Auto Insurance – Determining a Total Loss Accident
Being involved in an car accident is a terrible thing. However, determining that the driver’s car is a total loss by the car insurance company usually brings forth feelings of fear and panic. What will happen next? Can the driver buy a new car at this time or maybe it’s time to get a new automobile insurance company?
The main hedache is not the automobile insurance company. What has happened is that the auto insurance company has determined that the cost of repairs is more than the value of the car. It is at this point that the car insurance company declares the car a total loss and will not pay the insured to repair it.
Before talking about how car insurance companies declare a car a total loss, drivers must have a understanding of how auto insurance estimates car repairs.
Automobile Insurance Companies: How They Estimate Repair Costs
Generally speaking, auto insurance companies estimate total cost of auto repairs in one of two ways: at an auto repair shop or through a claims adjuster.
For example, the driver hits a deer and causes damage to the hood and the engine. The car is smoldering and must be parked on the side of the road. The driver must call his or her auto insurance company to file a claim and to have the car towed to an auto repair shop where an estimate will be performed.
But what if the car is parked at the driver’s residence and has received significant damage due to a hailstorm, tornado, fallen tree, or other act of God?
In this case, the auto insurance company may elect to send a claims adjuster to the scene. The claims adjuster will then proceed to verify the loss after the driver calls the auto insurance company and files an insurance claim.
Auto Insurance Companies: How They Determine a Total Loss
The role of the claims adjuster is to inspect the car for damage and estimate the cost for repair. Claims adjusters are highly trained to spot damage on all parts of the car, even underneath.
After inspecting the car, the claims adjuster determines the initial estimate based on parts and labor. The auto insurance company then takes this estimate and executes an automated claims process using proprietary auto insurance industry computer software.
If the auto insurance believes that the car is a total loss due to damage incurred in an accident or act of God, it performs an evaluation of the car to estimate the actual cash value (ACV). If the cost to repair the car falls between 51 to 80 percent of the car’s ACV, the auto insurance company determines that the the car is a total loss.
What To Do After Your Auto Insurance Company Declares Car a Total Loss
After the auto insurance declares the car a total loss, two choices are presented to the driver: receive the actual cash value of the car from the auto insurance company toward the purchase of a new car; or keep the damaged car (if drivable) and pay for auto repairs out of pocket.
In conclusion, an auto insurance company declares a car a total loss when it determines that the cost to repair the car exceeds its actual cash value. While the owner can keep the car (if drivable) with the current auto insurance, the auto insurance company will not pay for repairs.
Source: Jersey Car Cash http://jerseycarcash.com/car/auto-insurance-determining-a-total-loss-accident/
Basically, “Insurance” is the payment of a small predictable amount of money (“premium”) to protect against a larger unpredictable expense (“loss/claim”).This transfers the risk from you to the insurance company for a fee.
On top of that, Doctors, Lawyers and Engineers require insurance in case they make a bad decision or give poor advice. This kind of insurance is expensive, especially in areas like the medical field where professionals are making judgment calls many times a day.
It certainly will be helpful for all those who have problems with auto insurance accident. Very good article.