Why an Insurer Decides to Total a Car: Financial Implications Explained
Saturday, 16 March 2024, 00:00
When Does an Insurer Total a Car?
An insurance company will typically declare a vehicle a total loss if the cost of repairing it equals or exceeds its market value.
Consequences for Vehicle Owners
When a car is totaled, the insurance company compensates the owner with a payment equal to the car's market value, potentially causing financial challenges if the owner owes more on the car than it's worth.
Protecting Against Losses
Drivers can safeguard themselves by purchasing gap insurance and new car replacement coverage to cover potential shortfalls in case of a total loss incident.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.