After you have had a serious car accident, your automobile insurance company will determine how much they owe you for repairs. If there is enough damage, your vehicle may be considered “totaled” and the insurance company will issue you a check for the fair market value of your car.
Typically, a car is designated as “totaled” when the cost to repair the damages exceeds about 80% of its fair market value prior to the accident, though this number may vary from company to company. If your expenses to repair the damages are under their limit, the insurance company will pay for the damages
Fair market value is determined by using a combination of the year, make, model, mileage and condition of a car. The accident history and surface damage can also affect the value.
If your car is considered totaled by your insurance company, they will issue you a check in the amount of the fair market value. In the situation where you owe more money on the car than is paid to you, you are still responsible to pay the remainder. However, if you had purchased gap insurance, your gap insurance would cover this difference for you.
You should review the fair market value amount the insurance company offered you to make sure it is correct. You can negotiate this settlement amount with most insurance companies.
Drivers whose vehicles were damaged by another driver have another potential way to cover the difference on what they owe. They may file a third-party claim against the other driver’s insurance company to recover the difference.
Finally, to help you evaluate your options, you can hire an experienced car accident attorney to guide you through and handle the details of the process and ensure you receive the proper compensation.