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Total Loss Car Insurance

When a driver is in an auto accident and the vehicle in that accident is deemed beyond repair or worth less than the cost to repair it, the auto insurance company will usually label it a total loss. Most people refer to this as the car being “totaled.”When an auto insurance company declares a car a total loss, the insurance company determines the pre-accident actual cash value of the car. Several factors go into determining this value. An insurance adjuster will look into online pricing sites, value guide books (like the Kelly Blue Book), dealer surveys, and private party sales to determine the actual cash value.Once the value has been determined, the auto insurance company will issue a check for the actual cash value plus the cost of tax and tags to the owner of the car. Keep in mind that the owner of the car is not always the owner of the insurance policy. If the car has been leased or a loan has been taken out to pay for the car, it belongs to the car dealership or the bank. The insurance company will pay the car dealership or the bank first in order to pay off any outstanding debt. If any amount remains, the owner of the insurance policy will get the balance. If however, the insurance holder owns the car outright, the entire amount is given to her. Often a car owner is not happy with the amount the auto insurance company offers to pay for a car declared a total loss. In many cases, the insured opts to do his own evaluation of the actual cash value. If he feels the insurance company is not giving him fair compensation, he will ask for an adjustment and negotiations can occur.One type of insurance offered that can help offset the monetary loss of a vehicle that is owned by a car dealership or a bank is called gap insurance. This insurance will pay the difference if the insurance company declares a vehicle a total loss and pays less than what is owed on a vehicle. To get multiple free quotes on gap insurance, begin by simply entering your zip code in the box above. AutoCarInsurance.org will provide you with 5 to 8 free quotes from different reputable insurance companies.