Learn what happens after your car is declared a “total loss.”
After a car accident, your vehicle might be deemed damaged beyond repair. This is when your insurance agent calls you to inform you that your car is a total loss. But what does this mean for you and what should you expect next? Here’s what you need to know.
Paying Your Deductible
If the other driver is found at fault for the accident, then their insurance should handle the total loss settlement. However, if their carrier doesn’t step up or if you are at fault, you will need to pay your insurance deductible. Keep in mind that you can only expect assistance from your insurance provider if you have collision coverage. If you only have liability coverage, you can’t expect a total loss payout from your insurer.
Once your vehicle is declared a total loss, you’ll essentially sign over ownership of your car to your insurance company so they can settle the claim. In return, you will receive the settlement that you are entitled to. You will want to keep your insurance coverage on your vehicle until it is officially signed over to your insurer.
Your car’s actual cash value (ACV) is the amount, minus any deductible and fees that your insurer will pay to cover the total loss settlement. If you own your vehicle, you will receive this payment. However, if you lease or finance your car, the leasing or financing company will receive the settlement. Keep in mind that the settlement might be more or less than what you owe on your car. If it is more, you will receive the leftover money. If it’s not enough, you will be on the hook for the differential.
This is what you should expect after your car is declared a total loss. Do you have more questions regarding what your auto insurance does in this scenario? Then do not hesitate to contact the team at Gant Insurance Agency in McKinney, Texas. Our dedicated professionals rea ready t assist you with all your insurance needs today.