Monthly Archives: November 2012

What Makes a Car Totaled After a Wreck?

When most people picture a totaled car, they picture a car crunched like an accordion or a car that is in pieces all over the road. While a car in this condition is undoubtedly totaled, a car that appears to have minor damage may also be declared totaled as well.

How is that possible?

Well, whether or not your car is totaled has a lot to do with the value of your car. Basically, if it will cost the insurance company more to repair your car than it would to replace it, then they will declare your car a total loss. A lot of times a car can look like there is no way it could be totaled, but when repairs start to take place, unseen damage can be found in the engine that can quickly make the repair costs add up. In most cases, if the repairs equal 70-75% of the car’s value, it will be declared a total loss.

Even if your car has a high value, it may still be considered totaled if the damage that occurred cannot be repaired to a safe state. In fact, some states even require that a car be totaled if the amount of repairs reaches a certain threshold.

Sweet, so then the insurance company will replace my car?

If only it were that easy. Insurance companies are actually only required to pay you the actual cash value of the car, which they get to determine. They will look at what similar cars are selling for in your area, as well as sources like Kelley Blue Book. But if your car has unusually high mileage or any pre-existing damage, you can expect your settlement amount to be even less.

Whether this is good or bad for you depends on your financial status with the car. If the car is paid off and you were considering getting a new car anyway, getting your car totaled can be a blessing in disguise. However, if you still owe on your car, the insurance company will only pay what they consider the actual value of the car, not the amount you owe. Yes, that means you may have to keep making car payments on a car that is no longer drivable.

Do I have any other options?

Actually, yes. If for financial or sentimental reasons you would rather keep your car, then that is an option as well. Insurance companies sell totaled cars to salvage companies, so they may as well sell it to you instead. In that case, the insurance company will deduct an agreed upon salvage amount from your settlement payment. However, keeping a totaled car is risky business. After all, it was declared totaled for a reason.

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How to Handle a Wreck when the Other Driver Does Not Have Insurance

After the realization has set in that you have just got in a car accident, you may experience many emotions. You may experience pain, worry, and confusion. You may even feel some relief if you know that you were not at fault for the accident. At least you won’t have to worry about using your insurance coverage or paying for the damages. Whew!

But wait…what if the other person doesn’t have insurance?

Of course they have insurance, right? It is the law, after all. That is true, but that does not mean everyone follows this regulation. In fact, according to the Insurance Research Council, as many as 1 in 7 drivers do not carry the insurance required by law. That means that if you get in a car accident, there is a 14% chance that the person that hits you will not have insurance.

What does that mean for me?

Well, unless you are extremely lucky it means that you are going to have a hard time getting your medical bills or car damage paid for. That is because most people that do not have insurance do not have very many personal assets. Even if they actually have enough money to pay you, are they accountable and responsible enough to actually follow through? Considering they are already breaking the law by not having insurance in the first place, probably not.

Can’t I take legal action?

Yes, hiring a lawyer to get your expenses paid for is always an option. However, even if you win, that does not guarantee payment. Some states will garnish wages to pay for lawsuits, but oftentimes you are responsible for collecting the payment yourself. Not to mention, there is a chance that you could lose. In that case, you will end up with legal fees to pay as well.

So I am just tough out of luck?

Unfortunately, yes. That is, unless you were smart enough to add uninsured and underinsured motorist coverage to your insurance before you got in the accident. This is the best way to ensure that you will be covered in an auto accident no matter what. The coverage only costs about 10 extra bucks a month and covers medical payments, car damages, and even wages lost in the event of a no-fault accident where the other driver does not have insurance. Plus, isn’t peace of mind priceless?

Why Speeding in Neighborhoods is a No-No

Do you feel like you are always running late? If you are, you probably speed more than you would like to admit. Yes, where you are going is undoubtedly important. However, it is important that you abide by the speeding laws, especially when driving through your neighborhood. Of course you know that speeding laws exist to keep you and other drivers safe while on the road, but when you are driving in neighborhoods there is more to the equation.

But the speed limits are so slow in neighborhoods!

Yes, they are, for a reason. Think about it, how many times when you are driving through your neighborhood do you see other people out walking or running. Perhaps they are taking their dog for a walk. Maybe they are playing catch with their kids in the front yard. These happenings are what add charm to a neighborhood, but they also make it extremely important that you follow the speed limit. Most speed limits in neighborhoods are between 20-30 miles per hour. At this speed, you are going slowly enough that you are able to actively be on the defense so that you can efficiently react if need be.

For example, let’s say that the parent playing catch with his child accidentally overthrows the ball, causing his child to chase after it without even thinking to check for cars. What if the dog going on a walk breaks free from his leash and makes a run for it. These are all things that happen in neighborhoods across the country every day.

But I’m going to be late!

Even if you are running late, it is important that you follow the ever-so-slow speed limits in your neighborhood. If you have to speed (which we don’t recommend) wait until you are on the freeway. Chances are that your family likes to spend time outdoors, too, and you probably expect the drivers to drive slowly when you are the ones outside.