What happens to the deductible when replacing a total loss vehicle?

When a vehicle is declared a total loss, the deductible typically comes into play based on the policy terms. In such cases, if the insured has a deductible stated in their policy, that amount must be paid by the insured. This means that when the insurance company issues a settlement for the total loss, the final payout will usually be the actual cash value of the vehicle minus the deductible amount.

This process ensures that the insured has a financial stake in the policy and promotes responsible ownership. The responsibility for the deductible rests with the insured unless there are special circumstances or provisions in the policy that would otherwise address the deductible. In most standard insurance agreements, the insured’s obligation remains consistent regardless of whether they are claiming a total loss or making other claims.

In contrast, options that suggest the insurer covers the deductible, waiving it, or not including it in settlements do not align with standard practices in auto insurance and would therefore not apply in this situation.