When a vehicle in Sellersburg, IN, is involved in a severe accident, the insurance company assesses whether it is "totaled." A car is considered totaled when the repair cost exceeds its value, usually around 70% to 80%, though this varies by state and insurer. In this case, the insurance company decides it’s more economical to declare the car a total loss.
Payout Process for Totaled Vehicles
If your vehicle is declared a total loss, your auto insurance provider will offer a settlement based on the car’s actual cash value (ACV) just before the accident. The ACV is the vehicle’s market value, considering age, condition, mileage, and depreciation factors. The insurer will deduct any applicable deductibles from the payout. If you still owe money on a car loan, the insurance company will first pay the lender, and any remaining balance will go to you. If the payout does not cover the remaining loan balance, gap insurance, if you have it, can help cover the difference.
Keeping a Totaled Vehicle
If you choose to keep the car, the insurance company will pay you the ACV minus the salvage value—the estimated worth of the damaged vehicle. Once you decide to keep the vehicle, it’s often issued a salvage title, and it may be costly and difficult to insure or register it in the future.
Next Steps After a Total Loss
After receiving the settlement, discuss the options with your insurance agent. You can use the funds to purchase a new vehicle or pay off an existing car loan.
CXE Insurance Explains Everything Concerning Insurance
CXE Insurance is here to answer all your insurance questions. We serve Sellersburg, IN, and surrounding cities. Contact us today.