- The insurance company will calculate the ACV of your car before the accident, considering its condition, age, mileage, and market value.
2. Compare the repair cost with the ACV:
- If the estimated cost of repairs exceeds the ACV, it's considered a "total loss."
3. Total loss scenarios:
a) You owe money: If the outstanding loan or lease balance is higher than the ACV, you're responsible for paying the difference to settle the loan.
b) Insurance covers the ACV: If the ACV covers or exceeds the loan balance, the insurance company will pay the ACV to you or the lienholder.
4. Salvage rights:
a) Retaining salvage: You may choose to keep the salvage of your car. The insurance company will deduct the salvage value from the ACV to determine the amount paid.
b) Selling salvage: You can also choose to sell the salvage to the insurance company or a licensed salvage dealer for additional money.
5. Rental reimbursement:
a) Coverage availability: Check if your car insurance policy includes rental reimbursement coverage, which may provide funds for a temporary rental car.
b) Length of coverage: The duration of rental reimbursement coverage varies, so familiarize yourself with your policy's specific terms.
6. Total loss settlement options:
a) Actual cash value (ACV) payment: The insurance company may offer you the ACV of your car as a lump-sum payment minus any outstanding loan balance.
b) Replacement vehicle: In some cases, your policy may offer a "replacement vehicle" option where the insurance company helps you acquire a similar vehicle.
7. Policy review and options:
a) Evaluate your coverage: Review your insurance policy to understand the specific terms and conditions for total losses.
b) Optional coverages: Consider adding optional coverages that might provide additional protection or benefits in the event of a total loss.
Remember that the specific process and outcomes can vary depending on the insurance company and the individual circumstances of the accident. It's important to thoroughly review your insurance policy, reach out to your insurance adjuster for clarification, and consult with legal or financial professionals if you have any doubts or questions.
