How long will an insurance company provide a rental car and will they pay blue book or retail value on a totaled vehicle?

Answer 1

Insurance carriers vary on how long they will provide you with a rental during a total loss settlement. A good rule of thumb is three days after they make an offer to you -- whether you agree with the offer or not. So, if you know your car is a total, and haven't started looking for a new vehicle, now's the time so that you avoid any problems.

As for the value of your vehicle, the insurance company owes you the fair market value. This is essentially what a regular person would pay for the vehicle. It does NOT include the inflated costs and charges of a dealer. Even if you're planning on buying your replacement car from a dealer, keep in mind that few of us walk onto a dealer lot and pay the dealer the sticker price.

Some companies use valuation vendors -- which come up with vehicle values -- and others use the NADA book or Kelley Blue Book. Sometimes the vendor's valuation will be the same amount as the retail value from the Blue Book; sometimes it won't. If you don't agree with the insurance carrier's valuation of your car, you need to review -- in detail --the condition of your car, its mileage, any refurbishments (like a new engine or transmission), etc with your claim representative. Those items can make a significant difference in the value of a car.

You may also want to do your own research on the value of your car. It's not enough to contact a dealer, who will simply look it up in a book. You should look at local newspaper ads or internet sites which list vehicles from your zip code.

Keep in mind, too, that the insurance carrier will not pay what you owe on your loan, if your vehicle is worth less than your loan. Again, they owe the market value. If you're upside down on your loan, contact your lienholder to discuss rolling over the remaining amount once your total loss is settled. You may have to take out a personal loan, or the lienholder may just add the remaining amount to your new car loan. If you shop wisely, you should end up about where you were prior to the loss.