What if my car is totaled?

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Updated: 4/13/2007 3:36 pm
If your car is totaled in an accident, it will probably be towed from the scene and possibly held temporarily for investigation before being sent to a wrecker's yard. If the accident wasn't your fault, an assessor from the liable party's insurance company will probably offer you a settlement based on the market value of the vehicle. This may not reflect the value you place on your car, or even the amount you still owe for the vehicle. If you feel the assessor's settlement is too low, an attorney may be able to help you negotiate better compensation, but the settlement probably won't exceed the fair market value of the vehicle. If you still owe money on the vehicle to a bank or finance company and the compensation isn't enough to settle the debt, you have the option of a submission of collateral. This simply means that you use the compensation money to purchase another vehicle similar in value to the original one and then exchange the new vehicle's title for the title of the damaged one held by the loan company. All parties, including the insurance company, the car dealer, and the loan company, must agree on this course of action, which is common procedure. After such a substitution, the loan company holds a lien on your new vehicle, and the original vehicle's title passes to the insurance company paying compensation. If you've been involved in an accident and your vehicle has been totaled, an attorney can explain your rights and options and assist you.

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