What Happens When Your Car is Totaled?

Today, we’re going to be talking about what happens when your car is totaled. There are five key things that’ll happen if your car is totaled either by an accident or by something else. 

First, if your car is damaged or stolen, you’ll have to file a claim with the correct type of coverage. For example, if you caused an accident that damaged your car, you’ll need to use your own collision coverage. Or, if your car is stolen, you’ll file the claim with your own comprehensive insurance.

Next, the insurance company will need to investigate the claim. Insurance adjusters will determine the cause of the incident and make sure it isn’t fraudulent. Your insurance company will also inspect your vehicle’s damage. Depending on your state’s laws, your car may be declared a total loss if the cost to repair the damage is more than a certain percentage of the vehicle’s worth, 75% for example. In some states, your insurer may total the car if the cost of repairs is simply more than the vehicle is worth, though.You should have a decision about your car’s status and whether your claim is approved within about a month. 

Third, you’ll need to decide what you want to do with your totaled car. If your insurer keeps the car, they’ll sell it for scrap or sell it at auction to someone who repairs previously totaled vehicles. You may be able to keep your car, but it’s going to be difficult to drive it again without a lot of repairs and you’ll get less money from your insurer.

Fourth, you can accept the insurance settlement. Your insurance company will only pay the actual cash value, minus any deductible. Your insurer may then sell the car for scrap or salvage. However, if you disagree with how much your insurer is saying your car is worth, you can negotiate and try to get a fairer valuation. 

Lastly, if your car was financed, you can use gap insurance to pay off the remaining loan or lease balance. Having full coverage insurance is the best way to make sure you’re covered if your car is totaled, regardless of who is at fault. I hope you enjoyed this session on everything you need to know about What Happens When Your Car is Totaled? So always be sure to contact a professional before making any financial decisions.