Car Insurance Settlements

Auto accidents are very stressful events. They can leave a person both physically and emotionally damaged. Vehicle crashes can happen in the blink of an eye when you least expect it. This is where your insurance coverage kicks in. After a crash, you need to focus on car insurance settlements with your insurer.

What adds to the stress is that many automobiles are worth less than the amount owed on the loan—a situation known as being “upside down.”

This typically happens when a new car is purchased for little or no money down and then depreciates rapidly. Let’s say you purchased a vehicle new for $32,000. After 18 months, you totaled the car in a serious crash. The appraised value at the time of the incident is $27,000, but you owe $29,500 on the loan. This leaves a $2,500 gap. You’ll either have to pay this out of pocket or rely on gap insurance to cover the difference.

Get the Most from Your Auto Insurance Settlement

This is why getting a fair auto insurance settlement is so important when your vehicle is financed. You need to get a good estimate for the value of your car so that you can settle for a high dollar amount. People often look at the Kelly Blue Book value. This will give both the retail and wholesale value of most automobiles. Insurers will want to give you the lowest pay-off settlement value. Negotiate for a higher payout to make it easier to pay off your auto loan. Then you can go out and get a new car without having the added stress of settling with the finance company.

Some carriers are trying to attract new clients by offering new car value replacement. This means if you buy a new vehicle and then total it a year later, the insurer will pay for the cost of a new car. This can be helpful after a serious accident, but it comes with conditions. The premiums for this type of policy are a lot higher. It might be better to stick the savings into safe investments and buy a normal policy for less. One insurer that is widely promoting this type of coverage is Liberty Mutual. They are more costly but will replace the full new value of your car if it is totaled.

There are two basic types of coverage to consider. First, collision insurance which covers damage to your vehicle. Second, rental reimbursement coverage, which pays for a rental car while your vehicle is being repaired. This pays for the cost of renting a car while your claim is being processed. This can take a couple of weeks, so this added coverage can be useful.

What to Do After an Accident

Call your insurer right away after an accident. If the automobile is severely damaged, it will be towed away. An inspector from the insurance company will take a look at it and make an assessment. They may take possession of the car, and you will need to sign a waiver form. If the car is totaled, the title will be signed over to the insurer and usually sold for parts. It is important you do not delay this process. If you do, you can be charged extra fees for storage. This can add up to hundreds of dollars a month.

The next thing is getting a rental car. It will probably be 7-10 days before your claim is completely processed, and you will, of course, need a car during this time. You can typically rent a car for up to 30 days, although most claims are resolved well before then.

Reselling Your Salvaged Vehicle
Some people want to keep the totaled vehicle for themselves. There are a few rules you will need to abide by in this case. First, the insurer will estimate how much they would get by selling the automobile at auction. They will then subtract this amount from your auto insurance settlement.

Should You Keep and Repair a Totaled Car?

Almost every state has strict regulations on selling “salvage” vehicles. You can spend thousands repairing your damaged car, only to find out it is worth far less than you expected when you go to sell it. This should be left to professional mechanics who can lower the repair costs and still make a profit. Consider comparing quotes online at GoodtoGoInsurance to ensure you’re getting the best coverage for your needs and budget.