How Does a Total Loss Insurance Claim Work?

After a total loss car accident, dealing with insurance can feel like a nightmare. A better understanding of total loss car insurance claims can help make the process easier and ensure the insurance money owed to you is processed properly and quickly.

What Is Total Loss Insurance?

After a car accident, an insurance adjuster is responsible for investigating the damage done to the car and the circumstances of the accident to determine reimbursement for the policyholder. If either the loss of the car’s value, or the repair costs, exceed the value for which it is insured, the company may declare the vehicle a “total loss”—that is, “totaled.”

The policyholder can then file a total loss car insurance claim, which pays the fair market value of the car. The fair market value of a car or any vehicle, as indicated by carsdirect.com, may compare very poorly to what it would actually cost to replace the vehicle. Even if you were able to find a like make and model of the same vintage of your totaled car, so many factors go into determining overall depreciation, it is unlikely the seller’s value and the money retrieved from your insurance would be identical.

What Is Depreciation?

Depreciation is the loss of value in the marketplace that occurs over time. When it comes to modes of transportation, it doesn’t have to be a lot of time. When you purchase a new vehicle one week, as indicated by this source, the car immediately loses a portion of its value. This is true even if you turn around and attempt to sell it the following week.

When insurers want to determine exactly what a car is worth, they want to put their finger on the original cost of the vehicle minus all the factors that cause it to lose value. These factors would be time, or the age of the car, the number of miles accumulated, and general wear and tear as well as whether it had been in any previous accidents which had been repaired. In the case of the latter, sometimes a frame sustains minute but irrevocable damage.

An option for the insured to consider to protect themselves is to purchase in advance complete car replacement insurance in lieu of fair market value insurance. It costs more to do so, but may be in the consumer’s best interest.

How Do I File a Total Loss Car Insurance Claim?

First, take your car to the repair shop that your insurance company works with. Do a little bit of research on the insurance company’s website to determine their preferred shops, which can help speed up the claims process. If this means taking the car to a shop you personally don’t like, that’s okay—if you expect your car to be considered totaled, the shop won’t be doing repair work on the vehicle anyway.

File your claim as soon as possible. Don’t wait around, because these kinds of claims can take more than a month to be processed in full. Car accidents can be very expensive, and the sooner you file your claim, the sooner the company can start processing paperwork.

Make sure you have your title on hand. Keep it handy so that it is ready to be signed over to the insurance company.

If you still have a loan on the vehicle, figure out how much you owe. In some cases, your auto loan may be greater than the current value of the car. Payoff or gap insuranceon your insurance policy can help with this. Otherwise, you may have to keep making payments after you no longer own the vehicle.

It’s always a good idea to check if your insurance company’s final payout figure is in the typical ballpark for the value of your vehicle. This can help you make sure that you’re not being grossly underpaid based on the calculations they’re using or costs they’re leaving out.

If you disagree with the amount, valuepenguin.com says a policyholder can negotiate with a claims adjuster. To do so, according to the site, the policyholder must submit documentation — modifications made to the car, for example — showing that the car is worth more than the adjuster says it is.

Lastly, make sure you complete and send your paperwork back as quickly as possible to expedite the process.

Was My Total Loss Car Insurance Claim Underpaid?

Some insurance companies may be underpaying policyholders for their total loss car insurance claims. This may be done by undervaluing the car, not including sales tax, or ignoring other fees. Multiple class action lawsuits have been filed against major insurance companies for underpaying these claims.

Should I File a Total Loss Car Insurance Lawsuit?

If a vehicle you owned or leased was totaled while covered by an auto insurance policy in the last five years, it’s possible that you were not fully reimbursed under your policy for the value of the car, including sales tax and other fees.

You may be able to join the growing number of total loss car insurance lawsuits, alleging that insurers underpaid policyholders for their loss.

Filing a lawsuit can seem complicated and overwhelming, but Top Class Actions has done the work of connecting you with an experienced attorney who can help you navigate litigation and maximize your compensation.

Join a Free Total Loss Car Accident Class Action Lawsuit Investigation

If you were insured under an auto insurance policy, experienced a total loss car accident, and were not reimbursed for sales tax and other fees by your insurance company in the last 5 years, you may qualify to join a total loss car accident class action lawsuit investigation.

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