- What happens when your car is totaled?
- What happens when your car is totaled but still drivable?
- How long does it take to get the insurance check for a totaled car?
- How to get the most money from insurance for a totaled car
- When a car is totaled, what happens to the title?
- Frequently asked questions: Totaled cars
What happens when your car is totaled?
When your car is totaled after an accident, it means the insurance company has determined that repair costs are too high to make the vehicle worth repairing.
Following an accident, an insurance adjusterAn adjuster handles claims for the insurance company. They assess the damage and determine how your coverage applies to damages and injuries. inspects the car to determine whether it is worth fixing. In many cases, the insurance company takes the adjuster's findings and makes its own judgment about whether to repair the vehicle. However, in some states, the vehicle is determined to be a total loss if the cost to repair it exceeds a specific percentage of the car's value.
If you were at fault for an accident or something else happened that caused your car to be totaled -- such as a tree falling on the car and crushing it -- your insurance company will pay you the value of the vehicle minus the deductibleThe deductible is the amount you pay out of pocket for a covered loss when you file a claim. as long as you have collision coverageCollision coverage helps pay for repairs or replacement of your car if it's damaged in an accident, regardless of who is at fault and is subject to a deductible. (or comprehensive coverageComprehensive coverage helps pay for damage to your car caused by events other than a collision, such as theft, fire, vandalism, or natural disasters. It is subject to a deductible. if the damage wasn't caused by a crash.)
When your car is totaled, you have a few options:
Take the payout.
If you feel that the settlement offered by your insurance company is fair, you can accept the payout. If your car is financed, the check will go to your lender directly. If it's paid off, you'll get the check. Either way, the insurance company will take your deductible out of the total. The deductible you pay depends on whether the claim was covered by comprehensive or collision coverage, although most people carry the same deductible amount for both.
You'll then transfer ownership of the vehicle to the insurer, which will sell it for salvage.
Appeal the settlement.
If you aren't happy with the insurer's offer and believe your car is worth more than the insurance company has calculated, you have the right to appeal the decision.
To get more for your car, be prepared to show why its value is higher than the settlement offer. This may include documentation of the condition, upgrades and mileage on the vehicle and proof of the market value of a car like yours.
Keep your salvaged car.
Some states will allow you to keep the car. The salvage value of the car (what the insurance company would get from selling it to a salvage yard) will be deducted from your settlement check. If you choose to keep it, you can:
- Sell it to a junkyard. Most junkyards will buy salvaged cars for scrap metal. The upside is they will also usually transport it for you.
- Trade it in. Some dealerships will accept trade-ins with a salvage title, though you're not going to get the best amount for it.
- Repair it yourself. If you want to keep your car, you can repair it yourself. If the damage is mainly cosmetic, like hail damage, it may not even need repairs. However, insurance costs for a salvage title are usually higher.
- Donate it to charity. If all else fails, you could donate the vehicle to charity and claim a tax credit. Charities accept donations of cars even if they aren’t drivable.
PEOPLE ASK
What happens if my car was totaled in an accident that wasn't my fault?
If someone else was at fault for the damages that caused your car to be totaled, their insurance company will pay the totaled car's value.
What happens when your car is totaled but still drivable?
If your totaled car is still drivable, you might be able to keep it, depending on what the law says in your state.
If you have this option and exercise it, you will likely receive a check from your insurer for the car’s value minus its salvage value. This is the amount of money the insurance company would receive if it sold the vehicle to a salvage yard.
However, vehicles in this situation typically have a salvage or branded title. That means that getting insurance for the vehicle or trying to sell it could be challenging.
What if insurance wants to total my car but I want to keep it?
In most states, you can keep your car after it has been totaled. In that case, the insurance company will subtract the salvage value of the car from the settlement, and you can keep it. It's important to be aware that keeping a totaled car can present challenges.
First, if you want to drive it, you will need to repair and insure it. In some cases, such as hail damage, repairs may not be necessary. However, you will still need to make sure it's roadworthy so you can register and insure it. A totaled car will often have a salvage title, which can make it harder to get insurance.
You can also choose to sell your car for salvage yourself or part it out, but this may be more effort than it's worth.
PEOPLE ASK
Why do insurance companies total cars with little damage?
Cars have become more complex, with sensors, cameras and computer systems throughout, which means that a small accident can sometimes do very expensive damage, even if it doesn't look that bad.
What happens when your car is totaled and you still owe money?
If your insurance policy covers the damage to your vehicle, the check you receive will likely be in an amount that reflects your vehicle's current fair value. This may or may not be enough to help you pay off the car loan completely.
If your auto insurance does not cover the type of event that caused your vehicle to be totaled — or if your car's value is lower than the amount left on your car loan — you will be responsible for paying off the balance of your loan, even if the vehicle was declared a total loss.
How long does it take to get the insurance check for a totaled car?
Most companies will issue payment within a few days of finalizing the actual cash value amount. However, how long it will actually take depends on the insurance company. Some insurers may take just a few days, while others may take up to 30 days. Some states have requirements limiting insurance companies' time to process claims, ensuring you get your payout faster.
PEOPLE ASK
What can I do if insurance is not paying enough for my totaled car?
You have the right to appeal an insurance settlement on a totaled vehicle if you think it's too low. Ask your adjuster what the process is with your car insurance company. You may need to provide an appraisal.
Who gets the insurance check when a car is totaled?
If you financed the car, the payoff amount goes to the finance company or bank, and you get the rest. If you own the car yourself, you get the entire check.
How to get the most money from insurance for a totaled car
To get the biggest check possible for your totaled car, you want to make sure your insurer understands its real value. Consider getting written quotes from local car dealers who can state how much money the make, model and year of your vehicle would likely command in the used-car market.
Also, remember to remind your insurer about any special features or custom parts that would boost your car's value.
Present all this information to your insurer either before the adjuster arrives or after you receive a settlement amount that you feel is low.
When a car is totaled, what happens to the title?
The title is usually transferred to the insurance company. The company will then sell the totaled vehicle for its salvage value. If the car is no longer drivable, it will likely be parted out, but if it can be driven the title may be branded as "salvage."
The same thing will happen to the title if you decide to keep your car after it has been totaled. A car with a salvage title can be more difficult to insure.
PEOPLE ASK
Is it better to have a car totaled or repaired?
It really depends on the type of damage. Some damage can't be repaired to the point where the car is safe to drive. And any time the cost to repair exceeds the cost of the vehicle, the insurance company will total it whether you want to repair it or not. Even if you keep it and repair it, the car was still totaled.
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Leslie Kasperowicz
Executive editor.
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Sources :
- Texas Department of Insurance. "Hold on! My totaled car is worth more than insurance wants to pay." Accessed June 2024.
- Kelley Blue Book. “Totaled Car: Everything You Need to Know.” Accessed June 2024.
Frequently asked questions: Totaled cars
Where do totaled cars go?
Insurance companies sell totaled cars to salvage yards, where they are used for parts or crushed.
What happens to registration when a car is totaled?
If you want to keep driving your totaled car, it will first need to be repaired and pass an inspection to ensure it is roadworthy. At that point, you will likely receive a rebuilt or salvage title, and you will need to take the title and proof of inspection to your local Department of Motor Vehicle so you can register the car.
What happens if a leased car is totaled?
The insurance policy will pay out the car's value. That amount is first used to cover any outstanding lease payments. Typically, money is still owed to the lease company.
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