Updated: May A car is generally considered totaled when the cost to repair the car exceeds the value of the car. In other cases, the insurer determines whether a vehicle is considered a total loss. Quality Auto Coverage Starts Here. Get a quote Find an agent. If you're involved in a car accident, there are a few basic steps to follow before and after your vehicle is considered totaled: Contact your agent and initiate an insurance claim.
Your insurer will determine whether the vehicle is a total loss, based on repair costs. Your insurer will issue payment for the actual cash value of the totaled vehicle, minus your deductible on your comprehensive or collision coverage. Rental Reimbursement Coverage.
This content is for informational purposes only and may not be applicable to all situations. Coverage subject to terms, conditions, and availability. Policy issuance is subject to qualifications. Connect With Us. Update Below. ZIP Code. City, State Set Your Location. You have entered an invalid ZIP. Please try again. Location data not available. Please enter zip code. Please Wait Updating Location The adjuster's job is to determine how much their company should pay out on the claim.
The adjuster may conclude that your car is totaled, or a total loss, if it isn't worth repairing or isn't repairable at all. Insurance companies have their own formulas for making that determination. Claims against the other driver will fall under their policy's property damage liability coverage. If your policy is the one that will be paying for the damage to your car, either your collision coverage or comprehensive coverage —if you have any—will be involved.
Collision coverage is for damage to your car caused by an accident with another vehicle, while comprehensive coverage is for damage caused by something else, such as a fire or fallen tree.
If your car is totaled, here are seven ways you might consider handling it. The easiest way to deal with a totaled car after an accident may be to simply let the insurance company pay you.
Depending on the insurance laws in your state, this might involve:. Note that if you believe the insurance company's offer is too low, you can challenge it. If you opt for a cash payment and still owe money on a car loan, the insurance company will generally make the check out to both you and your lender. After your loan has been paid off, any remaining money is yours to keep. However, if the insurance company's payment is less than you owe on the car, you are responsible for paying the difference.
In some cases, a totaled car may still be drivable. If it is, then you may choose to keep it and continue to use the car as-is. This might be something you'd consider if you don't have collision or comprehensive coverage to pay for repairs.
If you decide to keep driving a totaled vehicle, have it checked out by a mechanic first to make sure it's safe to do so. Another option if your car insurance won't pay for repairs is to keep the car and use it for spare parts. This might be worth considering if the make and model of your totaled vehicle are similar to those of another car you own.
If not, you could sell off spare parts that are still in good working order to other people who own the same type of vehicle. If you don't want to go through the trouble of selling individual parts from a totaled vehicle, you could sell it to a junkyard or salvage yard instead. Salvage yards can pay you cash for your totaled car, and they may also pay to have it hauled away for you. Donating a totaled vehicle to a nonprofit organization is another option.
There are a number of charities that accept vehicle donations, including cars that have been totaled, to support their operations. An added benefit of donating a totaled vehicle to charity is that you may be able to claim it as a tax deduction. To support your tax deduction, be sure to get a receipt showing the date of your donation and the name of the nonprofit organization. If you're planning to buy another car, the dealership may allow you to use a totaled vehicle as a trade-in.
It's a good idea to get a professional appraisal of the vehicle to make sure a dealer is offering you a fair amount in trade. A final option for dealing with a totaled car is paying to repair it yourself. You will type in all the information about your vehicle, including make, model, mileage and VIN number, as well as extras added to your vehicle such as upgraded speakers or stereo system, high-dollar rims, specialty tires, etc. You should end up with approximately the same amount your insurance company will offer you in the event your vehicle is declared a total loss.
The takeaway here is that while your car may be priceless to you, there is a firm system which determines the actual cash value, and the decision as to whether your car will be declared a total loss is based on the ACV of your vehicle and the amount of repairs necessary. The above information assumes you own your vehicle outright, and it is not financed.
Of course, if you own your vehicle, the check for your totaled car goes directly to you. If your car is financed, the finance company receives the amount you owe them first, and if there is anything left over, you will receive the balance.
If the settlement amount is less than what you owe, you will still be responsible for paying the remainder of your loan balance. If your insurance company is telling you your vehicle is a total loss, and you strongly disagree with their assessment, it could be beneficial to speak to a personal injury attorney who can ask the necessary questions to ensure your rights are protected following your auto accident.
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