The Total Loss Process (Simplified)

September 27, 2023

It is safe to say that insurance is a somewhat complicated subject, and most people struggle with understanding the ins and outs of making claims.

For this reason, we have gathered together a “The Policyholder Survival Guide” to explain in plain and simple language how the claims process works and how you can calculate the value of your vehicle.

By better understanding this process, you will be able to determine whether the insurance company’s settlement offer is reasonable or if you need to make a counter-offer. If you feel it is not, then this guide will walk you through your options which are pretty simple to exercise.

At a fundamental level, your insurance company will deem your vehicle a total loss in one of the two cases:

  • It is damaged through collision, fire, hail, etc., and the cost to repair it is close to or exceeds the fair market value of the vehicle,
  • It is stolen and not recovered within a reasonable period.

They will determine a pre-accident value and make you a settlement offer to buy back the damaged vehicle at the pre-damaged price. If you accept their offer, they will issue you a check, after which the insurance company will become the rightful owner of your vehicle.

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Suppose you feel that the insurance company’s offer should be higher. In that case, you have the right to submit credible data to demonstrate otherwise and be able to demonstrate why their valuation was not correct.

Marian Sahakyan

Marian Sahakyan is a content writer and a journalism graduate from California State University, Long Beach with a background in marketing as well as UI and UX design. Marian’s previous writing and reporting has been featured in several community newspapers throughout Southern California.


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