Sign up for our FREE Monthly Email Newsletter
In addition to keeping in the financial know, you may be interested in checking your credit score and report.
¹The credit scores provided under the offers described here use the Equifax Credit Score, which is a proprietary credit model developed by Equifax. The Equifax Credit Score and 3-Bureau scores are each based on the Equifax Credit Score model, but calculated using the information in your Equifax, Experian and TransUnion credit files. The Equifax Credit Score is intended for your own educational use. It is also commercially available to third parties along with numerous other credit scores and models in the marketplace. Please keep in mind third parties are likely to use a different score when evaluating your creditworthiness. Also, third parties will take into consideration items other than your credit score or information found in your credit file, such as your income.
²The Automatic Fraud Alert feature is made available to consumers by Equifax Information Services LLC and fulfilled on its behalf by Equifax Consumer Services LLC.
³Equifax Credit Report Control™ is only available while you have a current subscription to Equifax Complete Premier. Locking your credit file with Equifax Credit Report Control will prevent access to your Equifax credit file by certain third parties, such as credit grantors or other companies and agencies. Credit Report Control will not prevent access to your credit file at any other credit reporting agency, and will not prevent access to your Equifax credit file by companies like Equifax Personal Solutions which provide you with access to your credit report or credit score or monitor your credit file; Federal, state and local government agencies; companies reviewing your application for employment; companies that have a current account or relationship with you, and collection agencies acting on behalf of those whom you owe; for fraud detection and prevention purposes; and companies that wish to make pre-approved offers of credit or insurance to you. To opt out of such pre-approved offers, visit www.optoutprescreen.com/.
4We will require you to provide your payment information when you sign up and we will immediately charge your card $4.95. After that, we will charge the card $19.95 for each month you continue your subscription. You may cancel at any time; however, we do not provide partial month refunds.
Equifax® is a registered trademark and Equifax Complete™ Premier is a trademark of Equifax, Inc. © 2014, Equifax Inc., Atlanta, Georgia. All rights reserved.
Collisions aren’t the only way your car can be irreparably damaged. A fallen tree, a major flood, or a fumbled theft could quickly end your car’s days on the road. More than 5 million vehicles are totaled by these and other causes every year, according to the National Automobile Dealers Association (NADA).
But the word “totaled” can have very different meanings for different people.
Individuals often say their car is totaled if it’s really mangled, but insurers take the word a lot more seriously. It’s a good idea to understand the implications of having a totaled car before you file an insurance claim.
Insurance facts: What does it mean when your car is totaled?
Auto insurance companies consider a car to be totaled if it’s damaged to the point that it isn’t worth fixing. For example, if your car is worth $10,000, but the damage would cost $7,000 to repair, there may be little value in making those repairs.
A good mechanic will usually be able to tell you how much it would cost to fix your car. That quote, along with some clear photographs, can help you speak knowledgeably about your vehicle with insurers.
How does your insurance company decide your car is totaled?
Auto insurance adjusters will want to know the condition of your vehicle before the accident so they can assess what it was worth before it was damaged. Some companies use their own standards, while others choose to consult the values listed in Kelley Blue Book or on Edmunds.com. Insurers may also want to get an outside appraisal.
According to Linda Rey, a licensed insurance agent at Rey Insurance, any outside assessments that differ from industry standards could prompt negotiations.
“If there’s a severe disparity in the cost and valuation of the vehicle and how much the company said [it is] going to give the client then [agents] might get involved,” Rey says. “There’s always two sides to every story so we try to listen to both sides and be an advocate for the client.”
It is possible to challenge the value assigned to your car by an insurer. You’ll need to speak up as soon as possible, share any third-party information you have, and keep organized records.
What happens if your car is totaled but you still owe money on it?
Your auto insurer will not cover any remaining balance you owe to lenders. If you want to be fully protected, you may want to consider purchasing Guaranteed Auto Protection (GAP) insurance.
GAP coverage can make up the difference between your car’s actual cash value and the amount you still owe on a loan. It can be a good idea to purchase GAP coverage if you made a low down payment, have a high interest rate, or own a vehicle that depreciates quickly.
Some lenders require GAP insurance before you can apply for a loan, so it could already be a part of your policy. Taking steps to confirm your level of protection now could help you avoid surprises during a stressful time.
The downside is that more insurance means higher premiums. Figure out how much coverage you can afford first and then weigh that against the consequences of losing money in an accident.
Ilyce Glink is the author of over a dozen books, including the bestselling 100 Questions Every First-Time Home Buyer Should Ask and Buy, Close, Move In! Her nationally syndicated column, “Real Estate Matters,” appears in newspapers from coast-to-coast, and her Expert Real Estate Tips YouTube channel has nearly 4 million views. She is the managing editor of the Equifax Finance Blog, publisher of ThinkGlink.com, and owner of digital communications agencyThink Glink Media. In addition to her WSB radio show and WGN radio contributions, she is also a frequent guest on National Public Radio. Ilyce is a frequent contributor to Yahoo and CBS News.
Equifax maintains this interactive forum for education and information purposes in order to allow individuals to share their relevant knowledge and opinions with other members and visitors. We encourage you to participate in discussions about personal finance issues and other topics of interest to this community, but please read our commenting guidelines first. Equifax reserves the right to monitor postings to the forum and comments will be published at our discretion. Do you have questions or comments about your Equifax credit report or customer-service issues regarding an Equifax product? If so, please contact Equifax directly. All opinions and information expressed or shared in blog comments are solely those of the person submitting the comments, and don't necessarily represent the views of Equifax or its management.