As we all know, collisions are something we never want to experience as drivers. Also, the damages sustained from them can be so great that you have a “totaled” vehicle, deemed by your insurance company. However, have you ever wondered what goes into making these decisions by your insurance? Let us explain it to you.
Well let’s start first with your insurance policy and its terms and conditions. By nature, your car insurance policy is an agreement between you, the insured vehicle owner, and the car insurer. It stipulates the obligations, terms and conditions under which your vehicle is covered. It’s within these policy terms that an insurer discloses the guidelines for whether or not a car is totaled or written off by them. In turn, they will use professionals to calculate the value of such loss or damage.
After an accident or other vehicle damage, your insurance company will send a qualified assessor to determine the damages of your car. This assessor (also known as an adjuster) calculates the damage of your vehicle in monetary terms and this assessment is then compared with the actual value of the vehicle. Should it cost more to repair the vehicle to an acceptable and roadworthy condition than the actual value of such a vehicle, the car insurer will decide to “write-off” the vehicle.
It is important to note that there are more factors to be considered than merely the physical damage to the vehicle in making a decision whether it is economically feasible to repair it. Among other factors, an adjuster looks at meeting the necessary road safety measures for the damaged car, parts availability, age and condition of the vehicle, nature of structural damage, and if the car insurance policy covers the provision of a rental car while the vehicle is repaired.
It is also important to note that not all car insurers use the exact same formula in the calculation of whether to “write-off” the vehicle. You should check with your insurance company on exactly how they make this decision. The industry standard is generally that a car is considered “totaled” if the repair costs are 70% or more of the cash value of the vehicle.
This actual cash value is often calculated as ‘fair value’, which means the amount at which a willing buyer and a seller would make a transaction. To calculate the actual cash value the insurer will closely monitor trade publications to value the vehicle, amending these figures for the age, condition and mileage of the car.
Once your insurance company has deemed your vehicle a “write off,” it will make a payment to you under the set terms and conditions of your car insurance policy. The insurer then owns the damaged vehicle and can mostly do what they want with it. This will inevitably mean they will re-sell it to a salvage company to offset their own costs and compensate for the payout.
Got questions? We’ve got answers! Call us at Pete Solis Collision Center! At Pete Solis Collision Center, we are El Paso’s Auto Body Shop! With over 47 years of experience behind us, we are the top choice for bodywork, paint, and more. We are the home to ICAR certified professional body shop technicians, as well as quality Sherwin Williams Automotive Finishes. Pete Solis Collision Center is located at 1434 Lomaland Dr. in El Paso, Texas. Give us a call today at (915) 599-8666. We are open Monday through Friday from 8:00am to 5:00pm.