Fair market value is how much the car would sell in the condition it was in before the wreck. The insurance company determines how much your car would sell for by looking at how much a vehicle like yours is currently selling. The look for identical make, model, year, mileage, and condition. If the insurance company determines your car a total loss, they will provide you with a total loss valuation. This document will list the cars that recently sold and are comparable to your vehicle.<\/p>\n

If your car has been declared a total loss after an accident, you may have two options: accept payment for the fair market value of the car or keep the car. If you accept the fair market value, you will have to give the title of the vehicle to the insurance company. By giving the insurance company the title to your wrecked car, your insurance company owns your car. Typically, the insurance company can then sell your car as, usually at an auction in a salvage yard.<\/p>\n

If you decide to accept the fair market value, your insurance company will first pay off any loans on the car and give you the balance. Unfortunately for some people whose cars get severely damaged in a wreck, the fair market value of their vehicle may be less than what they owe on the car. This means that, even after the insurance company gives the total loss payment to the car loan company, the car owner would continue to owe the remaining balance. Unfortunately, as car accident attorneys, we see this scenario too often. After a really bad car accident, a car accident victim may end up still owing money on a car that is a total loss.<\/p>\n