That depends on the type of policy you have purchased. If you went for Fully Comprehensive Auto Insurance, then there is a good chance that you will have a replacement. This type if policy is definitely the most expensive but on the contrary, it is also the most commonly purchased. The coverage is also broad and includes everything from theft to road mayhems. There is even no need for the policy holder to prove or present facts of his accident just to have his claim.
However, with regards to car replacements, do remember that car insurance companies base this on your car’s actual cash value and never to the cars value the time it was purchased. This only means that there is a possibility that the company will just issue a check with the amount basing on the value of the car less its depreciated value. We all should be reminded that as the minutes goes by, the value of the car we drive depreciates too.
Another thing to keep in mind is the fact that policies differ from company to company so reading the contract before affixing your signature is a must. More often than not, companies refuse to insure 100% of the total value of the vehicle (most especially if it’s under vintage or luxury car category). Most opt for only 80%. This is done by companies to prevent fraudulent owners claiming losing their cars when in reality, they are just bored with their current cars.
A car’s actual cash value is determined through comparing its condition to other vehicles similar to its kind. The calculation will also include input and information from private parties, local auto dealers and recent sales. Nowadays, it is common for companies to make use of computer aided computations to determine the actual cash value of a vehicle. Companies usually purchase what they call a third party computer system (an example of which is the CCC) to make things easier for them.
But, policy holders should take note that replacement of totaled cars usually does not include cars that are 20 years (or older) old already. If you have the fondness to drive these types of vehicles, you might need special type of policy that insures “classic vehicles” in their coverage. But even if companies claim to replace totaled cars from accidents, it is always good to be safe on the road to avoid accidents of this kind and much better to keep one’s self alive.