How Much Does Insurance Pay For A Totaled Car In North Carolina?

Tuesday, December 12, 2017

In North Carolina, the driver who caused the accident is responsible for damages. The insurance company will determine if the damaged car can be repaired, or if the car is a total loss. Repairs on damages less than 25% of the vehicle’s value are paid in full by the insurance company. If the damage is more than 25% of the automobile’s value, the accident must be noted on the vehicle’s title and may lead to additional claims. A vehicle with repairs and expenses that exceed 75% of the resale value is considered a total loss. In this case, the insurance company will pay out the actual cash value of the vehicle. Find out about your options for a totaled car at the North Carolina DMV website.


Payment for a totaled vehicle


If the driver of the totaled car is the owner of the vehicle and possesses the title, he or she is entitled to full payment from the insurance company. However, matters are different if the totaled car was being financed. In this case, the payment will be split between the car’s financer and the owner. One of the following situations can apply:


  • The remaining balance exceeds the fair market value. In this case, the insurance company will pay the financier the actual cash value of the totaled car. The owner is then responsible for paying the outstanding balance.
  • The remaining balance is less than the fair market value. The insurance company will issue a check to the financier for the remaining balance. This is deducted from the actual cash value of the car, and the remainder will be paid to the owner.


Drivers who are financing their cars can gain protection from the first scenario with additional insurance. Gap insurance protects car owners who owe more on their loan than the fair market value of the vehicle. Similarly, replacement insurance can provide a rental car in the event that your car is totaled.


Determining the value of your car


When your car is totaled, the insurance company will pay the fair market value of your vehicle. After an accident, the insurance company will send out an employee, called an adjuster, to handle the claim. The adjuster will base the payment amount on the book value of the vehicle in your area, as well as the presence of any preexisting damage.


Car owners can check the value of their vehicle online at the Kelley Blue Book Values website. The National Automobile Dealers Associations also has price guides for the fair market value of almost all vehicles. However, the actual cash value determined by the insurance company may differ significantly. Factors such as mileage, depreciation, and wear and tear are taken into account when determining how much the insurance company will pay.




Negotiating a claims settlement


After determining that your vehicle is a total loss, the insurance company will have to negotiate a settlement based on the actual cash value. The owner of the totaled car can either accept or reject the offer made by the insurance company. If the owner chooses to reject the offer, he or she can seek out another appraisal. This comes at the owner’s expense and will likely not be accepted by the insurance company. In this case, an umpire adjuster will make the final decision. Both the insurance company and owner of the vehicle must accept the ultimate decision of the umpire adjuster.


Drivers who own, as opposed to lease their totaled car, may be able to keep the damaged vehicle after the claims settlement. Ask the claims adjuster about the salvage value of your vehicle. Often, owners can deduct the salvage value from the settlement and have the balance paid out. In North Carolina, salvaged cars receive a “salvage title,” which can make them more difficult to insure. If the damage cannot be repaired, it’s better to hand the vehicle over to the insurance company. Owners of undrivable salvage cars are held responsible for storage and other total loss damage costs.