When the cost to repair a damaged vehicle exceeds the total value of the car then it is considered to be the totaled car. Every state has its own rule of defining a totaled car according to their requirements.
A write off is processed by the insurance company, when the car is involved in major damage due to which it won’t be able to drive safely on the road. The insurance company pays you the total amount of your car rather than paying you the cost of repairs.
Moreover, it is always important to check the vehicle history report before buying a used car, so that the car may not be involved in a major accident or repairs.
Ways of determining a write off by the insurance companies
The rules for write off by insurance companies differ across different states. The insurance companies may have several formulas for calculating a write off for your vehicle.
Collective loss ratio
This category of car insurance considers the cost of the repair of your car as a percentage of total car value. It formulates the repair costs divided by the total cash value of the car. The company across different states will decide the actual amount of the car write off.
Total loss formula
It considers the car repair costs and the salvage value before proclaiming it a write off. If the total amount of repair cost and salvage value exceeds the car’s actual monetary value, then the car is considered to be the write-off.
Options available to you when the car gets written off
When the car insurance company declares a totaled car to be written off then you either accept their decision or keep your car.
Acceptance of the write-off
If you accept the decision of the insurer regarding the write off for your car, you just have to sign the paperwork and you will receive a check within a few days. However, due to depreciation, the payout may be less than the price of buying a new car.
Keeping the car
For instance, if you don’t want your car to be totaled, then you have two options for it:
- You can use the insurance money for the repairs and can get a salvage title.
- You can claim the challenge to the decision of the insurer to get a better result.
Salvage title and insurance write off
A car is entitled as a salvage vehicle when the insurance company writes off the car as a total loss. In many cases, the insurer sells the car to the salvage yard for the scrap metal. However, the insurer can return you the vehicle, but the amount for the salvage value will be deducted from the check.
It is illegal in most states to drive the salvage vehicle due to a lack of safety precautions. In addition to this, if you repair your car then it may get a salvage title to be legal on the streets. Despite this, it will be difficult to ensure these vehicles, because once the vehicle has been totaled its monetary value is decreased.
Challenging write off
If it is claimed by the insurance company that the car is not worth repairing, then you can challenge the insurance companies decides to claim the better option. For this claim, you must come up with better credentials to consult the insurance company to reassess their decision.
If the insurer still doesn’t repair your car, then you can consult the main head office of the insurance company and get possible assistance for the write off of your totaled vehicle.
Write off for the financed cars
You may experience a gap between the amount offered by the insurer and the owed amount of your car in the condition of financing your car. This is because the insurance factors include depreciation.
For this purpose, you have to come up with the Gap insurance, which pays the financier outstanding amount when the entire loan is not covered by the settlement check for your totaled car.
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