What goes on inside the insurance auto-auction pipeline?

Your insurance company is likely to total your car if you’ve been in an accident and your car was   wrecked. They will probably send your car to an auction pool after sending you a check for its market value. So, what is the auto-auction pipeline?

• Your car is wrecked after a serious accident

• Your car gets towed in a “preferred garage”. Your state certifies this garage for salvage work.

• Your car is “totaled” by your insurance company, you receive a check for the market value and then your car is in the auto-auction.

• You can choose either to purchase your car back from the insurance company, or the company will acquire the title.

• Your ex-car’s title is now acquired by your insurance company.

• Your ex-car is being towed away to the auto-auction’s holding lot.

• Your ex-car is auctioned to the highest bidder.

• Your ex-car is then either repaired by a dealership and resold or is scrapped for auto parts.

Now that you have an idea of what the auto-auction does to your car, you might want to know about “clean titling”. Your car will get one of the two titles: a salvage title, or a clean title. A salvage title is usually acquired by your car when it is considered a salvage vehicle.

Remember that these titles are provided by your state, not your insurance company. After your car is sold at auction, a clean titled car won’t have to go through such a large department of motor vehicle inspections. As a matter of fact, if your ex-car is a clean titled car, it will most likely receive a bid that is three or four times higher than a salvage titled car.

Kitty Miller, a spokesperson for Farmers Insurance says, “We salvage-title vehicles because we don’t want an unsafe car back on the road. However, what happens after we sell the car to the auction house is not our responsibility.”

Keep in mind that not all states will allow clean-titling. Here are the ones that do: Alaska, Minnesota, Wisconsin, Washington, Texas, Alabama, Indiana, Massachusetts, Michigan, New Jersey, South Carolina, Tennessee, Virginia, Arkansas, Utah, Idaho, Montana, and New York.