Total Loss Insurance: Definitions & Articles

Total Loss Insurance in a Nutshell

With over 230 million licensed drivers in the U.S., car insurance is one of the hottest topics. But not everyone knows about total loss car insurance, which can cover your financial losses if your car is totaled as a result of an accident.

If your insured-against-total-loss car is considered a total loss – which can be the case if it cannot be repaired or if the cost of repair is higher than the actual market value of your car – then the insurer will give you a settlement.

What Does It Cover?

It covers for a totaled vehicle, which can be recognized such by an assigned adjusted if:

  1. The damage meets or exceeds the total loss threshold, which is different in different states: 75% of the car’s market value in Alabama, 100% of, 80% in Missouri, etc.
  2. The potential spending on the repair exceeds the Total Loss Formula Outcome, which is the fair market value of a car minus its salvage value.

In a nutshell, if you have total loss insurance, you will get paid the full current market value of your car.

How Much Would This Type of Insurance Cost You?

You would have to pay for it about $500 a year. Keep in mind, though, that total loss insurance might be a good choice if your car is your only means of transportation and you couldn’t buy a new one if your current car were totaled.

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The Total Loss Process (Simplified)

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A Complete Guide to Buying a Car With a Rebuilt Title

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Salvage Title Cars: Is the Game of Repair Worth It?

While the U.S. is known to be the largest exporter of used motor vehicles to developing countries – from 2015 to 2018, over 14 million cars, SUVs, and minibusses were exported to Africa and other low-income countries – a fair portion of those vehicles ended up being re-bought by the Americans themselves. With one of […]

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Loss of Use Insurance: on Guard of Your Financial and Moral Comfort

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Aircraft Insurance: From A to Z

The unstoppable growth of the global economy makes the aviation industry one of the most in-demand industries, even though the notorious pandemic did cut the global passenger traffic in half in just two years. Providing over 85 million jobs worldwide, carrying over 65 million metric tons of cargo annually, the world’s aircraft commercial fleet amounts […]

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