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Totaled Car: What Happens If My Car Gets Totaled?

Why Does an Insurance Company Total a Car?

A Car can only take so much damage. Of course, there are circumstances where vehicles take too much damage. Be it an intense car collision, a falling tree, or a powerful storm- a car can easily be damaged beyond the point of repair.

It’s at this point that your adjuster from the insurance company declares your vehicle totaled. The car can’t be repaired because the damage is too severe or the total repair costs exceed the value of the car. Thus, the car is a total loss since fixing it would be next to pointless. It simply isn’t worth it. It is worth it to have the proper insurance and know-how to handle and replace a totaled car.

It’s Important to Know the Actual Cash Value of Your Car

Once your insurance adjuster declares your car a total loss, you’ll be given your vehicle’s actual cash value (ACV). The ACV of your car is the value of your vehicle at the time prior to the incident, which left it totaled. It takes into account year, miles, make, and time of ownership of the car into consideration. The number is determined by the insurance adjuster’s estimate, taking all those factors about your car into account.

You can also easily research the ACV of your car on your own. The actual cash value goes towards your reimbursement. So, it helps that you make sure your insurer isn’t selling your car’s value short. You are allowed to disagree with them.

What Kind of Car Insurance Covers Totaled Cars?

The type of insurance which covers totaled vehicles depends on how exactly the car was damaged in the first place. Here are a few examples of different types of insurance that can be used when you file your claim. Please note that totaled vehicles are never good for the policyholder or the insurance company. Rates will rise exponentially regardless of how severe the damage is for a total loss.

  • Comprehensive insurance - This type of insurance is for vehicles totaled by acts of nature and incidents that weren’t your fault. You’ll be reimbursed for the ACV of your car minus your deductible.
  • Collision insurance - For vehicles totaled by car crashes that you caused, collision insurance is available. Like filing a totaled car claim with comprehensive coverage, you’ll be reimbursed the ACV minus the deductible.
  • GAP insurance - Drivers often lease or finance their vehicle. When those leased cars get totaled, GAP (guaranteed asset protection) insurance saves policyholders trouble. The insurance company owes the ACV to the leasing company in that case too. That leaves you with the remaining payments on your lease schedule for a car you no longer drive. GAP insurance will cover those payments.
  • Property damage claim/liability - For a car totaled in an accident that was the fault of another, you file a property damage claim with their insurance company. Their property damage liability coverage will cover your car’s ACV.

What to Do When a Car Gets Totaled?

If you become involved in a severe car collision or wake up one morning to find a tree lying across your car, there are the steps you take with your insurance company to get you back on the road. They go as follows.

1. File an insurance claim

Contact your insurance agent and file one of the previously mentioned claims depending on the circumstance. Total loss claims take a lengthy amount of time to file-2 weeks minimum. So, it’s best to file your total loss claim as soon as possible.

2. Transport your totaled vehicle to an auto shop

It may not be safe, wise, or even possible to drive a totaled vehicle. The best method of transport for your totaled vehicle would be a tow truck or flatbed. At the same time, your insurer will recommend an approved auto body shop.

3. Documentation 

Your totaled car’s documentation is required to provide your insurance company with everything they need and fair reimbursement. This includes the title and sales receipt from when you purchased your car. The lending company will provide the leased cars’ titles and receipts.

4. New car replacement

At this point, you’ve been reimbursed or know exactly how much your insurance company will give you. In some states like Florida and California, the ACV reimbursement includes taxes and fees. Some insurance companies offer new car replacement or better car replacement coverage in the event of a total loss.

Can You Keep Your Car if it’s Totaled? 

Few states have restrictions on whether you may keep your totaled vehicle and do the repairs yourself. Your insurer will deduct the salvage value of the car from your reimbursement. A car’s salvage value is paid to the insurance company when the totaled vehicle is taken to a junkyard. Realistically, there’s no such thing as minor damage for a totaled vehicle. Know that even if you pay the hefty repair fee comparable to buying a new car, you still risk yourself and your passengers’ safety.

Simultaneously, there’s a lot of bureaucracy involved in getting a totaled vehicle back on the road. Your vehicle will need to be issued a new title- branded, salvage, or a salvage certificate. These titles certify that your car has essentially been rebuilt. There are several fees associated with a car inspection and titling. Most of which are pretty substantial. The total loss of the vehicle is now a permanent part of your car’s report. Cars with these kinds of markups are extremely difficult to sell. It’s even harder to find insurance that will cover the vehicle.

I’ve heard that if my airbags are deployed, then my car is a total loss. Is that true?

Regarding your airbags, it’s a misconception that when they deploy, your car becomes totaled. In some instances of collision, airbags may deploy, but that doesn’t necessarily mean your vehicle is totaled. Again, the declaration falls on your insurance adjuster to make their assessment of the damage.

If the cost of replacing the airbags exceeds the car’s ACV, then it’s totaled. If not, then the airbags may be replaced. Know that airbag replacement typically costs $1000 for each individual airbag. There are all sorts of small moving parts and modules in a car that also must be replaced in the process.

What if your missing or don’t have any of your car’s documentation or insurance?

If you’re unable to provide your totaled vehicle’s title and sales receipt, then copies of the title can be requested from the DMV. The DMV can also give you the rules and regulations of getting a totaled vehicle back in working condition. Finding the sales receipt may prove to be more difficult. But, the dealership where you purchased or leased your car may have a record of your transaction.

With no comprehensive or collision insurance, you will not be reimbursed for your totaled vehicle’s ACV. The wisest move would be to sell the totaled vehicle. If there’s a party at fault with insurance, then their property damage liability would cover your damages.

How do You Accurately tell Your Totaled Car’s Value and Negotiate with the Insurance Company?

Again, you want to find the value of your car before it was totaled. There’s a multitude of online car guides like NADA and Kelley Blue Book. By comparing and contrasting car values, you may be able to find an average. With that number in mind, it would be easy to see if your insurance company is reimbursing you with a low ACV for your car.

Upon receiving the settlement offer from your insurer, send them all your research in appraisals and a counteroffer. Your research plays the role of evidence here. You can also contact your state’s insurance regulator for assistance. Lawsuits should only be used as a last resort. Besides, a large percentage of lawsuits are never worth it in the end because of the costs. Independent appraisals are usually significant in swaying your insurance company to pay you a fair price for your car.

How a totaled car can affect your insurance premium

A car being totaled can drastically affect your premium, along with your driving record. Some insurance companies make notes of this and can raise your rates. Some companies offer accident forgiveness insurance, but it is limited in some states and insurers. As stated before, totaled vehicles are never good for insurance. It’s a lengthy and, at times, expensive process. That’s why it’s essential to have at least one kind of insurance covering you in the total loss of a car. The other half of the battle is knowing what to do, which we have fully covered.