- What happens when your car is totaled?
- When is a car considered totaled?
- 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?
- What if insurance wants to total my car but I want to keep it?
- 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 adjuster 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 deductible as long as you have collision coverage (or comprehensive coverage if the damage wasn't caused by a crash.)
When your car is totaled, you have a few options:
- Take the payout. If you’re good with the check and ready to move on, cash it and go car shopping. Your insurance company will keep the car and likely sell it to a salvage yard.
- Appeal the settlement. If you think the payout is too low, you can appeal the insurance company’s settlement and try to get more money for the car.
- 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.
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.
When is a car considered totaled?
When exactly do insurance companies total a car?
Simply put, the definition of totaled is that the repairs are expected to cost more than the car's value, it will be totaled.
Your insurance adjuster will note your mileage, the condition of the body, interior and tires, and any additional parts or equipment you've added. Then, based on the pre-crash condition of your car, your adjuster will find similar models for sale in your area and establish the total loss estimate on these comparable cars. This is called the actual cash value (ACV) of your car.
Your insurance company may decide your damaged car is a total loss if:
- It can't be repaired safely
- Repairs would cost more than the car is worth
- State laws determine the exact definition of a totaled car based on a percentage of the car’s value or a specific calculation. This total loss threshold varies from 50% to 100% of the car's pre-accident value, depending on the state. Many states use a Total Loss Formula (TLF): the cost of repairs plus the car's scrap value must equal or exceed the car's pre-accident value.
Below, you'll see Total Loss Formulas and total loss threshold by state.
| State | Rule | What you should know |
|---|---|---|
| ALABAMA | 75% | The vehicle is considered a total loss if the damage is greater than 75% of its fair retail value prior to damage. |
| ALASKA | Total Loss Formula (TLF) | The car is considered a total loss if the cost of repairing damage to the vehicle exceeds the vehicle’s worth or insured value. |
| ARIZONA | Total Loss Formula (TLF) | The insurer determines if it is uneconomical to repair the vehicle. |
| ARKANSAS | 70% | Considered total loss if damage to the vehicle is greater than 70% of fair retail value prior to damage or the vehicle is water damaged. |
| CALIFORNIA | Total Loss Formula (TLF) | A vehicle is a total loss when the cost of repair exceeds the vehicle's value before the repair. |
| COLORADO | 100% | Cost of repairing the vehicle exceeds the retail fair market value. Retail value is determined by sources accepted by the insurance industry. |
| CONNECTICUT | Total Loss Formula (TLF) | The cost of repair exceeds fair retail market value. Insurers must use NADA** average and one additional approved source. |
| DELAWARE | Total Loss Formula (TLF) | The insurer determines if the vehicle is a total loss. |
| DISTRICT OF COLUMBIA | 75% | Damage to the vehicle exceeds 75% of retail value prior to the damage. |
| FLORIDA | The insurer determines whether the vehicle is a total loss. | The insurance company can declare your vehicle a total loss if they think it’s cheaper to do so than to repair it. If you and the insurance company agree to repair the vehicle instead of replacing it, it won't be considered a total loss. However, if the repair costs exceed 100% of the car's value, it must be labeled as a "Total Loss Vehicle." |
| GEORGIA | Total Loss Formula (TLF) | Vehicle is damaged to the extent that its restoration to an operable condition requires replacing two or more major component parts. |
| HAWAII | Total Loss Formula (TLF) | The insurer determines if a vehicle is repairable or a total loss. The vehicle must have material damage to its frame, unitized structure, or suspension system, and the cost of repairing the damage must exceed market value. |
| IDAHO | Total Loss Formula (TLF) | The cost of parts and labor minus the salvage value makes it uneconomical to repair or rebuild. |
| ILLINOIS | Total Loss Formula (TLF) | The insurer determines when a vehicle is a total loss. Must not be from hail damage or a vehicle that is nine model years or older. |
| INDIANA | 70% | The cost to repair the vehicle is greater than 70% of fair market value prior to damage or the insurer determines it is impractical to repair and makes a total loss payment. |
| IOWA | 50% | Damage disclosure requirements kick in at 50%. If the cost to repair the vehicle is greater than 50% of ACV then the vehicle must have a damage disclosure on the title and it becomes "wrecked or salvage vehicle." |
| KANSAS | 75% | The cost to repair the vehicle is 75% more than the fair market value at the time immediately before it was wrecked. |
| KENTUCKY | 75% | The cost of parts and labor to rebuild the vehicle to pre-accident condition exceeds 75% as set forth in NADA** price guide. |
| LOUISIANA | 75% | Damage equivalent to 75% or more of the market value as determined by NADA**. |
| MAINE | Total Loss Formula (TLF) | The vehicle is salvaged when the insurer declares it a total loss or a salvage title is issued. The owner transfers the vehicle to the insurer due to damage or the owner determines it has no marketable value. |
| MARYLAND | 75% | Cost to repair the vehicle exceeds 75% of the fair market value. |
| MASSACHUSETTS | Total Loss Formula (TLF) | The insurer determines if it is uneconomical to repair the vehicle and the vehicle is not repaired. |
