How Does the Insurance Company Compensate If the Car is Totaled?
2 Answers
If it is a single-party accident, and the vehicle is insured with collision coverage and has a no-deductible clause, compensation will be based on the actual value of the vehicle. If it is a two-party accident, compensation will be made according to the proportion of liability. Commercial auto insurance includes the following types: Third-party liability insurance: This refers to the situation where the insured or their permitted driver causes a traffic accident while using the insured vehicle, resulting in bodily injury, death, or direct property damage to a third party. The economic liability that the insured is legally responsible for will be compensated by the insurance company according to the insurance policy. Comprehensive theft insurance: When the insured vehicle is stolen, robbed, or forcibly taken, resulting in vehicle loss, or when the vehicle is damaged or parts and accessories are lost during theft, robbery, or forcible taking, the insurance company will compensate according to the terms of the contract.
How does the insurance company compensate for a totaled car? I experienced this last time when my car was rear-ended and totaled. The process is to first report to the insurance company, and they will send an adjuster to assess the damage. If the repair cost exceeds the current value of the vehicle, it is considered a total loss. The compensation consists of two parts: the auto damage insurance covers the vehicle's current value based on the accident liability ratio, taking depreciation into account (usually a 10% reduction per year of use); the compulsory traffic insurance covers the other party's losses. The process typically takes a few weeks to a month, and you need to prepare documents like the vehicle license and insurance policy. Remember to complete the deregistration procedures at the DMV after the car is totaled, otherwise, it may affect your ability to buy new car insurance later.
