August 27, 2011

Deciding Whether To Make A Total Loss Car Insurance Claim

The most expensive type of car insurance claim is a total loss claim in which the damage to a vehicle is exceeds the value of the vehicle. Total loss claims can mean a big payout for drivers under certain circumstances. However, they can also mean big increases in insurance bills, so drivers should take the time to consider whether or not a total loss car insurance claim is worth the time and money before filing.

There are some situations in which a total loss claim won't be worth the effort. Usually, this occurs when a policy's deductible has been set extremely high. For instance, if a policy has a $2,500 deductible and the value of a vehicle is only $3,500, a total loss claim would result in a payout of only $1,000, which may not be enough to offset the inevitable rise in car insurance rates that will come after the claim has been filed. Of course, the extent of the increase in car insurance rates will vary depending on the type of claim and the value of the vehicle, so drivers should check with their insurance providers to find out what their rates will be after a total loss claim has been filed. In most cases, the claim will be worthwhile, but drivers who can afford to replace their vehicles on their own may decide to do so to avoid premium increases.

It's also important to consider the other costs of a serious accident that results in a total loss when making a car insurance claim, as insurance providers will often cover some of these bills. For instance, most car insurance companies will agree to cover the cost of towing in a total loss. Others might reimburse a driver for rental car costs or for a professional mechanic's examination. While each of these bills is usually fairly small, they can quickly add up. Drivers should include all auto-related expenses when filing a total loss claim or when considering such a claim. Some car insurance companies will even help to pay some of the costs of a driver's next vehicle, including title transfer fees and taxes.

No driver wants to make a total loss claim, but when a vehicle has been stolen or when it has sustained a large amount of damage, a total loss claim can help a driver get back on the road. It's always important to make a few calculations before proceeding with a total loss claim to avoid wasting time and money, but for most drivers, a "totaled" vehicle can mean a hefty insurance check that will greatly reduce the cost of a new car.