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Have you had an accident recently? Was the damage to your car too great? Wondering what happens when the insurance hits your car? The reasons why an insurance company decides to withdraw a total loss from your car include:

• It cannot be repaired safely.
• It is worth less than the cost of repairs.
• The law in your state requires it due to the amount of damage.
  

The value of your car before it is damaged in an accident will help determine whether or not the insurance company will decide the total for your car. Insure.com states that some companies will decide the total value of the vehicle if the damage exceeds 51 percent of its value before the accident. However, some companies will go as high as 80 percent. This amount is generally determined by the state you live in, and they will use a formula to determine the percentage of damage that insurers can total the vehicle at.

What is the actual dollar value of your car?

The actual dollar value of a vehicle is the amount of its value when depreciation is taken into account. After you've had an accident in which your vehicle was damaged, your insurance company will have a claims auditor who will seek to assess the cost of repairs. There are a number of factors that will be considered when deciding whether or not the repair is worth it. Insurance.com shares some of these:

• mileage
• Body condition
• Internal situation
• Tires
• No parts or updates were added
  

Also, they will see the sale price of similar cars in your area. If you think your insurance provider is underestimating your car, you can ask to see what other cars they are comparing to your car. Then you can try to find the comparisons that you think are closest to the value of your car and present them to the insurance company. However, it is important to note that an insurance company will never pay you more than the actual dollar value of your vehicle (ACV).

Total replacement of your car

When your insurance company deems your car a total loss, you will likely need to find a replacement. Unfortunately, your insurance provider will not buy you a new car. They just have to pay you the ACV for the person you lost. The good news is, according to Insurance.com, many states will make insurance companies pay sales tax on your new car. Of course, they don't actually pay you for the new car you buy, but instead include it in your lost car settlement.

What is covered in terms of sales tax will vary by state, but Insurance.com shares some examples:

1. Arizona: Quick, fair and reasonable settlements must be made by all parties to claims for total loss.
2. California: Insurance companies must offer a replacement vehicle or a cash settlement equivalent to a comparable vehicle, including taxes and all applicable fees.
3. Florida: The insurance company must pay sales tax if the policy provides for the liquidation and adjustment of total vehicle losses based on the ACV or replacement value.
4. Illinois: When an agreement is reached based on the full value of the amount paid to the vehicle and the insured purchases a replacement vehicle or rents one within 30 days, the insurance company must pay the sales tax, the fee for transportation and equivalent property. of the total vehicle. If the insured purchases a car for less than the full amount, the insurance company only has to pay the sales tax, transfer fees and ownership based on the lesser amount.
5. KS: The payment of sales taxes and fees is an obligation for an insurance company in the event of claims for total losses.
6. Massachusetts: The insurance company does not have to pay to replace the collected vehicle, only the ACV before the accident.
7. New York: The insurance company will reimburse the insured for the ACV value of the vehicle, whether the damaged vehicle is replaced or repaired. This includes paying sales tax.
8. Pennsylvania: State sales tax will be paid for the cost of the replacement vehicle on the total loss when the ACV of the damaged vehicle is settled by the insured.
9. Texas: Insurance companies do not pay auto sales and use tax when they take full ownership of the car. They will pay taxes when the insured purchases a new car to replace the lost car in exchange for a total loss claim.
10. Virginia: An insurance company should only pay sales taxes, property fees, and transfer fees on third-party claims if the policy requires it.
    

This list shows how the requirements for paying sales tax vary from state to state. If your vehicle has been in an accident, you should consult the rules for this matter in your state to ensure that you receive adequate compensation when purchasing a replacement vehicle.

Keep your car total

You may want to keep your car, even after your insurance company deems it a total loss. Insurance.com states that this is a possibility, but the title will become the so-called "salvage holder." This means that you will have to make the necessary repairs to be able to drive the vehicle. The insurance company will generally sell your car to a salvage yard at auction. So if you want to keep your car, this amount will be deducted from your ACV settlement.

When considering whether or not to keep your gross vehicle, keep in mind that there is a reason why your insurance company may not want to repair it. Damages often occur in car accidents that cannot be easily seen, and once a technician begins disassembling the vehicle, you may find more repairs than you bargained for. This is the reason why insurers do not want to offer comprehensive, collision course coverage on a pre-assembled vehicle. They find it difficult to estimate the full extent of the damage.

Understanding why an insurance company considers your car a total loss after an accident and knowing what will happen next will help you get through this difficult time. While losing your car isn't the end of the world, it's good to know what your options are if that happens.