If you wind up with a totaled car and have USAA car insurance, they’ll help you at every step in the process.
When you own a vehicle, there is no way to predict the damage that may be done to it if you happen to be in an accident or some other unfortunate event occurs. In some cases, the damage may be so bad that your insurer will declare your car a total loss. If you do find yourself with a totaled car and happen to have USAA car insurance, you’ll find a good deal of support if you follow the appropriate steps.
Just when is it a total loss?
Determining if a car is a total loss in the aftermath of an accident (or some other covered incident that damages a vehicle) generally falls into one of the following categories:
- The vehicle cannot be repaired safely
- The cost of repairing the vehicle exceeds the cost of replacing it
- Your state laws dictate that the car must be deemed totaled based on the amount of damage done to it
Car insurance companies often have varying thresholds for determining if it’s worth repairing or restoring a damaged car. Some companies consider a car totaled if the cost to repair or restore the car to safe operating standards exceeds even 51 percent of the current market or actual cash value of the vehicle.
Damage claims vary by option
The damage done to your car that could lead to it being totaled may be covered under separate options on your USAA car insurance policy. This can be a critical consideration and one you should review before you have your coverage options in place.
If you have USAA collision coverage, it will cover the damage done to your car if you collide with another vehicle, hit a stationary object (like a tree or building) or if you suffer a rollover accident. If you damage your car in a collision and file a claim, your USAA claims adjuster will determine:
- If the claim is valid under your collision coverage
- If your car can be repaired
- If it needs to be totaled
If you have USAA comprehensive coverage, it will cover damage your car sustains in what’s known as a non-collision event. These events can range from fires and floods to severe weather, if you hit an animal (or if an animal attacks your car), or if a tree fall and crushes your car while its parked in your driveway. If your car is stolen and is never recovered (or it’s recovered but has been chopped for parts) you will be filing a claim under your comprehensive option. Again, a USAA claims specialist will determine if your claim is valid and if your car can be repaired, or if it needs to be totaled.
Remember that with collision and comprehensive, you will have a separate deductible with each option.
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Generally speaking, determination of a totaled car will come under one of these two options. In rare cases, your car may be covered under a more exotic product (for example, you may have your car covered under an umbrella liability policy that also covers your home) and a claim under this type of option will be evaluated for repair or total loss options.
If your car is damaged in an accident that is the other party’s fault and your car is damaged beyond repair, it will be declared a total loss and the other party’s liability coverage will be tapped for the settlement. If that person doesn’t have insurance (or doesn’t have enough insurance) you will either have to take that person to court for your compensation or (if you were cautious enough to have this option in place) you could make a claim on your USAA uninsured/underinsured motorist coverage.
To total or not to total
Before declaring your car a total loss, USAA will look into the prospect of repairs. There are more than 2,300 USAA-approved repair facilities in the United States. If you have a mechanic or body shop you rely on, you will want to check into whether it’s on that list. If it is, there’s a good chance your own mechanic can complete an assessment and get you and USAA an estimate for repairs. In some states and under some plans, even if your preferred mechanic isn’t on the USAA list, you can petition to have your preferred shop offer an estimate that will be used in determining if your car needs to be totaled.
If, in the end, USAA determines that your car is a total loss under a valid claim, there will be a few general stages in the process:
- Evaluation – USAA will conduct a market survey to establish the actual cash value of your car. The survey will be based on your vehicle's condition prior to the loss. USAA will also compare your vehicle to similar vehicles sold or available for sale in your area to make a determination of value.
- Settlement – a USAA claims representatives will contact you to review the market survey report and go over its findings. From there, and based on that report, USAA will inform you of what it intends to offer by way of a total loss settlement for your car and what (if any) documents you will need to provide them.
- Payment – if there are no objections on your part, USAA will promptly issue you a check for the settlement amount. If you happen to have additional financial products through USAA, it can be even easier as they can deposit your total loss settlement directly into your USAA checking or savings account. Funds will be available within 24 hours. As a USAA member, they can also help you purchase a new vehicle through its members-only Auto Advice Center. They can even get you started on a new car loan online.
I don’t agree!
