Keeping A Vehicle After The Insurer Declares It A Total Loss
Sometimes an auto insurance company declares a car a total loss after an accident because the cost of repairs is too high compared with its value. The situation for the policyholder becomes complicated if he or she wants to keep the automobile and get it repaired. If the vehicle is still safe to drive or mechanics can fix it, this is a possibility. The policyholder may need to work closely with the insurance agent to maximize the amount of compensation.
The Standard Practice
The standard practice in these cases is for the insurer to issue a check to the policyholder for the vehicle's value before it was so seriously damaged. The amount is decided using the company's standard guidelines.
Claims adjusters could review the value of similar automobiles in the policyholder's zip code. They might rely on the Kelley Blue Book guide. They also could combine the two figures and use the average.
Normally, the company then has the automobile picked up and sells it for the salvage value. If the policyholder wants to keep the car, however, the insurer typically pays the policyholder the actual value minus the salvage amount.
Appealing the Compensation Amount
Customers who are unhappy with the final amount usually have the option to appeal. The insurance agent can handle this process. Insurance companies can be surprisingly cooperative with appeals. They don't want to lose customers or harm their reputation. They also don't want to risk a lawsuit and the negative publicity that entails.
Rebuilt Titles
In some instances, a car is declared a total loss even though it is still safe to drive. A totaled car might only have cosmetic damage, for example. An older automobile with a low actual value could be a total loss just with a bent frame.
This is another complicating factor since insurers must report the information to the state's department of motor vehicles. The DMV does not allow these cars to be on the road again until a new title has been issued. Usually, this is a rebuilt title provided after repair work is completed. This requirement ensures that potential future buyers are made aware of the vehicle's history.
Concluding Thoughts
If the owner can afford the repair costs that are above and beyond compensation from the insurance company, getting it fixed may be a reasonable plan. Working with the agent to maximize compensation may lead to a bigger check.
If you have questions about keeping a vehicle after it's declared a total loss, contact an insurance provider such as Reinhardt's Insurance Agency for more information.
