What Do Insurance Companies Consider a Total Loss for an Auto?
Unfortunately, car accidents happen. In some cases, the accident is so damaging to the vehicle that the insurance company identifies the vehicle as totaled. A totaled vehicle means that the cost of the damage exceeds the value of the auto.
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Identifying a Totaled Vehicle
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Insurance companies vary in opinion on what they consider a total loss. Some insurance companies consider a vehicle totaled if the cost to repair it is more than 50 percent of the vehicle's actual value. However, other companies consider it totaled if the damage exceeds 80 percent of the vehicle's actual cash value.
Determining Value
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When evaluating the cost of a totaled vehicle, auto insurance companies do not use the National Association of Automobile Dealers or the Kelley Blue Book to determine what the auto is worth, according to MSN. Each company uses its own unique software for determining the car's value. The insurance company evaluates aspects of the car such as mileage and pre-accident condition when determining value.
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Considerations
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Individuals that wish to be compensated for a totaled vehicle must have adequate insurance. In some cases, neither party has sufficient insurance to pay for the damages. When this is the case, the individual with the totaled vehicle must simply accept the loss.
There are precautions that an individual with a totaled vehicle can take to minimize the stress involved when dealing with a totaled vehicle. According to Edmunds, the first thing a person may want to do is rent the best car that their coverage will allow so that they can get moving again. It's also smart to find out how much the car was worth prior to the accident.
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