What Happens When a Body Shop Says My Car Is a Total Loss?
No one wants to be in a car accident, but they are part of life and owning a car. Some accidents result in a total loss of the vehicle. According to CCC, the leading insurance data base, last year 22% of accidents resulted in a total loss. A total loss at a body shop adds a few interesting questions to a claim.
Why Did the Body Shop Total my Car?
This is a very common misunderstanding. A body shop cannot determine your car a total loss. A car’s reparability is only determined by your insurance company. A body shop often writes the repair cost that is used in the calculation to repair your car, but they never make the decision.
Can I Keep My car after it’s Determined a Total Loss?
This is between you and your insurance company. However, the answer is usually yes. It is now uncommon for the cars value to an insured to have greater value to the owner than the value calculated. In that situation, the car can be retained and repaired. You will owe the difference between the amount you are paid and the repair cost. Be careful here because this car will now have a salvage title and have a much lower value when resold.
What Happens When I Still Owe Money on a Total Loss?
The short answer is you are responsible for what is owed on the vehicle. The insurance will calculate the value of your vehicle and negotiate a payoff. If there is something owed, the amount will be paid to the bank holding the note. The amount over will be returned to you. The amount short would be owed by you.
What happens if I Owe More on my Car than the Insurance Company pays me?
This is a terrible situation for everyone. The owner of the car is responsible for what is owed on the car greater than the total loss value. This is the risk when you buy a car for too much or have payments that are very inexpensive.
This situation gets even more difficult when you are a claimant and didn’t cause the accident. Yes, you heard me right, you can get in an accident that wasn’t your fault and owe money.
The only way to prevent owing money if when you owe more than your car is worth is GAP insurance. It is an add on to your regular policy and very important if you owe a lot on your car. Discuss this with your agent.
How Does My Insurance Company Determine My Car a Total Loss?
It is very important to understand that when an insurance company determines that your car is totaled, the value is not based on the value of your car minus the repair cost.
The basic formula for a car to be determined a total loss is the cars replacement cost minus the repair cost minus the salvage value. The insurance company has a very accurate database of similar cars sold in your region over the last 90 days. They also get very accurate bids on the salvage value of your vehicle. Sometimes there is a little wiggle room in these claims, but mostly it’s a simple math formula.
If you need any advice about the repair of your auto body repair stop by Collision Pros in Auburn, Chico, Paradise, Red Bluff and Woodland, California.
