Here’s what to expect after your car is declared a total loss.
After an accident, your car might be damaged to the point that it is uneconomical to repair. Simply put, the repair may cost more than the vehicle is worth. If this is the case, your insurer will call you once they inspect the vehicle to report that it is a total loss. Not sure what to expect after your car is deemed a total loss? Here are some of the steps that will follow.
If You Decide to Keep Your Car
You have the right to retain your vehicle in most cases after the insurance company determines it is a total loss (depends on policy language and if the vehicle is financed or leased). If you do keep the vehicle, the insurance company will deduct the salvage value of the vehicle from the settlement. This is the value of the vehicle post-accident in its unrepaired state. If your vehicle is 8 (eight) years or newer, the title would have to be branded as Salvage and go through the NY State inspection process. This is an extensive inspection process so be sure to research the process thoroughly prior to making this decision.
If you do not keep your vehicle, you will essentially be signing ownership of your car over to your insurance carrier so they can dispose of the salvage. In return, you will receive the settlement to which you are entitled. In New York, the vehicle is settled based on the Actual Cash Value (ACV) determined by one of several methods allowed by NY State Regulations. Your insurance company will determine the value and present a report to you on how they derived the ACV. You need to review this thoroughly to ensure your vehicle is described properly, including year, make, model, options, packages, dealer add-ons, or improvements you may have completed are considered.
When do you start to look for a replacement vehicle?
As soon as you receive information that your vehicle may be a total loss, you should start the search for your replacement vehicle. Although you may have to wait for the settlement to actually purchase a replacement vehicle, the search might be extensive and take some time to locate that perfect vehicle you would like to buy. Typically, if you have rental coverage, an insurance company will limit the amount of time they will cover for the rental vehicle when your vehicle is a total loss, so the quicker you start the process of replacing your vehicle the better off you will be. It may help to secure your financing options with your local bank once you know you will need to replace your vehicle to help expedite this process.
Getting Your Settlement
In New York State, you should have possession of your title and, if applicable the lien release. Locate these immediately when you are notified the vehicle is a total loss. Your insurance company will need these documents to issue the settlement to the owner if the vehicle is free of any liens. If you are financing or leasing your car, the settlement will go to your leasing or financing company. Keep in mind that the settlement might be for more or less than what you owe on your car. If it’s more, you will receive the difference. If it’s less, you will have to pay the remaining amount unless you have GAP insurance. Some insurance companies offer it, or you may have purchased it through the dealer when you bought your vehicle.
This is what you should expect after your car is declared a total loss. Do you have more questions regarding your auto insurance? Then contact the insurance experts at Scautub Agency in Scotia, New York. Our team is ready to assist you with all your coverage needs.