Does Esurance offer new car replacement insurance?

You can buy a new car after a total loss using your payout from the insurance company if the loss was covered. If you purchased new car replacement insurance, your insurer will provide enough money to buy a similar vehicle.

Without new car replacement, most insurance policies will only pay a totaled car’s ... read full answeractual cash value, which is usually not enough to purchase a similar car again. In some states, your insurer is required to pay for the sales tax, title fees, and/or registration costs for a new vehicle, too.

How to Get a New Car After a Total Loss

1. File an insurance claim

If your car is totaled in an accident, you can file a claim with the at-fault driver’s property damage liability insurance or your own collision insurance.

If the car is totaled by something other than an accident, like vandalism or a natural disaster, you can use your comprehensive insurance. You should also file a police report after the accident and give the information to your insurance company.

2. Negotiate your totaled car payout

When calculating your car’s actual cash value, your insurance company takes several factors into account, including previous damage and the value of similar vehicles. If you think the insurer’s estimate is too low, then make sure you have evidence to support what you think your vehicle was worth.

3. Fill out any necessary paperwork

You need to sign the insurer’s final settlement offer and sign over the car’s title if you own the vehicle outright.

4. Receive the check

Once the settlement has been approved, you should receive your claim check within a few days.

5. Work with your lender or lessor

If your car was leased or financed, you need to communicate with your lender or lessor and put your settlement toward any remaining balance. Depending on your car’s ACV, the settlement may not be enough to cover the entire amount. In that case, you would need to file a claim with your gap insurance, if you have that type of coverage.

6. Purchase a new car

Once you’ve paid off your loan or lease, you can put any remaining funds toward purchasing a new car.

To learn more, check out WalletHub’s guide to totaled cars.

An insurance company determines the value of a totaled car by considering factors such as the vehicle’s make and model, year, and mileage. A vehicle is considered totaled when the cost of repairs approaches or exceeds the car’s actual cash value (ACV), which is what the insurer says the car was worth prior to being damaged. If the insurer declares the vehicle a total loss, they will pay out any insurance claims based on the ACV.... read full answer

Factors That Affect a Car’s Actual Cash Value (ACV)

• Make and model
• Year
• Mileage
• Depreciation
• Accident history
• Mechanical problems
• Wear and tear
• Cosmetic problems
• Local demand for similar vehicles
• Sale prices of comparable vehicles in the area

It’s important to keep in mind that the ACV is not the same as the cost of purchasing a replacement vehicle of the same year, make and model. Vehicles begin to depreciate quickly after they’re driven off the lot, so even if your car is relatively new, the ACV will probably be significantly lower than what you paid for the vehicle in the first place.

If you think your insurer’s ACV calculation is too low, then you should send a counteroffer that includes your justification for why the car was worth more prior to being totaled. This may include an independent appraisal, receipts for any features you added, and prices of comparable vehicles. There are several resources online that you can use to research your car’s value, including NADA Guides and Kelley Blue Book.

To learn more, check out WalletHub’s guide to totaled cars.

If your car is totaled and you still owe money on the loan, the insurance company will pay your lender for the car’s value, and you will be responsible for any remaining balance if the check is less than the loan amount. If you have gap insurance, it will cover the difference between the car’s value and the loan balance. Otherwise, you will need to continue making payments for as long as it takes to bring your loan balance to zero.... read full answer

If your car is totaled and another driver is at-fault, their liability insurance will pay for the car’s value up to their policy limits. If you were at fault, you can file a collision claim. After you receive a settlement from the insurance company, you can determine if you still have a balance left on your loan.

After your lender has gotten the insurance check, you can file a gap insurance claim immediately, assuming you previously purchased coverage and still owe money to your lender. Be sure to follow any instructions in your policy. For instance, some gap insurance policies instruct you to continue making payments to your lender until the claim can be processed.

Unfortunately, your options are limited if you don’t have gap insurance and your total loss check does not cover your loan balance. You can try to negotiate with the insurance company to have them increase their estimate of your car’s value. However, you will need evidence that your car was worth more than the insurer calculated, and there is no guarantee that you will get more money. Otherwise, you are stuck continuing to make payments, though you could try asking your lender for a payment plan.