The insurance company pays the owner of the car if there are no liabilities.

The insurance money goes to the financing company if the car was financed and the loan hasn't been repaid.

In the third scenario when the insurance money exceeds the loan left, the excess goes to the owner of the car.

Before the insurance money can be paid out to whichever party needs to receive it, a claims adjustor first calculates the cash value of the car. After the accident, the car owner is usually required to take out all personal items and give the key of the car to the adjustor who then studies the car to determine its cash value. Cash value of a totaled car generally depends on lot of parameters. The first and the most important parameter is the mileage of the car. If the car is relatively new with fewer kilometers on road, it is implied that it is relatively new and in good condition. This means the cash value of the car would be higher. The opposite is true for a car with more kilometers on road.

Usually it is advisable to keep the receipts of all extra accessories bought for the car. Special seat linings, sound system, speakers etc. all enhance the value of the car provided their cost can be proved to the insurance company. Finally the claims adjustor will come up with a cash value which then goes to the appropriate party, the owner in some cases, or the financing company in other cases if the loan repayment is still outstanding. The car can then be sold by the insurance company to salvage buyers. One can keep the totaled car for whatever reasons by paying out the salvage money to the insurance company. The amount paid by the insurance company also includes the taxes as per the state rules. Since insurance companies always try to reduce the insurance amount, it isn't a bad idea to negotiate a better value than what they are willing to pay for the totaled car.

Generally, if the insurance terms also include rental coverage, one can ask the insurance company for a rented car for a few days until you can manage to get a new vehicle for yourself. Although, this term would be around a week or so, one can always manage to get a few more days out of the insurance company. A totaled car is generally not pleasant for the owner, but having a proper insurance and enough negotiation can ensure one doesn't lose out financially.

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One of the more important factors that are looked into in determining your car insurance rate is your credit history. Especially when the economy has taken the downturn, insurance companies would like to ensure that their assured are able to pay their insurance premiums. This is why your credit history is a factor in either increasing or lowering your insurance rate.

This is no wonder as figures reveal that individuals who have bad credit history are most likely to file claims than those who are not. Certainly, filing claims are the least that insurance companies would want from their assureds. Of course, this is not to mention that individuals who are delinquent in settling their bills pose higher chances of delinquency in paying their auto insurance premium as well.

Your credit history is seen by insurance companies as a reflection of how responsible you are. This responsibility is not limited to paying your bills but also to how careful you are as a driver. No insurance company would want a driver that is irresponsible and prone to accidents. They are regarded as high risk and therefore the insurance rate is also generally higher than those who are considered as low risk.

If you are able to maintain a clean credit record, insurance companies will view you as minimal risk and therefore reward you with lower insurance rate and the leverage to get discounts on your insurance premium. Of course, insurance rates and discounts are also dependent on factors other than your credit history.

Here are a few things that will help you use your credit history to your advantage in lowering your car insurance rate:

Evaluate your credit history and start cleaning it up. This means, pay your bills on time. If you are confronted with multiple credit obligations, you may want to consider debt consolidation. As far as your habit is concerned, spend less than what you earn. This is the basic and most important law in your credit life.

If you do not have a credit history to begin with, get one. Having no credit is also regarded by insurance companies as being the same as having bad credit. When you do not have any credit history at all, insurance companies will oftentimes consider you as insignificant. It is always better to have some credit history, and best to maintain a reputable credit history.

Improve on your credit rating and history and you get to enjoy lower auto insurance rate and premium. The rule in insurance is your insurance rate depends on the risks that are involved in your policy. The lower the risks, the lower the rate can be. Similarly, the higher the risk the higher the insurance rate can get.

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