If your vehicle sustains a high level of damage in an accident, your insurance company might want to total your car. Conditions that would lead to them making this decision are either the damage to the vehicle is so bad it cannot be repaired back to its pre-accident condition, state regulations require the insurance company to total the car based on the damage amount, or it is not economically practical to repair the vehicle.
Once your insurance company determines that your vehicle will be totaled, the actual cash value of the vehicle plus any state fees and taxes less any deductible will be paid. If you own the vehicle, you will be paid directly, if there is still a lien on the vehicle, the lienholder will be paid. The insurance company then assumes ownership of the vehicle, they will transfer the title to their name and then sell the vehicle to a salvage buyer. In some states you as the owner can choose to keep the vehicle, and the insurance company would subtract out the salvage price they would receive.
In order for the above process to work as described, you must have the proper auto insurance coverage. Depending on the accident and who is at fault, coverages such as comprehensive, collision, rental reimbursement, and medical payments, can all come into play. This is all covered in the terms of your policy. Work with your insurance agent to determine that you are getting the correct payments for your auto insurance coverage.
If you disagree with the total loss value the insurance company presents to you, you do have recourse. Typically the process involves you going out and getting documentation to show what you believe the vehicle is worth. The insurance company will review the documentation and can use this to adjust their total value. If there is still disagreement, most auto insurance policies describe how the disagreement can be resolved.
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