How Does the Insurance Company Handle a Totaled New Car?
3 Answers
If a new car is totaled in an accident, the insurance company handles it as follows: 1. According to the "Regulations on Compulsory Traffic Accident Liability Insurance for Motor Vehicles": Under any of the following circumstances, the insurance company shall advance the rescue expenses within the liability limit of the compulsory traffic accident liability insurance and has the right to recover from the person causing the harm: The driver does not have a driving license or is drunk; The insured motor vehicle is involved in an accident during theft or robbery; The insured intentionally causes a road traffic accident. If any of the first two circumstances occurs and causes property loss to the victim in a road traffic accident, the insurance company shall not be liable for compensation. 2. If the insurance company follows this regulation: It can indeed refuse to compensate if the driver intentionally hits and injures someone, but given that the compulsory traffic accident liability insurance is a system centered on protecting and rescuing lives, its purpose is to protect the injured third party, not to maintain the financial balance between the insurer and the insured.
Last year, my friend bought a new car, but it was totaled in an accident within three months. The insurance company handled it quite quickly. He immediately called the police and then contacted the insurance company to report the incident. The adjuster arrived the same day, inspected the damage, and declared it a total loss. The compensation amount was based on the vehicle's actual cash value, calculated as the new car price minus depreciation and usage time. Since it was a new car, the depreciation wasn’t much, but the deductible still applied, and additional costs like purchase tax weren’t covered. About a week later, he received a check that was enough to pay off the remaining loan but not enough to buy the same new car again, so he had to add some of his own money to get another vehicle. Through this experience, he learned a lesson: it’s best to buy GAP insurance for a new car, as it can cover more of the difference in value. Also, after an accident, don’t rush to clean up the scene—keep photos and documents handy to speed up the claims process. Insurance companies are generally cooperative but won’t pay the full price, so new car owners should consult carefully about policy details when buying insurance.
After a new car is totaled in a crash, as someone who drives frequently, I recommend handling the insurance company step by step. First, file a claim and describe the accident details, then wait for the adjuster to assess and confirm the total loss. They will calculate the actual cash value compensation, which includes the car's value minus depreciation and deductibles—don’t expect to get back the original price since things like new car purchase taxes and accessories aren’t covered. If the car has a loan, notify the bank promptly to handle the remaining balance. I recommend buying comprehensive or GAP insurance; otherwise, the compensation gap can be significant. The process can take anywhere from a few days to two weeks—stay in communication and don’t shy away from follow-ups. Move the vehicle if safe to prevent further damage, which helps speed up the claim for a replacement car or loan repayment. While losing a new car is unfortunate, mastering the process makes it easier next time. Before buying another car, clarify the insurance terms upfront to avoid overpaying.
