Car accidents are some of the most stressful incidents a person can be involved in during their lifetime. Even when there is little to no damage done to the vehicle and no injuries suffered, just the idea of having to deal with an insurance company can make a person stress and worry. The more serious the accident is, the more damage there is to the vehicles involved.
What happens if your vehicle is totaled in a Chicago car accident? How do you handle a total loss claim? The team from Gainsberg Law, P.C. is here to provide you with some guidance on this topic.
How the insurance company determines a car is totaled
The only entity that can label a car as being totaled is the insurance company involved in the accident claim. Why? Because the insurance company is the one that will be paying out money to either repair the car or to replace the fair market value of the car. When a car insurance company determines your vehicle has been totaled, it will only pay for the fair market value of the vehicle at the time of the accident. This means that if you had $18,000 remaining on your loan, and the car was valued at $13,000, you will be on the hook for the $5,000 still left on the loan.
The adjuster assigned to your accident case by the insurance company will examine your vehicle and assign it a value for repair and determine the fair market value of the car. If the amount to repair the vehicle costs more than the fair market value, the insurance company will deem your vehicle to be a total loss.
You can keep your vehicle if it is deemed a total loss in only two circumstances according to Illinois law:
- The car is nine years old or older (deemed to be a salvage vehicle, which cannot be driven on the roads of Illinois and must be registered as such with the state)
- The vehicle was damaged by hail (obviously not involved in an accident)
Underwater on payments for a total loss vehicle
There’s nothing worse than being behind on loan payments for a vehicle that has now been labeled as a total loss. Even though you have insurance coverage on the car it will not fix your financial problems. You will still need to find a way to pay the remaining balance of your car loan to the lender after the vehicle has been totaled. Losing the use of the vehicle does not remove your financial responsibility. The payout by the insurance company will likely not go to you, but instead directly to your lender if there is money remaining on the loan. Any balance left after the insurance payout will need to be taken care of by you.
Did your vehicle suffer extensive damage in a car accident? Did your insurance company deem the vehicle a total loss? Knowing how to handle these claims is important to receiving the compensation you deserve in order to purchase a new vehicle. Call the office of Gainsberg Law, P.C. at 312-313-1621 or complete the contact form to schedule a free consultation with a Chicago car accident attorney.