Understanding your options for a totaled car

By Insurance.com Posted : 10/16/2014

your options for a totaled car Coping with the aftermath of a serious accident can be very stressful, especially when trying to deal with your insurance company and the loss of your vehicle. However, knowing the right questions to ask, and having a realistic understanding of the situation, can be very helpful. It's time to learn how to talk with your claim adjuster about a total loss. Here's what you're likely to face if your car has been totaled in an accident.

When is a damaged car considered a total loss?

Your insurance company may decide your damaged car is a total loss if:

1. It cannot be repaired safely
2. It would cost more to repair the car than it's worth, or
3. State laws require the company to call it a total loss due to the amount of damage. This can vary from 50 percent of the car's pre-accident value in Iowa to 100 percent in Texas. Many states use something called a Total Loss Formula: the cost of repairs plus the scrap value of the car must equal or exceed the car's pre-accident value.

How does the claim adjuster decide how much my car is worth?

Your adjuster will make note of your mileage, the condition of the body, interior and tires, and any additional parts or equipment you've added. (Receipts are always helpful.) Based on the pre-accident condition of your car, your adjuster will find similar models that are for sale in your area and will base the total loss estimate on these comparable cars. This is called the Actual Cash Value (ACV) of your car.

Ask your adjuster for the details of the specific cars that are for sale or were recently sold. If you feel that your car is worth more, explain why—or try to find a car for sale that's a better match to your car.

Will the insurance company buy me a new car?

Probably not. Sadly, a new car loses some of its value as soon as you drive it home. But, some companies offer Guaranteed Replacement Cost coverage for newer cars, so you don't have to worry about how much you'll be paid—it will cover a new car. (Next time you compare insurance companies, this is one thing you may want to consider when deciding.) If you don't have this coverage, your company is required to "make you whole," as defined in your policy. This means your company will pay you the actual cash value of the car, minus the deductible for the collision coverage on your policy.

Ask your adjuster to explain the details of the total loss worksheet, so that you understand the full calculation, including how the deductible is subtracted from the total. Your payment should be enough to buy a car that's comparable to your old one.

How soon will I get a check?

Most companies will issue payment within a few days of finalizing the actual cash value. If you leased the car, payment goes directly to the leasing company. If you financed the car, the payoff amount goes to the finance company or bank—and you get the rest. Of course, if you owned the car yourself, you get the full check.

Ask your adjuster when you can expect payment—and, if your company had given you a temporary rental car, ask how long you'll be allowed to keep it. Your adjuster should give you a reasonable amount of time to find a new car.

Can I keep my car and repair it myself?

Usually a damaged car is auctioned at a salvage yard and the insurance company keeps the proceeds of this sale. If you want to keep your damaged car, and it's permitted by state law, your company will get bids from salvage buyers to set the fair market value on the salvage—and will deduct this amount from your settlement. Many states require the title to be changed to a "salvage title" which means you will not be able to register for plates until you complete the repairs and apply for a new title.

Ask your adjuster about the salvage laws in your state, and then decide if it makes sense to keep your car and repair it. While your company may call it a total loss, it may be priceless to you.

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8 Responses to "Understanding your options for a totaled car"
  1. joyce Massey 05, Jun, 2013

    I T-boned a car because the guy ran a stop sign. I only had my 1997 Pontiac GT Grand Prix for a year . Its totaled, I dont have my plate, i dont have payment and my insurance company is making me take the rental car back -I will be without a car until I receive payment. I'm changing insurance companies - They are a lousy

      Reply»  
  2. snelson 23, Mar, 2013

    I just got my car before my first payment was due I got in a car accident and it was totaled and it wasn't my fault. What does it mean totaled? And do I have to pay my payment.

      Reply»  
  3. junkcarbuyersorlando 09, Mar, 2013

    Nice blog information and I am agree with this one because selling junk cars cash is better then storing your old and waste thing.

      Reply»  
  4. Misie Rambeau 23, Jan, 2013

    my BMW was hit(only learners permit) and deemed a total loss.. It was on private property(college where I work)..I was in my office at the time..since I am the victim, will the ins take i nto consideration of all the fees on another car..lic/tranfer fees/tax, etc?

      Reply»  
  5. xavier porteus 14, Jan, 2013

    I was driving a 93' eagle summit four door dl sedan. While driving I bottomed out horribly. The car actually died a few miles after wards. And it has not been able to start since. The engine block was totaled as well as the tranny. Would I be able to collect the insurance from this? I havnt spoken to the insurance company yet. I want to male sure I have a leg to stand on.

      Reply»  
  6. lorraine 29, Nov, 2012

    my car was deemed totaled by my insurance company they cut me a check and i paid off the loan but i am still driving the car and i kept the money is my car still insured

      Reply»  
  7. Jennifer Hitchcock 04, Aug, 2012

    I paid approximately $17,000 for a new 2004 Honda Civic. Was totalled on July 31st of this year and I was totally not at fault as I was severely rear ended. My insurance company said they are sending me a check next week. I know that to find a car like mine in good condition after putting $1400 of repairs into it reently, is next to impossible with 122,000 mileage. The dealers I have talked to said they take them off the lot for auction after $100,000 miles usually. How do I get enough money from my insurance company for a new car?

      Reply»  
  8. Robin Baerga 26, Jul, 2012

    Hello, We recently made a bad secision on a settlement do to an accident that occurred. Insurance company declared it a total loss due to the fact that the repairs would cost more than the worth of the car ( 2000 honda CRV ) . However, the car still runs and its still drivable. After the obvious bad choice i made, what can i do to get a fair trade in amount towards a new car???? Need help, need options

      Reply»  

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