What to do After a Total Loss

If your vehicle has been considered a total loss after an accident, there are several issues you must consider as you begin to look for a new car and reassess your insurance situation. Hopefully, you and your family are healthy and well – and simply finding another car is your biggest worry. But anyone who has auto insurance should be prepared for the event of an accident or total loss. Not only do you need to know your rights, you also should be prepared for the unknown. Here are some factors worth considering if you’re currently dealing with a total loss or are looking to understand the world of auto insurance:

• Understand your existing auto insurance policy: Whenever you take out a policy, be sure to read through the policy and ask questions before taking it out. You may want to discuss “what if” situations with your insurance agent so you are completely comfortable with the policy. This is also one of the reasons it’s so wise to seek out several competitive quotes before taking out a policy – you can compare and contrast each carrier and policy and determine which one is best for you.
• Find out your rights under your state’s insurance laws: Each state has different regulations related to vehicles that are categorized as a total loss. You may or may not want to keep your car – and the regulations related to your insurance, your vehicle and whether your vehicle will be given a salvage title can vary from state to state.
• Determine your vehicle’s value: You will need to work with your insurance company to determine the current value of your vehicle. Keep in mind that the pre-accident value of the car is extremely important. Your insurance company will take into account factors such as car registration, taxes and replacement costs when it gives you a cash value price for your car. You may have some negotiation power at this state. Don’t be shy about doing your own research to figure out what you believe your car’s pre-accident value to be. You are your best advocate at this stage.
• Decision time: There are pros and cons to keeping your vehicle at this stage, and you are the only person who can decide. You may have a vehicle with a salvage title – which can mean it’s extremely difficult to sell at a later date. You also may be given so little for replacement vehicle costs that it’s not worth it to you to find a new car and, possibly, take out an auto loan. Whatever you decide, take the time to think about it. Go shopping for replacement cars and figure out what your actual out-of-pocket expenses will be (if any). You may want to write down pros and cons on a sheet of paper.