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What Is a Totaled Car?

totaled car
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Even the best drivers can be involved in an accident, so it’s essential to know some basics about automobile insurance. At-fault states require drivers to carry minimum liability insurance to cover damages under bodily injury and property damage. In a no-fault state, you’re responsible for your own insurance coverage regardless of who causes the accident. The types of insurance coverage will also be a factor if you’re involved in an accident. Let’s examine what happens if your accident results in a totaled car.

What Is a Totaled Car?

An insurance company may label a vehicle involved in an accident as totaled or a total loss. Essentially this means that the cost to repair your vehicle is more than the vehicle’s total value. Your insurance company will inspect the damage before officially declaring it a total loss. The vehicle’s value is based on several factors: year, make, model, mileage, and condition.

The value is not determined by the amount owed on the vehicle; sometimes, you may owe more on your vehicle loan than what it’s worth. When the damages to your car exceed a certain percentage of your vehicle’s value, the insurance company will list it as a total loss.

How Does Your Insurance Policy Cover a Totaled Car?

If the accident occurred in an at-fault state and the other driver caused it, their insurance will pay you the value of your totaled car. Their property damage liability coverage will pay you up to their policy limit. If a driver hit you with no or inadequate insurance, or if you’re the at-fault driver, the following insurance coverages will protect you:

Uninsured/Underinsured Motorist Property Damage

When the other driver is at-fault but lacks adequate coverage to pay for the value of your totaled car, your uninsured/underinsured motorist property damage coverage will go into effect. For example, if the other driver has a policy limit for property damage liability of $25,000 and the value of your vehicle is $32,000 at the time of the accident, your insurance policy will pay the overage of $7,000. If that driver has zero property damage liability insurance coverage, your policy will pay the total amount up to your policy limit.

Collision Coverage

If you hit an object such as a fence or are the at-fault driver in an accident with another vehicle, your collision coverage will pay for the damages to your vehicle. When damages exceed the percentage of your vehicle’s value resulting in a totaled car, collision coverage will pay you the value of your vehicle minus your deductible.

The deductible is a set amount you agreed to pay towards your vehicle when you purchased your automobile insurance. A higher deductible typically equals a lower annual insurance premium, saving you money each month. However, if you have a high deductible, you’ll miss out on part of the insurance payment on your totaled car.

Comprehensive Coverage

When your vehicle is damaged by an act of nature, such as hail or fire, to the point that the repairs exceed the vehicle’s value, comprehensive coverage will protect you. Comprehensive will also pay for your vehicle’s value if it is stolen and recovered but too damaged to warrant repair costs. This insurance coverage also has a deductible, which will be subtracted from the payout for your totaled car.

GAP Insurance

While GAP insurance coverage won’t pay anything towards your vehicle’s value if your car is totaled, it will protect you if you owe more on your vehicle than what it’s worth. GAP insurance protects you from the difference in loan amount owed and vehicle value. For example, if your totaled car has a value of $20,000, but you still owe $24,000 on the vehicle’s loan, GAP insurance will pay the $4,000 difference. Without GAP insurance, you would be responsible to your lending institution for the excess amount after the vehicle’s value is paid.

How Do You File an Insurance Claim on a Totaled Car?

After a car accident, regardless of whether you’re the at-fault driver or not, you should notify your insurance company immediately. Many companies offer online or phone claims 24 hours a day, seven days a week, for your convenience. You’ll need to provide your insurance company with as much information as possible, including:

  • Date and time of the accident
  • Location of accident
  • Drivers involved and their personal information (name, address, phone number)
  • Insurance information of any other drivers involved
  • Police report
  • Witness statements
  • Medical attention sought
  • Pictures of the scene
  • Photographs of the damage to any vehicles involved

Your insurance company will request that you receive an estimate for the damage to your vehicle before they can determine if your vehicle will be listed as a totaled car.

What Happens If You Disagree With the Vehicle’s Value?

Your insurance company will provide you with a determined value of your totaled car. If you disagree with the insurance company’s value placed on your vehicle, you might be entitled to hire an appraiser. If you can’t agree with the other driver’s insurance on value, you might be able to claim the loss under your collision coverage. Your insurance company will seek reimbursement from the other driver’s insurance company.

Does the Insurance Company Provide You With a Rental Car?

If your vehicle is not drivable, you may find yourself in the predicament of not having a way to work or school. When the other driver is at-fault, you should ask the claims representative if you’re eligible for a rental car. When you’re the at-fault driver, your insurance company is not required to provide substitute transportation while you wait for the estimates and payout. If you have rental car reimbursement insurance coverage, your insurance company will pay for the cost of a rental car. Your policy will state the dollar amount and length of eligibility for reimbursement.

What Happens to a Totaled Car?

Once an insurance company has deemed a vehicle as a totaled car, the title of the vehicle will be transferred to the insurance company, and they will dispose of it. In some instances, you can keep the totaled car, but it must be titled as a salvage vehicle and repaired before driving it on the road.

Auto insurance helps protect you from financial losses resulting from an accident. Make sure you have adequate coverage to pay for damages should your vehicle be a total loss. Get insurance quotes from several insurance companies to get the most value for your money.

FIXD Research Team

At FIXD, our mission is to make car ownership as simple, easy, and affordable as possible. Our research team utilizes the latest automotive data and insights to create tools and resources that help drivers get peace of mind and save money over the life of their car.

We’re here to help you simplify car care and save, so this post may contain affiliate links to help you do just that. If you click on a link and take action, we may earn a commission. However, the analysis and opinions expressed are our own.

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About the Author

FIXD Research Team

FIXD Research Team

At FIXD, our mission is to make car ownership as simple, easy, and affordable as possible. Our research team utilizes the latest automotive data and insights to create tools and resources that help drivers get peace of mind and save money over the life of their car.

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