If you have used your car as collateral for taking out a title loan and if it gets damaged due to an accident, your car is said to be totaled. Under such circumstances, the car is of no use or a “total loss” if it meets certain criteria.
If it is found that the damage that has resulted following the accident is so severe that the car cannot be repaired, the cost that you incur for the repair exceeds the value of the car, and most importantly, if your car meets the criteria that has been laid down by the state government wherein the car is said to be a total loss, then it can be safely said that the car with a title loan is totaled.
How will the insurance company treat your totaled car?
Once it has been declared that you now have a totaled car at your disposal, it is definitely not going to be smooth sailing all the way especially for you. However, if you have a clause in the terms of the contract in the policy that assures you of covering total loss, the insurance carrier is bound to abide by the following norms-
The insurance company will pay after deductibles the ACV or the actual cash value of the car along with taxes and the state fees.
The company will also take ownership of the totaled car and dispose of the vehicle to an interested buyer. Alternatively, if you want to retain the car, you can do so.
How will the value of the totaled car be determined?
When it comes to calculating the value of your car, you will have to be satisfied only after a price is worked out following the comparison of sale prices of vehicles that are in a similar condition and ones that are in your local area of residence.
Aside from that one good point about assessing the value of the car is that the “pre-accident” state of your car will be taken into account. For instance, it will be found how much mileage you could derive from your vehicle prior to the accident. And also, any kind of damage that was not caused by the accident that totaled your car.
Remember, it is not an easy task to get an absolute claim or compensation for your vehicle and even more if it is totaled. However, you can always negotiate with the car insurance company you have been dealing with all this while by taking out a title loan for your car.
What happens if you want to retain the car?
If you want to keep the car, you will receive the actual cash value (ACV) excluding the deductible and the fair salvage amount. Some states require that you get a salvage certificate. Getting a salvage certificate will treat your “total loss car” as-
Hard to sell
A total loss
Also, you will not be able to get another payment for total loss in case the car gets damaged again.
Who is entitled to receive the payment for a total loss vehicle?
It depends on the terms that you are enjoying in the policy. For instance, if you own the car, you are entitled to receive the payment. If it is a leased vehicle, the company that you have leased the car to will get the payment. And if it is written in your insurance policy that the financing company owns the title, the payment will be received by the financing company.
It is always a wise move to invest or buy a gap insurance so that in case you have “unpaid balances”, the same will be covered by your vehicle insurance carrier.
