In Michigan, after the stress of being in a car accident, you might have to endure the additional trauma of having your car “totaled” by the insurance company. However, you have some options for dealing with this situation and can make it work to your benefit. Remember the following points while working through the possibilities for your totaled car.
Negotiate your car’s cash value
If you had collision insurance coverage at the time of your car accident, the insurer would pay, up to your policy’s limits, to repair your vehicle. If you only had liability coverage, the insurer will not pay for the damage to your car and will only cover damage caused to other people or property.
If you were covered and an insurance company decides to total your car, they will offer you the Actual Cash Value (ACV) for the vehicle. The insurer considers your car’s market value and adjusts for its condition, age and mileage. You can negotiate this value by supporting a higher value based on recent repairs or maintenance receipts and evidence of a higher market selling price.
Consider keeping the car
If you can get your car repaired cheaply, you can keep the vehicle and accept a payout from the insurance company. However, the car repairs may cost more than the ACV, making it worth taking the totaled car settlement and purchasing a new vehicle.
Salvage title cars
Once the insurance company declares your car a total loss, it receives a salvage title. You can only legally drive the vehicle once it receives repairs and passes a state inspection for road safety. If you want to repair the car and sell it, remember that these cars often sell for significantly less than cars with a clear title and you or a buyer may have trouble finding an insurer to write a policy for a car with a salvage title.
Understanding your insurance coverage, how to negotiate a settlement and the issues with a salvage title can help you make a better-informed decision regarding your totaled vehicle.
