Is your car totaled? Depending on how the vehicle was totaled, having liability-only may not be an immediate problem. Keep reading, and we’ll explore situations where you may be covered by the other driver’s insurance.
By the end of this article, you’ll have an understanding of what types of insurance cover a totaled vehicle in common scenarios. We’ll also offer a few pointers to minimize costs when you are at fault for a collision.
What To Do If Your Car Is Totaled If You Only Have Liability Insurance
Depending on the situation, a totaled vehicle may not be your financial responsibility. There are situations where having liability-only insurance will leave you financially responsible for your own totaled vehicle.
Who Will Pay For the Accident? Understanding Fault & Insurance
Unfortunately, one common way for a vehicle to be totaled is in a collision. In most states, one driver is considered at fault for the accident. The fault is usually determined by insurance adjusters after reviewing police reports, photos, and interviews.
It’s important not to admit fault or try to assign blame after an accident. Even when you feel responsible, police reports and interviews may uncover additional details. Things like intoxication, cell phone use, and other factors will play a role in determining fault in the end.
Pro Tip: File a police report and contact your insurance company after a collision.
How to Get the Other Driver’s Insurance to Pay For Totaled Car
The only way for the other driver’s insurance to cover your vehicle is if the other driver is at fault. In that instance, their liability insurance covers the repair costs up to the actual cash value of your car.
If the other driver is at fault, you will need to work with their insurance company to receive payment. In many instances, your insurance company may help you collect the necessary information from the other driver following an accident.
How to Minimize Costs When You’re At Fault
Minimizing costs when you’re at fault begins with having a robust auto liability insurance policy. Make sure that you have enough liability coverage to protect yourself from major expenses.
Pro Tip: The state minimum liability coverage is insufficient coverage to keep you protected. We recommend having high liability limits and an umbrella liability policy to keep you covered.
In some states, your insurance rates only go up after an accident if a traffic violation occurs. If you can contest a traffic ticket and get the ticket dismissed, then you’ll save yourself from an insurance rate increase.
For example, you’re at fault for the collision, but your driving was affected by inclement weather. If the police do not issue a ticket, or the judge dismisses the ticket due to the weather, then your insurance company might not increase your rates (this is location and insurance company specific).
In a fender bender, you may choose not to file a claim and to pay for the damage out-of-pocket. For a minor parking lot bump, you could save yourself from a rate increase by paying for the damage yourself. You can also minimize repair costs by asking for estimates from multiple repair shops.
What Insurance Coverage Pays for A Totaled Car?
Which and whose insurance pays for a totaled car depends on fault. It also depends on whether the totaled car belongs to the at-fault driver or the other driver.
If the other driver was at fault, their liability insurance should cover the cost of a totaled car. If the other driver doesn’t have liability insurance or not enough, that’s where having uninsured or underinsured motorist coverage on an auto insurance policy is helpful.
We will explore how the other coverages offered on auto insurance policies cover the at-fault driver in a collision, as well as some instances where a car is totaled without being in a collision.
Collision insurance covers the at-fault driver’s vehicle repair costs. If repair costs are higher than the actual value of the car, the car is totaled. In this event, collision insurance will cover the actual cash value of the car.
The actual cash value of the car is based on the age, mileage, and condition of the vehicle before the accident. The actual cash value may not be enough to cover the remaining balance on a loan or lease.
Pro Tip: You can supply market values for comparable cars to the claims adjustor from the insurance company to maximize your payout.
Comprehensive Insurance covers the repair costs of vehicles in the event of theft, vandalism, or natural disasters. If the repair costs are higher than the value of the vehicle, or the stolen car isn’t recovered, then the insurance company will pay the actual cash value of the vehicle.
The actual cash value of the vehicle is based on the age, mileage, and condition of the vehicle before the incident. You may need additional coverage called GAP Insurance if your loan balance is higher than your car’s value.
GAP Insurance or coverage will pay or waive the remaining loan balance after insurance in a total loss. This coverage is available through a lender such as a dealership, bank, or credit union. Coverage may also be available through your auto insurance.
The following Auto Insurance companies offer GAP Coverage with their policies.
- Liberty Mutual
- The Hartford
Frequently Asked Questions
Does a totaled car hurt your credit score?
Being in an auto collision or having a totaled car does not directly impact your credit score. If you are unable to make payments on amounts owed after a collision, that may impact your credit score.
How does liability insurance protect me?
When you are at fault for an accident, you are financially responsible for the property damage and medical expenses of third parties, and liability insurance will pay those expenses for you.
Is a car totaled if the airbags go off?
Deploying airbags does not automatically total a car. A car is totaled when the cost of repairs exceeds the actual cash value of the vehicle.
How do you get a better total loss payout?
You may be able to negotiate a higher payout on an insurance claim if you can provide documentation to support a higher counteroffer. Make sure all offers and counteroffers are in writing.
Nevada Division of Insurance (2023). What Happens After Your Car Gets Totaled. Doi.nv.gov. Retrieved January 2, 2023, from https://doi.nv.gov/Consumers/Automobile-Insurance/
Progressive Insurance (2023). What Is Liability Insurance Coverage? Progressive. Retrieved January 2, 2023, from https://www.progressive.com/answers/liability-insurance/
Washington State Office of the Insurance Comissioner (2023). What Happens After Your Car Gets Totaled. Washington State. Retrieved January 2, 2023, from https://www.insurance.wa.gov/what-happens-after-your-car-gets-totaled
Jesse Cunningham V is a professional writer and licensed insurance agent. He has worked in the insurance industry in different capacities, starting as a customer service representative and working his way up to an independent agency owner. He is licensed in the states of Maryland and Pennsylvania for Property, Casualty, Life, and Health products. Jesse has worked with many national carriers, including Nationwide, State Farm, Travelers, and Liberty Mutual, and specializes in car and home insurance and health, life, accidental death, and disability insurance. He writes for multiple publications including FIXD and Bauple.com. All articles by Jesse are opinion-based. Speak with your licensed insurance agent about the particulars of your insurance before making any decisions.