Can an insurance company force you to total your car?

The short answer is Yes.  

After any accident, some of the best car insurance companies can declare your car a total loss, but you have the option to keep it if you so choose. Since state laws govern when vehicles must be totaled, an insurance provider may compel you to complete your vehicle. Your only choice is to negotiate the car’s value with your insurer, as getting the insurer to change the value will affect whether the car must be totaled under state law. 

The best car insurance companies can declare your car a total loss, also known as “totaled,” if it is badly damaged in an accident. This commonly occurs when the car’s damage will cost more to repair than the car is worth or more than a certain percentage of the car’s value. Complete damage will be protected if you have extensive accident coverage on your cheap auto insurance, and you will be paid the vehicle’s real cash value. If the best car insurance companies report your car totaled and you disagree, you’ll need a lot of proof to show that your car is worth more than what your insurer agreed. Negotiating with some of the best car insurance companies, finding your appraiser, and working through a lawyer are all possible options. 

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When is a car considered to be totaled? 

In general, a car is considered a complete loss because repairing it would cost more than it was worth before the damage. When you make a claim, the insurance will take into account the value of your car and the estimated repair costs. Your insurer will consider the vehicle a complete loss if the repair costs surpass a certain amount of the car’s value. 

Some states may have a total-loss threshold, which is a certain amount below which the vehicle must be considered a total loss (so your insurer may be required to declare totaled due to state laws).  

When the best car insurance company decides that your vehicle is a complete loss, you’ll be paying the car’s real cash value, less any deductible your policy stipulates. The best car insurance companies measure the car’s actual cash value using industry formulas, so it would almost certainly be less than what you paid for it, even though it’s still fresh. You’ll be paid enough to replace your vehicle with a similar make and model if you have an optional insurance add-on called a new car replacement policy. 

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If the totaled car isn’t made into scrap, it usually goes to a salvage yard, where its title is changed to a salvage title, designating it as a damaged vehicle. 

It’s possible to contest the ACV if you disagree with your insurer’s estimate of your car’s worth. If some of the best car insurance companies wants to total your car, but you don’t agree, follow the steps below. 

You’ll need facts, such as recent images of your car, proof that it was well-maintained, and data on what cars of the same make and model sold for in your city if you’re claiming that your vehicle was worth more than what your insurance company determined. You may want to get your car appraised separately by a repair shop and then show the valuation to your insurance company. The independent assessment can assist you in demonstrating that your vehicle is worth more than what your insurance provider is paying. As a result, they may increase the compensation offer. 

You still have the choice of hiring a lawyer and bringing the insurer to court, but before you do, think about how much you’re prepared to spend to challenge the insurance company’s estimate of the car’s damages because even talking with a lawyer can be costly. 

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When a car is found to be a complete loss, you must sign it over to your insurer, who will sell it for scrap or send it to a salvage yard.  

However, you will be able to retain your car and attempt to restore it yourself in some situations, but it will also have a salvage title, which means you won’t be able to drive or insure it until the title is rebuilt. 

If you want to maintain salvage or keep your car after it’s been declared a complete loss, you’ll still be paying the ACV, but the insurer can deduct both the premium and the salvage amount. If you bought the car with the help of a car loan and are still paying it off, you’ll need to check with your lienholder on what to do with the totaled vehicle. 

If you’re looking to buy a new vehicle, you may want to keep a totaled car. Some dealerships will let you trade-in your totaled vehicle (depending on the extent of the damage and the dealership’s policies). You would want to hire an appraiser to ensure that the dealership gives you the best price for your totaled vehicle.If you plan to drive your totaled car around, it would not be safe to do so. After a car receives a salvage title, it must be restored and inspected by the state before the title can be deemed rebuilt. Even then, most insurance firms would not cover a rebuilt title car, so think about all of these things before driving your totaled car around. 

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If you are involved in a severe accident, and the cost of repairs reaches a certain amount of the car’s value, the insurance policy will deem it a complete loss. If you have extensive accident coverage, the insurance will reimburse you for the vehicle’s ACV and take custody of the vehicle. 

And if you total a leased vehicle, you must finish making the lease payments. Your lessor may have needed you to purchase gap insurance, a form of policy that covers the remainder of your lease if your vehicle is totaled. Different states can have different thresholds for what constitutes a totaled vehicle. When it comes to reporting a complete loss, even the best car insurance companies must obey state laws, but they can still do so according to their own rules.