How Does the Insurance Company Compensate for a Totaled Car?
3 Answers
In the event of a car accident where the vehicle is totaled, the compensation standards are as follows: 1. First Category: When the repair costs exceed 80% or more of the vehicle's value, the insurance company will settle the claim as a total loss. 2. Second Category: The vehicle meets the mandatory scrapping criteria. According to Article 4 of the 'Mandatory Scrapping Standards for Motor Vehicles', registered motor vehicles shall be mandatorily scrapped under the following circumstances: First: After repair and adjustment, the vehicle still fails to meet the national safety technical standards for in-use vehicles; Second: After repair and adjustment or the adoption of control technologies, the vehicle's emissions or noise still fail to meet the national standards for in-use vehicles.
When a car is completely totaled, the insurance claim process is actually quite straightforward. I often help friends with such cases, and the first thing I must remind you is to immediately call your insurance company to report the incident and take photos of the damage as evidence. Then, the insurance company will send a professional appraiser to assess the damage. They will determine whether the car can be repaired or is a total loss. If it is indeed totaled, the payout will be calculated based on the car's actual market value—for example, the original purchase price minus depreciation. The exact amount depends on the car model and year. Don’t forget that the insurance deductible will be deducted from the payout. The entire process might take a week or two, so be patient and prepare for a bank transfer or check. If your car has an outstanding loan, the payout will first go to the loan company. Make sure all your documents are in order to avoid complications. When you buy a new car later, remember to opt for more comprehensive insurance coverage.
Last month, my own car was also totaled in a crash, and I was really panicked at the time. But I immediately contacted my insurance company. They quickly sent someone to assess the damage, confirmed it was a total loss, and calculated the payout based on the car's current value, which was about 60% of the new car's purchase price. After deducting the $5,000 deductible from my policy, the final amount I received was barely enough to buy a used one. The whole process went relatively smoothly—as long as the documentation was complete, the insurance company handled the paperwork. I spent some time organizing my car insurance history and purchase records to help calculate the depreciation value. I recommend checking afterward whether your insurance rate might increase—safe driving is the most important thing.
