by FreeAdvice staff
In the car insurance world, property damage is defined as damage to your vehicle (car, truck, SUV, etc.). The types of coverage that will pay for damage to your vehicle include collision, comprehensive, and sometimes, depending on the company, uninsured/underinsured motorist.
What You Can Recover
When your car is damaged in an auto accident and you have coverage, your insurance company will either pay for repairs or total your vehicle. When an insurance company totals a vehicle, the vehicle is considered a complete loss and the insured is paid cash value for the vehicle. The actual cash value (ACV) is the cost to replace the vehicle with a vehicle that is of like kind and quality, etc., subtracting an amount that accounts for the totaled vehicles depreciation (age and wear and tear).
While it may seem like your car would have to be a complete wreck, a smoking heap, to be deemed totaled, in fact, this determination is made more on the basis of the cost of repair and the cars worth. A car will be considered totaled if the repair costs exceed a certain percentage of the cars worth. The percentage will differ from company to company, but usually ranges from 51% to 90%.
See How Insurance Companies Calculate Car Accident Settlements for more.
What to Do if You Disagree That Your Car Is Totaled
Once your car is deemed totaled and you are paid actual cash value for it, your car is taken to a salvage yard where it is auctioned off. Then it is usually chopped up for parts. If you love your car, actual cash value may not seem like an equitable deal to you. When you sign a contract with your insurer, it is agreed between the two of you that the insurer will not have to pay out more than the car is actually worth. But the insurer also agrees to make you whole by placing you in the same spot (relatively speaking) as you would have been without the accident.
If you really want to keep your car, you can take the actual cash value from the insurance company, minus deductibles (in your policy) and minus what the insurer would have gotten at the salvage yard. You can then keep your car and make the repairs yourself. If you decide on this route, let the claims adjuster know right away. Once the car has gone to auction, it is much harder to get it back.
What to Do When You Reach an Impasse with Your Car Insurance Adjuster
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