While driving to work you failed to see traffic stopped ahead and you plowed into the car in front of you, causing significant damages to your car, not to mention the other car. After speaking with your insurance company, the adjuster comes to inspect the damages and says, “Your vehicle is a total loss.” Now, what does that really mean? Nobody likes to hear those words and many people don’t know what to do when dealing with a total loss claim.
What Dictates a Total Loss?
When a vehicle is deemed a “total loss” it means that the cost of repairs exceeds the value of the car or when the damages to your car are equal to a certain percentage (typically 70-80%) or greater than the ACV (actual cash value) of the car. Let’s say that your car is valued at 12,000 and the estimated cost to repair the car is 10,000. This would typically be labeled as a total loss. If you have ever experienced losing your vehicle due to a total loss, you know it is stressful; however, there are some things you should know when dealing with a total loss claim.
Key Considerations Regarding Total Loss Claims
Know Your Lienholder (if there is one)- If you are leasing a car or a financial institution has loaned you money to purchase the car, there is a lien. If your auto is totaled, the lienholder has an insurable interest and is listed on the title. What this means is when the settlement is complete and the check issued, the lienholder’s name will be on the check for what is owed to them. In a total loss situation, the lienholder will provide the “Letter of Guarantee” which pinpoints the current payoff amount.
Know the Location of Your Title- If you own the car and there is no lien, then know the location of this document. If your car is totaled, you will need it to conclude the claim. Keep it in a safe location so that if needed, you have easy access and can proceed forward with a prompt, efficient settlement.
Maintain Records- Keep documentation of your vehicle’s history. For example, keep all the service records, insurance proof, lienholder information, and anything else that is applicable to your specific car. Having this documentation will help the total loss process move more smoothly.
Notify Your Local Independent Insurance Agent- Let’s say you make that final car payment, and the car is officially yours. You now have the title in hand. Don’t forget to secure a lien release which states the financial institution no longer has an “insurable interest” in your car. Once in hand, you should provide a copy to your agent so your insurance company can then remove the lienholder from the auto policy. If you fail to do so and your car is involved in an accident, that lienholder is still showing on the policy and the check will still be made to the lienholder and you, as the policyholder.
We Are Here for All Your Auto Insurance Needs
Knowing this information won’t completely take the stress out of this type of claim settlement, but it can help to move the process along more promptly and efficiently.
If you have any questions or concerns regarding a total loss, please contact our offices at Cameron Insurance Group and we will be glad to assist you. We are here for all your N.Y auto insurance needs. Don’t wait! Call us TODAY at 845-627-2130.