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Despite doing your best to drive safely, accidents still happen. Bad weather, slick roads, reduced visibility or even distraction can result in a serious collision. Then, regardless of the situation, you’re stuck dealing with the fallout of the accident. In some cases, that can mean receiving medical care for injuries. In others, you’ll get faced with damages to your vehicle.

The faster the vehicles were going when they crashed, the worse the potential damage to your car. Your insurance policy may cover property damages, but there could also be a limit on how much coverage you have.

If either you or the other driver involved in the crash only had the California minimum insurance, there may not be sufficient coverage to offset the damages to your vehicle.

Some drivers on the road carry policies that only offer $5,000 worth of property damage coverage. Unless your car is very old or in poor condition, replacing a vehicle or having extensive body repair done could easily exceed $5,000. In cases where your vehicle gets declared a complete loss, or “totaled” by the insurance company, you will only receive a certain amount to replace your vehicle.

What does ‘totaled’ mean to insurance companies?

There are generally two standards insurance companies will look at when determining if a vehicle can get repaired. The first is the value of the car versus the value of the repairs. For example, if the vehicle has a fair market value of $10,000, but the repairs will be at least $12,000, the insurance company may decide the vehicle is totaled. After you file a claim, the payout would go toward purchasing a new vehicle instead of repairing the vehicle damaged in the accident.

The second factor is whether the vehicle’s safety could be compromised by the damage. Even with repairs, bent frames and other serious issues could reduce the protection your vehicle offers in a future collision. Especially in older vehicles, the cost of repairing serious damage, like a bent axle, could be much greater

Older cars and partial responsibility reduce how much you get

Older cars are more likely to get rated as “totaled” by the insurance company after a crash. These vehicles generally have lower resale values, so the insurance company will pay out less to offer replacement than repairs. Newer vehicles, which retain a higher overall price, may get repaired unless the damages compromise the safety of the vehicle. With older vehicles, the insurance company only has to offer the fair market value of the car before the crash, which might be much lower than you think.

It’s also important to note that in some cases, the police report and assignment of fault in the accident could impact your insurance settlement for a totaled vehicle. Avoid admitting fault when speaking with your insurance company to reduce the risk of a lowered payout.

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