In some cases, you may find that the settlement amount for your totaled car seems low. Part of that may stem from the fact that, when determining a settlement amount, USAA does not rely on what are sometimes referred to as book values. Book values are vehicle price guides commonly used by dealers and financial institutions. These may not accurately reflect your vehicle's value in your local market area. Also, book values may not reflect price changes in the market that may have occurred after the guide was published and may also fail to reflect the state of the local economy you live in.
Take a quick look at some competing car insurance coverage quotes
If you disagree with the settlement value, check your USAA car insurance policy and see if it contains something called an Appraisal Clause. This clause should spell out all the options you have for resolving any total loss value disputes you may have with USAA in your state and under the terms and conditions of your specific policy contract.
The aftermath
If your car is totaled under your USAA car insurance plan, there are a few “housekeeping” duties you will be expected to take care of, including:
- Arranging to have your personal belongings removed from your car
- Providing authorization to the repair shop or towing service to have your car moved to a secure storage facility
- Find your title (if a lender holds the title to your vehicle, you may need to ask your lender to give USAA authorization to obtain title and loan payoff information)
- If required by state law or if requested to do so by your claims representative, arrange to have the license plates removed from your car
- Depending on your state's requirements, USAA may be required to obtain the titleholder's signature on certain forms as part of the ownership transfer process
What happens to my totaled car?
After USAA receives your signed vehicle title documents, it becomes the owner of your totaled car. Typically, that vehicle is then sold at auction and the proceeds from those sales are used to offset USAA’s claims/losses.
Under certain conditions, you can elect to keep your totaled car, but certain requirements will be imposed on you. For starters, if you decide to keep your totaled car, USAA will deduct the salvage value of your vehicle from the settlement amount. (The salvage value is what USAA expects to receive for selling your vehicle in its damaged condition at auction or to a parts broker/salvage yard.)
If you decide to keep your totaled car and, depending on your state laws, you may be required to:
- Have your vehicle title changed to indicate that your vehicle was totaled
- Go through a specific state vehicle inspection process
- Some states may not allow you to re-register your vehicle
(Check with your local department of motor vehicles before you make a decision)
But I still owe money…
Believe it or not, it happens. There are times when your car is declared a total loss, you go through the process of negotiating a total loss settlement, the settlement check comes, and it’s still not enough to pay what you owe. This most typically happens with newer cars you have a loan on or cars you are leasing. The simple reason for this is that cars tend to depreciate faster than your loan amortization schedule pays out. Interest and fees are usually front-loaded on a loan and you could easily find yourself owing more than a totaled car settlement offers. With leases, there are costs and fees associated with a lease that you could still be on the hook for if you total the car before the terms of your lease are completed.
It’s one reason why most lenders or lessees will require you to put total loss protection or GAP car insurance coverage in place if you are financing or leasing a car. If you are a USAA customer and you’ve financed the purchase of a newer car using a USAA product, they can offer you some alternative coverage for total loss protection. Strictly speaking, USAA dos not offer GAP coverage (the one exception is for Washington state policyholders) so be sure to speak with your loan or lease officers to put the proper coverage in place.
Other considerations
During the time between when the accident/incident occurs and your car is declared a total loss, you may have the need for supplemental transportation. This is where adding an option like USAA rental reimbursement will come in handy. If you have USAA rental reimbursement coverage added to your USAA car insurance you could gain access to a rental vehicle as a result of a total loss claim. Reimbursement rates and length of use will vary from state to state and from policy to policy. Either refer to your USAA policy or speak with your USAA claims representative.
Once your totaled car claim is settled, the vehicle will be deleted from your USAA policy effective the day after the loss occurred. However, if the vehicle is the only one on your policy, USAA may leave it active (temporarily) to provide you car insurance coverage while you are driving another vehicle.
Refer to this guide to see all your car insurance coverage options through USAA
Of all the possible scenarios for which you will rely on proper car insurance coverage, having to file a totaled car claim may be one of the more complicated and stressful. This is one area where it really pays to do your homework ahead of time and be sure you have the proper coverage options and levels in place before an accident happens. One great way to ensure you are properly protected is to visit with a licensed insurance professional. An experienced agent can answer all of your questions, spell out some coverage options before you buy, and even help you find discounts you may be eligible for but unaware of. Reply! can help you with this by connecting you to local car insurance agents with access to leading companies like USAA.