Serious accidents lead to seriously complicated auto insurance claims

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Whether a tree fell on your '94 Buick and destroyed everything but your muffler, or a semi ran a red light and buckled the chassis on your newly leased Prius, you likely have dozens of questions about what to do next.

How will your auto insurance company determine your damaged car's current worth? Can your car be repaired, or will you have to give it up because it's a total loss? How will your repair estimates be determined?

How does my insurance company determine repair costs?

Your insurer will determine the actual cash value of your vehicle (before it got smashed), according to the Insurance Information Institute, by using a variety of references like Edmunds' True Market Value Appraiser, Kelley Blue Book or the National Association of Automobile Dealers' reference manual. The insurance company adjuster will verify your loss and figure out how much it will cost to fix your vehicle. If repairs (such as using new parts) would increase your car's value significantly, your insurance company may reduce your claim.

The adjuster doesn't make these decisions in a vacuum. He or she also will consult with a body shop, which may provide a so-called "supplemental" estimate. This second repair estimate takes into account damage your auto insurance company may not have detected during the first pass, according to Progressive Insurance. For instance, the body shop mechanic may discover that your chassis is warped, increasing the repair estimate. Eventually, your claims representative and mechanic will agree on a price for repair.

Your car's value also will be influenced by its condition before the crash. If your car already had a lot of mileage and wear-and-tear, it will be less valuable than, say, the Blue Book value. However, if you made improvements to your car or own a special-edition model, it actually may be more valuable than your insurance company's estimate would suggest, according to Edmunds.

What if my car is totaled?

In some cases, an insurer may declare the car a total loss. You likely will be offered cash for the vehicle, and the insurer will sell it for salvage. According to Progressive, fewer than one of every five customer claims are declared a total loss. To determine whether a vehicle is totaled, the insurance company considers the actual cash value, the cost of repair and the salvage value. If it would cost more to repair than it would to pay you cash and salvage it, the car will be declared a total loss.

If you disagree with your auto insurance company's numbers, you have resources at your disposal to dispute them. Your insurance company usually has an internal process to deal with challenged claims. Alternatively, you can work with an outside public adjuster to resolve the debate with your insurer.

Finally, you might consider getting a special kind of auto insurance known as "rental reimbursement insurance." This kind of policy will pay for your rental car while your insurance company runs the numbers on your wrecked car.

See how much you could save today on your car insurance. Get your free auto insurance quotes today!