I have written before about your car being a total loss. Sometimes after a car accident, the auto will be deemed a total loss. When your car is a total loss, you are entitled to the fair market value. What is fair market value? That is what a willing buyer will pay a willing seller. In California, it is basically what the car is selling for in the classifieds.
What do you do when you are driving a car that may have a lower value temporarily? For example, a few years ago when gas prices were really high, SUVs had very little value because no one wanted to pay for gas. What happened to the car values for total losses? They went down.
How can you fix this problem? There are two primary methods:
- If you have a loan on your car, consider GAP coverage. This will pay the difference between what your car is worth and what you owe on your car. GAP coverage can be beneficial for some people, especially if you have no down payment on your current car.
- Stated value coverage is another option. In stated value coverage, you state the value of the car and you pay for insurance for that amount. This is generally for classic or specialty cars, but you can shop around for a policy that will provide this coverage to you. (Make sure you read the policy as some policies that are stated value pay UP TO the stated value while others will pay the stated value.)
For a free evaluation of your total loss, you email me at email@example.com and I will review the total loss evaluation of your car. This is a $500 value.