If your car has been through a particularly severe hail storm, you may have filed a claim with your insurance and gotten the news that your car is considered totaled.
But what does this mean, and what should you do about it? Do you have to go out and buy a completely new car now? What if you don’t have the money — does insurance cover it?
If you’re confused, you’re not alone. Keep reading to get answers to all your questions about what to do when your car is totaled from hail damage.
How Does Insurance Decide Whether to Fix Your Car?
When you file a claim with your insurance company, several factors are used to determine whether insurance can help you and whether the car is fixable.
Insurance will only help you if you have coverage that includes the damage you’ve received. For car hail damage, comprehensive coverage is necessary to cover repairs.
Next, insurance calculates how much the damages will cost and how much the car is worth. Your insurance company will take your car’s actual cash value (ACV), which equates to your car’s current market value, subtracting depreciation. Then, your insurance will determine the scope of repairs needed, and add up the cost based on regular market rates. Finally, your car’s salvage value is also taken into consideration.
If the costs of the repairs and salvage value exceed the ACV of your car, your car is considered totaled.
What If Insurance Wants to Total Your Car?
If your insurance wants to total your car, the normal course of action is to give your car to a salvage yard. In exchange, your insurance company will give you a check amounting to the ACV of the car. This will almost always be less than you paid for the car.
If you want to dispute the claim, you certainly can — but it will require evidence. You’ll have to prove the damage won’t cost as much as your insurance says, or that your car’s value is more than they say.
If you have an add-on to your insurance called car replacement coverage, you can get more money in order to replace your car with one of an equivalent make and model.
What Happens If You Want to Keep the Hail-Totaled Car?
If you want to keep your car after it’s been declared totated, it’s possible, but it introduces some new problems. Your insurance company will still write you a check for your car’s ACV, but you’ll be responsible for paying for auto hail repair. These repair costs will likely be more than the ACV.
You’ll also run into issues insuring your car in the future. Once a car is totaled, it’s issued a salvage title, which means many insurance providers won’t want to insure it, since it’s essentially considered scrap. You may also need an inspection to prove the car is still drivable before it’s allowed back on the road.
Whether you decide to keep your totaled hail-damaged car or not, it’s important to understand the process that insurance companies use to make this decision. Being informed and knowledgeable about auto hail repair can help you navigate this challenging situation and make the best choice for you and your vehicle.