What to Expect When Your Car is Totaled

Upset driver after car accident sitting in front of totaled car

Your car got involved in a collision and got pretty wrecked up. The car was towed and the damage was evaluated by a mechanic. After getting the estimate and talking with your insurer, the insurance company declared your damaged vehicle a “total loss”. But what does total loss mean?

If you got a totaled car, there are many possible options for you. Let’s answer some of the most common questions about totaled cars and the choices you have to make when considering a total loss claim.

What Does It Mean When a Car is “Totaled”?

A car is deemed totaled if the estimated cost of repairs needed to fix the damage caused by an accident exceeds the overall value of the vehicle. Depending on the state you reside in, a car can be declared totaled if it goes beyond a certain threshold. Check your state’s laws to see if “totaled” means the damage exceeds 100% of the car’s value or if it exceeds a lesser threshold like 75%.

My Car Was Damaged in an Accident. What Happens Now?

You should be compensated for your loss if you have comprehensive coverage and collision coverage as part of your car insurance plan. Contact your insurance agent as soon as possible after a collision in order to initiate a claim. Once the damage inspected at an auto repair shop, the mechanic will provide an estimate for the repairs and send it to your insurer. The insurer will determine whether or not the vehicle is worth repairing based on the value of the car. If the cost of repair exceeds the worth of your vehicle, your insurer will cut you a check for the damaged car’s cash value, minus your deductible.

How Does the Insurance Agent Determine the Value of My Car?

Insurance agents take a lot of different factors into consideration when determining a car’s value. The most common factors include your car’s age, mileage, condition, and its resale value.

I Took Out a Loan to Pay for This Car. Do I Still Have to Pay It Off?

If you have totaled a car that you have purchased on a lease or loan, your insurance company will make your claim check payable to both you and your lender. The insurance company will leave it up to you and your lender on how to release that money.

If the claim check won’t fully pay what you owe to the lender, you’ll still be responsible for the remaining balance on your loan. However, gap insurance will pay out the remainder of your car loan on the totaled vehicle regardless of its worth at the time of the accident. If you took out a loan for a vehicle, it may be worth your while to get gap insurance on top of your car insurance policy just in case.

When Should I Expect to Get Paid?

The majority of insurers will issue you a check within days of finalizing the cash value of your damaged vehicle. However, you should always ask your insurance adjuster to get an accurate date of payment.

Can’t I Just Repair the Car Myself?

In some states, you may be permitted to keep the totaled car if you wish, particularly if you own it outright. You will have to let your insurance company know immediately so they can react accordingly. In most circumstances, your insurance company will pay you your claim then take your totaled car off your hands to auction it off for salvage and keep the proceeds of the sale.

However, if you do choose to keep the totaled vehicle in your possession, most states will require you to register it with a salvage title. You will then be responsible to ensure the proper repairs are made to the car before allowing it back on the road. Be forewarned that repaired vehicles with a salvage title are usually difficult to trade-in for other vehicles at dealerships, so keep that in mind for when you shop for a replacement vehicle. You should also know that most insurance companies won’t provide comprehensive or collision coverage for rebuilt cars with a salvage title.

Now that you know what total loss means, you may want to get better coverage in case the worst happens. Cost-U-Less can offer you great rates on comprehensive and collision coverage, gap insurance, and other car insurance policies that fit your needs at a low price. Give us a call or get a free car insurance quote online to save big money on quality coverage.