Simply Explaining Insurance #78- Total Loss

Let’s say that you were involved in an auto accident and your vehicle sustained a substantial amount of damage. To repair that damage, it would cost more than the vehicle is worth. What are your options.

You have 2 options. Your first option is to give the car to the insurance company. They will salvage it and they will pay you actual cash value for your car. Actual cash value is determined by a third party vendor who does a thorough assessment of the vehicle gives a value for your car.

Your second option is to keep the car. The insurance company will give you a percentage (% varies by state) of the actual cash value of the vehicle. If you choose this option, the title of the vehicle will change to a salvaged title. A vehicle with a salvaged title can be more expensive to insure and the vehicle can be worth less than the same vehicle with a clean title.