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Accidents can happen at any time. One minute you're cruising down the Central Expressway through Plano and the next, someone crashes into the side of your car out of nowhere. Or maybe your car was the unexpected victim of severe weather conditions, such as hail or a tornado. Whatever the case may be, there are times when your car might get so damaged that it's not worth it to have it repaired. When this happens, your insurance company might declare that your car is totaled, beginning the process of replacing your vehicle.
Understanding Vehicle Total Loss
If you've been fortunate enough to avoid totaling a car, you might have no idea what happens in such an event. At Huffines Chrysler Dodge Jeep Ram (CDJR) Plano, we want to help clear up some misconceptions and guide you through the process to make it as stress-free as possible.
Definition of a Totaled Car: Clarifying Misconceptions
You might have an image in mind of what a totaled car looks like. You most likely envision a mangled vehicle that looks like it just experienced a devastating event. However, you might be surprised to learn that a car can be considered totaled even if it's still drivable. A car is considered totaled if the cost to repair it is more than or even equal to its value. When this happens, many insurance companies will pay you the car's actual cash value instead of paying for the repairs.
Quick Facts: Key Considerations for Totaled Cars
Insurance companies will look at several factors before determining whether your car is totaled. The first factor they might consider is the vehicle's age. If the car is older, it has a lower value than a brand-new vehicle, which means that it's more likely that the cost of repairs won't be worth it. Another important factor is the number of miles on the car. If the vehicle has already racked up hundreds of thousands of miles, it'll have a lower value than a car with low mileage.
Insurance companies will also look at the significance of the damage. How many points of impact were there? Will just one portion of the car be repaired, or were multiple areas affected? Was the damage superficial, or will extensive work need to be done? Were the airbags deployed? The answers to these questions will help determine how much it will cost to repair the vehicle. If the repair costs end up being more than the car is worth, the insurance company will likely decide the vehicle is totaled.
Calculation Criteria: How Insurers Determine Total Loss
In Texas, the total loss value is calculated based on the fair market value of your vehicle. Insurance companies will usually look at several sources, including the National Automotive Dealers Association and Kelley Blue Book guides, to determine the fair market value of your car right before the crash. Each state sets a total loss threshold to determine if the vehicle is considered totaled. Some states have a lower threshold, such as 60%, meaning that if repair costs are 60% or more than the fair market value, the car can be considered totaled.
Texas' total loss threshold is 100%, so if the repair costs match or exceed the car's actual cash value, the vehicle is considered a total loss.
The Importance of GAP Insurance: Should You Consider It?
If you still owe money on your car's loan and that value is larger than the payoff you receive for your totaled vehicle, you'll still be responsible for paying it off. This is where guaranteed auto protection (GAP) insurance can play an important role. GAP insurance covers the difference between the amount you owe on your loan or lease and what the insurance company will pay for your totaled car. You'd want to consider a GAP insurance if you put a small down payment on your vehicle loan or if you chose a long loan term.
Strategies After Your Car Gets Totaled
If you find yourself in a situation where your car is totaled, try not to stress about it. There are several steps you can take to make sure the process goes as seamlessly as possible.
Filing an Effective Total Loss Claim: A Step-By-Step Guide
The first step to filing a claim is to contact your insurance company. This step should be completed as soon as possible after your vehicle accident. Most insurance companies allow you to file your claim over the phone or online. Once your claim has been created, an insurance adjuster will take the steps to determine the value of your car and the cost of repairs. They'll contact you if they have any questions during this process. Once their analysis is complete, they'll let you know whether your car is totaled or will be repaired.
Negotiating Your Settlement: Tips for Maximizing Your Claim
If the insurance adjuster decides that your car is totaled, they'll offer you a payout to cover the value of your vehicle. However, this amount can be negotiated if you don't feel the value has been estimated correctly. To maximize your claim, it's best to do your own research to determine the value of your car. You know your car better than anyone, and it's possible that the insurance adjuster overlooked a package or feature included in your vehicle or underestimated the precrash condition.
Keep track of your sources, and if the offer from your insurance company doesn't match your research, be prepared to show why you think your car is worth more. Present all of your research to the insurance adjuster to receive the best possible offer for your totaled car.
Deciding on Your Next Steps
After receiving a payout for a totaled car, you can shop for a new vehicle and use the insurance money for a down payment. Depending on your state's laws, it's possible to keep a totaled car and continue to drive it, or you may want to use the vehicle's parts. However, it's in your best interest to shop for a new vehicle.
At Huffines CDJR Plano, we have a wide selection of brand-new and used vehicles available. We'll be happy to help you shop for your next vehicle if yours has been totaled.
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