What Happens If Hail Totals Your Car?
If a hailstorm is so severe that it totals your car, several things may occur, mostly involving your insurance company if you have comprehensive coverage. “Totaled” means that the repair cost exceeds its current market value or a significant portion of the vehicle. Here’s what typically happens:
Assessment by Insurance Adjuster
Firstly, an insurance adjuster will evaluate the damage. They will calculate the car’s repair cost and compare this with the car’s actual cash value (ACV). ACV is determined by considering the car’s make, model, age, mileage, and condition before the damage occurred.
Determining if the Car is a Total Loss
If the repair costs are close to or exceed the ACV, the insurance company will likely declare the car a total loss. The specific threshold varies by state and insurance company, but it’s typically around 70-80% of the car’s value.
Insurance Payout
The insurance company will issue a payout if the car is deemed a total loss. They will pay you the ACV of the car minus your deductible. If your car was worth $15,000 before the hailstorm and you have a $1,000 deductible, you’ll receive a check for $14,000.
Keeping or Relinquishing the Car
You usually have the option to keep the car if you wish, but the payout will be reduced by the vehicle’s salvage value (what the insurance company could have gotten for selling the wrecked car). If you choose to keep it, be aware that the car’s title will be changed to a salvage title, which could greatly reduce its resale value and make it harder to insure.
Buying a New Car
You can then use the insurance payout towards a new vehicle. It’s worth noting that if you’re still paying off a car loan when your car is totaled, the insurance payout will first go towards paying off the remaining balance of your loan.
Dealing with a totaled car can be stressful, but having comprehensive car insurance can significantly ease the financial burden. Report the damage to your insurance company as soon as possible after the event. They will guide you through the steps to process your claim.
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