A totaled motorcar costs bounteous to repair than it would to interchange.
Cost Factors
The costs of repairing a vehicle go beyond the parts and labor to perform the repairs. The company also will have to invest in a rental car and other expenses you incur during a long repair process.A Matter of Risk
Insurance companies animate or die based on their competence to evaluate risk accurately. When your business establish the premium proportion for your Car policy, it based that scale in department on the expenditure of your vehicle as a soft cap on how yet they would be expected to pay out on that policy. Declaring a vehicle a "total loss" rather than repairing a badly damaged auto is one way they maintain that cap.
Whether you hated your senescent machine, the Report that it was "totaled" in an accident may come as receive information. Provided your motorcar was in an upside-down loan -- you owed added on the loan than the automobile was bill -- it can be catastrophic. Patient correct how insurance companies spread the arbitration on if a vehicle is totaled may facilitate you action for a greater payoff and may or may not aid you semblance more desirable approximately their determination.
Since the "carcass" of a totaled auto can also be sold, the calculations for whether to make a total loss declaration also include the salvage value of what's left of your car.
Car Value
Insurance companies compare the cost factors of making a repair against the cash value of your vehicle. They arrive at this value by comparing actual sale and advertised values of cars of the same make, model and condition with the same options and after-market improvements. It's worth noting that this value may or may not bear any resemblance to the Kelley Blue Book Value for the vehicle. It is a point you can argue if you believe you've been treated unfairly.
Total Loss
For insurance companies, this decision is very simple. Your car's value is their maximum cost under your policy. If the cost factors for repairing your vehicle would exceed your car's cash value, they will opt to chop you a check for the cash value instead. For instance, writing a check for the $18,000 value of a car needing $22,000 in repairs would save the company $4,000. Some companies set their "total loss" threshold below the actual cash value -- as low as 50 percent in some cases -- to account for extra expenses like storage and towing.
