After a motor vehicle accident, you could face vehicle repair costs on top of catastrophic medical bills. When your insurer assesses your vehicle, they may declare it totaled. According to Experian, an insurer who claims a car totaled has declared it a total loss.
The following may help you understand what it means to have a totaled vehicle.
Can you repair your vehicle?
When an insurance company assesses your car after an accident, they will consider the make and model, age, condition, mileage, resale value and any unseen damages. Even if you can technically repair your vehicle, it does not mean that the insurance will pay for it. Totaled does not mean irreparable. It only means that your vehicle’s price would be less than the repair costs. Most insurance companies do not pay for those repairs.
Can you stop payments on your vehicle?
If you still had loan payments on your car, you may still have to pay. While you may receive a claim payout for the car, you may still have to make up the difference. Most cars begin to depreciate as soon as you drive off the lot. If the insurance company totals your car for its current value but the value happens to be less than what you owe, then you still have to pay the difference.
If you have gap insurance, however, you may not have to pay anything. Gap insurance goes on top of your typical auto insurance policy. It pays the difference between your car’s value and your remaining balance.
After an accident, if the sale value of the vehicle happens to be less than the repair cost, your insurer probably will not pay for repairs.