A vehicle is declared “total loss” when the repair costs are greater than the actual value of the vehicle. This can happen due to a collision with another vehicle or property such as a house. It can also happen because of bad weather or natural disaster, hitting a large animal such as deer during deer season. In fact, according to State Farm, a car insurance company, between July 2018 and June 2019, 1 out of every 116 drivers hand an insurance claim from hitting an animal.
Since on average, vehicles depreciate more than 20% in the first year, and 10% every additional year, your insurance company will have to calculate what you vehicle is worth at the time it gets totaled. A total loss claim typically takes more time to close since it involves many steps and paperwork, so how can you ensure your get your insurance money fast?
First, report the total loss accident asap
A total loss auto accident can take 30 days to finalize, so it’s crucial that you report it fast. Your insurance company will have to run your vehicle’s make, model, mileage, and condition in order to get its market value and demand in your local market.
For example, a compact car may get a higher price value in a metropolitan city versus a rural area. There’s also the salvage value of your vehicle to consider, which is the resale of the parts and metals. When the car’s salvage value plus repairs exceed its cash value, then you have a total loss claim on your hands.
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Second, tow to a preferred auto repair shop
Most insurance companies have mechanic shops they like to deal with, and have them listed as preferred vendors. Since they’ve been vetted, and your auto insurance company has already worked with them in the past, the claims process is more likely to close faster. These preferred auto repair shops will probably also hold your vehicle without charging you a storage fee.
Third, make sure you’ve got paperwork
You should have your vehicle’s title in hand, because if your car’s a total loss then you’ll have to sign the title over to your insurance company. If your lost your title, or if it was stolen or damaged, you can contact etags for a duplicate title or go to your local DMV and file for a lost title.
Fourth, do a little research
It’s always a good idea to find out the value of your car so you can ensure your insurance company is in the right ballpark. Remember, total loss claims aren’t paid out based on your car loan or what you owe, money back is paid on actual value of vehicle at time of loss. The Kelly Blue Book can help with finding out the value of your car.
If you have a car loan, you’ll also need to sign a power of attorney document to transfer ownership to the insurance company once it’s paid off.
Finally, get paid
If you own your vehicle, you’ll get the settlement money. But if there’s a lienholder such as a bank or credit union, they’ll get the money. Of course, if funds are leftover, you’ll get the money. Don’t forget, all payments are made after your deductible is paid.