Total loss car insurance settlements are determined by the policyholder’s deductible and the car’s actual cash value (ACV), which is what the vehicle was worth immediately before it was damaged. Insurers calculate ACV based on several factors, including a vehicle’s make and model, year, and mileage.
In several states, like California and Florida, a totaled car settlement will also factor in the sales tax on the driver’s new vehicle if they choose to purchase a replacement. Additionally, if the policyholder is filing a comprehensive or collision insurance claim, then their deductible will be subtracted from the ACV for the final settlement.
Factors That Affect a Totaled Car Settlement
- Vehicle make, model, year and mileage
- Previous damage, mechanical problems, or cosmetic issues with the car
- Vehicle depreciation
- Local demand for similar vehicles
- Sale price of comparable vehicles in the area
- Policyholder’s comprehensive or collision deductible
- The sales tax on the driver’s new car (not in all states)
How to Negotiate a Total Loss Car Insurance Settlement
It is possible to negotiate your totaled car insurance settlement if you think that your insurer’s offer is too low. If this is the case, you should send a counteroffer that includes your justification for why your car was worth more prior to being totaled. This can include an independent appraisal, receipts for any features you added, and prices for comparable vehicles.
Once you come to an agreement with the insurance company about your totaled car’s value, the rest of the process is relatively straightforward. If your car is leased or financed, the insurer will first pay your lender or lessor directly. But if you own your vehicle outright, you should receive a check fairly quickly.
How to Get a Totaled Car Settlement
- File a liability, comprehensive, or collision insurance claim.
- Gather documentation related to your vehicle, including your car’s title and sales receipt.
- Research your car’s value using websites like Kelley Blue Book to make sure you’re getting a fair offer.
- Accept the final settlement offer if you agree with it.
- Wait a few days for your check to arrive, if you own your vehicle outright. If your vehicle is leased or financed, your insurer will pay your lender or lessor first.
To learn more, check out WalletHub’s guide to totaled cars.
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