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The Car of Your Dreams Totaled, Now What?

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Car accidents are quite common nowadays – especially with the unprecedented rise-and-rise of the number of vehicles on the road. While minor car accidents are unexceptional, every once in a while a driver can find themselves in a pretty serious car crash. In such a case, you might be left wondering whether or not the car is totaled and what happens if you decide to file an official claim. 
Well, here is a quick overview of that. 

What is a Totaled Car?

In simple layman’s language, a totaled car is one that is deemed totally irreparable or that the cost of the repair would easily exceed its worth in the first place. In other words, it wouldn’t make any economic sense to attempt to repair it with the intention of reselling it or getting it back on the road. It’s a total loss – totaled. Once you have filed an insurance claim, it is customary for the insurer to inspect the damaged vehicle in a bid to determine the estimated repair costs. At times, the repair estimates don’t have to exceed the car’s current market value for them to be written off. In some US States, for instance, a car can be deemed a total loss if the damage is more than 75% of its current market value. Image result for The Car of Your Dreams Totaled, Now What?
Speaking of value, the car’s worth is often determined via an array of factors including the mileage, age, condition, and resale value of the vehicle just before the accident. 

What are Your Options if the Car of Your Dreams is Considered Totaled?

As expected, it is advisable to file a claim for the car’s actual cash value from the insurer. After this, your insurer will most probably send a payment of the value of the claim after they have conducted their own preliminary investigation to determine the cause and evidence of liability from the accident. If you had purchased the car in fully in cash, this payment will be made straight to your nominated bank account after the claim is processed. 

On the other hand, if you were still financing the car, the responsible auto insurance company will cut a check for both your lender and you based on a pre-determined agreement. Having said that, going by the legal advice from The Levin Firm, you will have to meet your lender and come to an agreement on how you will pay the remainder of the money owed to them. 

Settling the Balance

It is possible that you might still owe your lender a little more than the insurance company offered to pay. And this is especially if it is a high-end luxury car worth tens of thousands of dollars but with a reputation of depreciating fast. In such a scenario, you will be held responsible for settling the remainder of the balance on the car within an agreed stipulated time. 

Nonetheless, it is still worth noting that if you had applied for ‘gap coverage’ on your specified insurance policy, it can kick in at this juncture and settle the difference between the worth of your damaged car and what you still owe the bank.

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