Provided you transact congruous insurance, the insurer Testament transform a totaled vehicle.
State auto insurance regulators establish laws about total loss and vehicle replacement.
Similarity
An insurance policy that offers replacement will replace your totaled vehicle with a similar one. State regulations define what type of vehicle is similar.Provided a Chauffeur who has insurance coverage has an accident, the insurance company sends away an adjuster to conclude the magnitude of damage to the machine. An Car repair shop can repair some damage, on the other hand provided the automobile is severely damaged, it is considered unusable and the insurance business records the episode as a total loss. Several states define a total loss as damage that reduces the value of the car by 75 percent or more.The State of Illinois, for example, requires the replacement vehicle to be in the same or better condition than the totaled auto. The make and model of the new vehicle must also be similar, but it does not have to be an exact replacement of the wrecked vehicle.
Auto Loan
Replacement does not cover the cost of the car loan. When a consumer finances a vehicle, the lender adds interest charges and other fees, making the total cost much higher than the car is worth, even if the consumer purchases a used car. If the insurer purchases a replacement vehicle for the policy holder, the consumer is still responsible for paying the previous loan on the totaled auto. The Idaho Department of Insurance recommends purchasing guaranteed auto protection, or GAP, insurance. This policy pays the difference between the loan and the car value if an accident totals the car.
Local Auto Dealer
States normally require the purchase of a replacement vehicle from a licensed car dealer and forbid private sales. The state of Washington requires the insurer to make the replacement car available for the policy holder to examine near the location that the policy holder normally parked the totaled car. When the insurer determines the cash value of a replacement vehicle using quotes on cars that nearby dealers sell, Washington establishes a range of 150 miles.
Replacement Refusal
The policy holder can refuse to accept a replacement car. In Washington, the policy holder must notify the insurer that no nearby dealers sell comparable cars or that local dealers offer cars at higher prices than the price the insurer claims is the totaled car's value. The insurer then has the responsibility of finding a replacement car for the policy holder. If the policy holder rejects the car that the insurer finds, the policy holder can receive a cash settlement; the terms vary by state.
