When the unfortunate happens, and your car is declared a total loss after an accident, collision coverage generally will reimburse you for the car’s value. However, it’s not just the car that the coverage may pay for. Here’s what auto insurance collision coverage will typically reimburse if your vehicle is totaled.
Understanding Total Loss
A vehicle is normally declared a total loss when the cost of repairs exceeds its current value. In such cases, collision coverage steps in to cover the vehicle’s fair market value at the time of the accident. This ensures that you are compensated for your vehicle’s value before it was damaged.
Importantly, you’ll only be reimbursed if you have collision coverage. This is the protection that applies if your vehicle is totaled in an accident. At Rich Insurance Agency LLC, we can help you choose coverages.
Components of the Reimbursement
Exactly what you’re reimbursed will be determined by your policy’s terms. In most cases, you can expect to receive compensation for:
- Fair Market Value: This is the primary amount you will receive and is based on your car’s value just before the accident.
- Sales Tax: The sales tax you would have to pay to purchase the vehicle at its fair market value. The 2024 sales tax rate for Kansas City, MO is 8.99%.
- Registration Fees: Registration costs are pro-rated, paying the remaining months’ worth of your registration.
- Car Seats: If you had car seats installed, these are also covered under collision insurance.
Your deductible will be subtracted from the total amount paid.
Learn More About Car Insurance
It’s important to understand your car insurance policy. If you have questions and are in Kansas City, MO, contact us at Rich Insurance Agency LLC for help reviewing a policy.
