My Car Was Completely Wrecked In An Accident. Will My Auto Insurance Company Replace It?

An accident occurs, and your car is a total loss. What happens now? Will your car insurance policy pay to replace your vehicle, and what about your deductible and any loan balance remaining, if you still owe on your vehicle? The answers to these questions will depend on the types and amounts of coverage you purchased in your auto insurance policy. If you only have liability vehicle insurance, also known as PLPD in some areas, your vehicle damage will not be covered, but any damage to property or vehicles owned by others will be covered. This means that your vehicle will not be replaced by the auto insurance company, and any loan amount still owed on the vehicle is your responsibility. This is one of the reasons that most lenders insist on full coverage vehicle insurance while there is a loan balance on your automobile.

If you have collision car insurance coverage, then your auto insurance company would pay to replace your vehicle, up to the blue book value, or actual cash value. If you owe a loan on the vehicle, then the loan amount will be met first, if there is enough in the claim. This can lead to an issue that has been faced by many auto insurance customers, having a total loss due to an accident and still owing on the loan after the auto insurance company pays off the claim. This can leave you with no car and a big debt, after the auto insurance company has settled the claim. Gap auto insurance can keep this from happening to you. If you have GAP car insurance then this coverage takes care of any loan amount in excess of your claim payment, so that you are not left in debt because of this situation.

Your vehicle insurance company will reduce your claim payment by your deductible amount, but if the other driver was at fault it may be possible to recover this amount from them in court or by other methods. If you live in a no fault state you may file a mini tort claim against the car insurance company that carries the policy for the at fault driver, but the other driver has the right to deny this claim, and if this is done the auto insurance provider can not pay the claim. In this case you would have to file against the driver in court to recover your deductible.

Having the right types and amounts of vehicle insurance can be critical if an accident occurs, but many people do not carry the recommended coverage because of the high cost associated with auto insurance premiums. Cheap car insurance can be found that offers complete coverage if you compare online auto insurance quotes. You can save a lot of money without skimping on your coverage. Online car insurance quotes will let you see the prices offered by numerous different auto insurance companies.