Total Loss Coverage
Total loss coverage is a term used in the auto insurance industry to describe an insured car which has suffered irreparable damage. Lets say youre driving down a slick road late one summer night, and its pouring rain outside. And then the worst possible thing happens: you lose control of the car due to hydroplaning and smash into a brick wall. The air bags deploy, and youre ok, but the car is totaled.
In order to come to the professional conclusion that your car qualifies for total loss coverage if your insurance covers it an insurance claims adjustor will come and take a look at your car and inspect it from top to bottom in order to make the right evaluation. Between the agents opinion and the opinion of a mechanic, the decision will be made. It can get complicated from here, as the equation used to come to a decision involves the estimate for the necessary repair work, combined with any foreseeable ancillary costs, whatever the new resale value of the car would be, reimbursement expenses, the cars value before the accident, and whatever money could be collected from selling the car as scrap.
So there are multiple factors involved in coming to the conclusion that a car is a total loss, and whether or not the total loss coverage youve been paying for is going to be applicable here. Insurers offering total loss coverage include AAA, Geico, Allstate, Farmers and State Farm. Many others will offer it too. Be sure to examine each specific plan so that you fully understand all dimensions of your auto insurance coverage.
Before you buy total loss coverage, be sure to read all the relevant material you can on it, and of course, go over everything in as much detail as you need with a licensed insurance expert. When it comes to total loss coverage, you want to know what youre getting, and whether youre paying a fair price for it.