Totalled Vehicle

I just bought a car and purchased an auto insurance policy. What will happen if my car is totaled in an accident?

That just depends on the type of car insurance coverage you have. If you only have liability coverage then your insurance company will not pay for any damages to your vehicle. If you have physical damage insurance coverage your car insurance company will determine how much to give you for your vehicle. Most insurance companies determine this amount by looking at the actual cash value of your vehicle. The actual cash value is the amount of money required to replace your car less any depreciation.

As you can imagine, it is quite common for the insurance company and you to disagree on the amount of money you should receive for your vehicle. If you have a loan on your car and are worried that you might be upside down in your loan you might want to consider getting gap insurance. Different insurance policies have different amounts of coverage, so you should read your policy to see how much coverage you have.

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