Hearing that your vehicle has been declared a total loss can be frustrating. But not knowing what to do after the announcement can be very worrying.
In this article, we explain what a total loss is, explain five steps you should take following a total loss to reduce your stability, and provide expert advice on how to better prepare for the unexpected.
What does it mean when my car is reported as lost?
When the damage to your car is equal to or exceeds a certain percentage of your car’s actual value (ACV), it is considered as total loss. This number varies by state, and the average loss rate is around 75%.
First things first: What to Do After a Total Loss Accident
What should I do if my car is a total loss?
If you find that your car has been lost, there are five steps you can take to speed up the process.
Step 1: Determine Your Vehicle’s Headspace
A head is the official form you receive when you buy your car. This document declares that you are the owner of your vehicle. You should receive a title when you buy your new or used car, whether from a dealer or a private citizen.
This chapter is supposed to fix the lost car as a whole, so that this document is easily available is very important so that we can move forward with the process of solving the problem quickly and efficiently.
Step 2: Identify the owner of the property
A assistant is the financial institution that has loaned the car to you or financed the purchase of the car.
The owner’s knowledge is important for sustainability, as he has a vested interest in the vehicle.
Step 3: Request a Letter of Confirmation
When your lender is notified that the vehicle is a total loss, they must provide a “Letter of Guarantee” detailing the current payment. If the value of your car is above the amount paid, your insurance company starts paying the owner and any remaining amount goes to the named party on the title.
Step 4: Get Your Lien Release Document
If your loan is paid off through a net loss, you should receive a release of covenant a document from your lender. This document states that the financial institution no longer has an interest in your vehicle.
Step 5: Send a Copy of Your Release to Your Insurer
When you receive a lien, it is important that you give a copy to your agency so that your insurance company can remove the lien on your car. This change will indicate that the group is no longer financially interested in your vehicle.
“I’ve seen many examples of a car that’s already been paid off, but I’m still figuring out who owes it,” says Adam Halde, the company’s property representative. Central Insurance. “And by law, if the borrower is identified on the policy, your insurance company must name them on any regular check unless you provide documentation that they no longer have interest in the vehicle.”
For this reason, ensuring that documentation is provided to your agent in a timely manner following a total loss is important.
How to Prepare for the Unexpected
Having auto records that are organized and easily accessible is one small step in creating a greater risk in dealing with a total loss. Eliminating the need to search or collect different documents from different sources after an accident helps streamline the process and can help you get a fine faster.
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The auto experts at Central suggest keeping a folder dedicated to each vehicle you own. Each folder should contain copies of your vehicle:
- Title deeds
- Lienholder documents
- Document processing
- Insurance records
With a system like this, if the car you own is known to be lost due to an accident, getting everything you need to start working on recovery will be easier and more efficient.
Note: This article was originally published in January 2017. It has been updated for accuracy.