| MICHIGAN | 75% | If the cost of repair, including parts and labor, is between 75% and 91% of the actual cash value, then a salvage title is given. |
| MINNESOTA | 80% | Damage to late-model vehicles (newer than six years old) or high-value vehicles (over $5,000) exceeds 80% of their actual cash value. |
| MISSISSIPPI | Total Loss Formula (TLF) | The vehicle cannot be more than 10 years old, have a value of less than $1,500, or damage that requires replacement of five or few minor components. Also, applies to a vehicle that requires the replacement of more than five minor component parts according to the insurer. |
| MISSOURI | 80% | Vehicle less than 6 years old and if damage exceeds 80% of the fair market value. |
| MONTANA | Total Loss Formula (TLF) | The insurer determines if the vehicle is a total loss. It is a salvage vehicle if the insurer decides it is uneconomical to repair, considering parts and labor. |
| NEBRASKA | 75% | Late-model vehicle damage exceeds 75% of the retail value at the time it was wrecked, damaged, or destroyed. "Late model vehicle" means a vehicle that has (a) a manufacturer's model year designation of, or later than, the year in which the vehicle was wrecked, damaged, or destroyed or any of the six preceding years. |
| NEVADA | 65% | Vehicle damage exceeds 65% of the fair market value. |
| NEW HAMPSHIRE | 75% | Cost for vehicle repair is 75% or more of its fair market value prior to being damaged. |
| NEW JERSEY | Total Loss Formula (TLF) | The insurer determines if it is "economically impractical" to repair the vehicle or cost of repairs is higher than the market value of the vehicle. |
| NEW MEXICO | Total Loss Formula (TLF) | The insurer determines if it is uneconomical to repair vehicle. |
| NEW YORK | 75% | The cost to repair the vehicle is 75% or more of retail value prior to being damaged by a nationally recognized compilation of retail values. |
| NORTH CAROLINA | 75% | The cost of vehicle repair is 75% or more of its fair market value prior to being damaged. |
| NORTH DAKOTA | 75% | Vehicle damage exceeds 75% of the retail value of the vehicle determined by NADA**. Glass and hail damage are excluded. |
| OHIO | Total Loss Formula (TLF) | The insurer determines if it is economically impractical to repair the vehicle. |
| OKLAHOMA | 60% | The cost to repair damage to the vehicle exceeds 60% of fair market value. |
| OREGON | 80% | Damage to vehicle is equal to or more than 80% of retail market value. |
| PENNSYLVANIA | Total Loss Formula (TLF) | The extent of repairs to the vehicle would exceed the value of the repaired vehicle. Doesn’t include antique or classic cars. |
| RHODE ISLAND | Total Loss Formula (TLF) | The insurer decides if a vehicle is totaled, there are two classifications, A and B. A is the vehicle is good for parts only and B is the vehicle is repairable. |
| SOUTH CAROLINA | 75% | The cost of repairing the vehicle exceeds 75% of the fair market value of the vehicle. |
| SOUTH DAKOTA | Total Loss Formula (TLF) | Insurer or self-insurer determines a total loss. |
| TENNESSEE | 75% | Damage to vehicle equal to or more than 75% of retail market value as determined by current published retail costs. |
| TEXAS | 100% | If the total cost of repairs exceeds the ACV of the vehicle, then it is a salvage vehicle. |
| UTAH | Total Loss Formula (TLF) | Insurer makes the decision whether a vehicle is declared a non-repairable vehicle. Or, two or more major components suffer major damage. |
| VERMONT | Total Loss Formula (TLF) | Insurer makes the decision whether a vehicle (less than 10 years old) is declared a total loss. |
| VIRGINIA | 75% | The cost to repair late model vehicle exceeds 75% of ACV prior to the vehicle being damaged, then the vehicle is issued a non-repairable certificate or a salvage certificate. |
| WASHINGTON | Total Loss Formula (TLF) | The insurer determines whether the cost of parts and labor plus salvage value has made it uneconomical to repair and the vehicle is more than 6 years old. |
| WEST VIRGINIA | 75% | The cost to repair the vehicle is greater than 75% of the market value determined by a nationally accepted used car value guide. |
| WISCONSIN | 70% | Damage exceeding 70% of fair market value will render a vehicle less than seven model years old a salvage vehicle. |
| WYOMING | 75% | For the vehicle to be in pre-accident condition, labor to rebuild and parts exceed 75% of the ACV of the vehicle. |
*Fair market value
**National Automobile Dealers Association
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.
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.
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.
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.
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
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.
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
What is a totaled car?
The term totaled means that the car is a total loss, which is the official terminology the insurance company will use. A total loss means that the insurance company is not going to repair your car; it's been determined that it's not worth the expense.
If you have the right insurance — collision or comprehensive, depending on the reason for the total loss — your insurance company will instead pay out the actual cash value of the car before it was damaged.
What happens to the title when a car is totaled?
If your car is totaled, you will need a salvage title to drive again. However, the legality of driving with a salvage title varies across states. It is best to check with your state's Department of Motor Vehicles so that you know exactly what happens to the title of a totaled vehicle.
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.
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.
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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