Does My Auto Insurance Company Keep My Car If It Is A Total Loss And They Pay Me For It?

Auto insurance can be a very confusing subject, and many consumers do not understand many things if their car is totaled in an accident or by other damage. If you have collision and comprehensive coverage in your vehicle insurance policy, your car insurance will usually pay to either repair the damage or pay a claim to make you whole by paying the actual cash value of the vehicle. Knowing this may lead to more questions, like what happens to my vehicle and what about the loan amount still owed. Once your car has been considered totaled by your car insurance carrier, the claim payment process starts. Your vehicle insurance provider will determine the actual cash value of the vehicle, and many factors are taken into consideration for this. Any damage not a result of the accident may lower the value, and mileage is considered as well, including whether there are a high or low number of miles on the car. Any options that are installed may also be a factor in the actual value of your car.

Once your auto insurance company has determined the actual cash value of the vehicle they will issue a check, made out to you or you and the loan holder if there is still a loan balance due. But what about your vehicle? Will the car insurance company keep it since they paid the value of it? Once the claim is paid by your vehicle insurance carrier, they own the vehicle. You may have the right to purchase it back from the car insurance company at a price they determine to be fair, depending on where you live and what your local laws are. It should be taken into consideration, however, that once a vehicle has been totaled it must have a salvage title issued instead of a regular title.

Usually auto insurance companies will sell these vehicles for scrap to a local junk yard, if they are not bought back by the original owner. Once a salvage title has been issued most car insurance companies will not insure the vehicle, and it can not be driven on the roads in almost all states. If the vehicle is rebuilt then you can have it inspected and request a rebuilt title, and this will allow the car to be driven on the roads and highways.

If you decide to buy your vehicle back from the auto insurance company after it has been totaled, keep in mind that the company may set what they believe is a fair price. Most car insurance companies will release the vehicle for the price of what the car would be junked for, while others may charge a little more. If you do decide to buy your vehicle back from the vehicle insurance company, it is a smart move to check out whether any auto insurance providers will even insure the vehicle first. If you have GAP auto insurance coverage as well, then you may want to check with your GAP car insurance agent to see if they have an option to the car as well. This could save you from hassles later on.