts gives you 20 days. If you feel the cancellation is based on inaccurate information, you have the right to appeal.

If you experience a cancellation, look for a new policy immediately

“A lapse of just one day can result in a penalty, and a lapse will typically cause your rates to go up,” says Penny Gusner, consumer analyst with Insure.com.

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Do I Have To Accept The Insurer’s Offer On A Totaled Vehicle

No. You can always negotiate after you hear back from your adjuster.

The best route to success in this area is to do your research. Find out what comparable cars are selling for in your area. You can also ask how to recoup the sales tax costs, title and registration on the replacement vehicle.

In addition, you can collect the cost of sales tax, title and registration in 34 states.

When An Insurer Decides Your Car Is Totaled

Insure.com also explains that ultimately, whether your car is considered totaled after an accident is up to your insurance company. They typically determine that a vehicle is a total loss when the repair costs for damages are at least 51 percent of the car’s total value before the accident, though some insurers will extend that limit to 80 percent. The percentage is largely decided by state insurance regulators, so it can vary based on your location.

Imagine that you got into an accident. Say the vehicle is 12 years old and has already been hit hard with depreciation so it’s not all that valuable to begin with. When a car’s value is already low, even some fixable minor damage can get it qualified as a total loss by your insurer. Or, imagine that you drive a brand-new luxury SUV and you get in an accident that incurs major damage that makes the vehicle undrivable. Should the damage not exceed a certain percentage of the car’s large value, it won’t be classified as a total loss.

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Frequently Asked Questions About Auto Insurance Claims

When you have an automobile accident, you count on your auto insurer to handle your claim properly, fairly, and with as little inconvenience to you as possible. As a policyholder, you can help the insurance company handle your claim by providing accurate information when you buy your policy, and in collecting information about how an automobile accident happened. If you give false information to your insurer about how the accident happened, or when, your claim may be denied.

Does Insurance Cover If You Damage Your Own Car

4 Easy Facts About Can An Insurance Company Force You To Total Your Car ...

You can make an insurance claim for damage you caused to your own car if you have collision and/or comprehensive coverage. If you have a liability-only car insurance policy, however, damage that you do to your own car wont be covered. Also, even if you have full coverage, insurance wont pay for your own negligence.

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Can Insurance Companies Force You To Total Your Car

Your insurance company may declare your car a total loss after an accident, but you have the option of keeping the car if you choose. The amount you get from the insurance claim is limited. Insurance wont pay you more than the actual cash value of your car, and that may not be enough to repair your car. You also need to consider the cost of a replacement vehicle while your car is being repaired. Depending on your policy, you may be limited if you choose to keep a total loss vehicle.

Most companies will ditch the car for auction. If you let your auto insurer take the car and send it to auction, you can recoup your car at salvage value. This will impact the general use of your car. Until its certified with certain repairs, you wont be able to register or drive it on roads.

Hire A Car Accident Lawyer

If all else fails, you may want to hire a lawyer and sue the car insurance company. Before you go this route, however, make sure it makes financial sense. Think about how much youre willing to pay and what youd get out of your investment. You might find that youll actually lose money if you seek legal representation after youre forced to total your car.

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How Can You Appeal A Total Loss Claim

First, you should contact your insurance company to follow the right procedures and avenues to get your appeal heard by the right people. You wont get a fair settlement just by talking to a call center agent. Even if you can convince your adjuster, they may need to get approval from another party.

Second, know that your car insurance company is obligated to pay out your vehicles actual cash value based on your agreed-upon policy coverage.

Here are other settlement tips to remember as you negotiate your total loss claim:

  • If youre fighting a low-ball offer, it could be considered unethical practices in your state. Some places protect policyholders from being forced to take substantially low total loss settlement amounts
  • If you feel youve been forced into an appraisal, your car insurance company could be violating good faith agreements between itself and its client
  • Your car insurance company cannot withhold any benefits from you or delay payments
  • Dont forget to confirm your agreement in writing
  • If you want to understand more about the damage, you can also call repair shops
  • These tips lead to the general idea that auto insurers must be fair the determination of the value of your car.

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