How Do You Know If Your Car Is Totaled?

If you’ve been in an accident, the insurance company (not the body shop) may determine that your car is totaled. But what does that really mean? There are a couple of working definitions of “totaled” that you should be aware of.

It may mean that the damage to your vehicle isn’t repairable, but more often it means that the cost to repair the car exceeds its actual cash value. In either case, a series of events will happen next – and you have a role to play in them.

What The Insurer Owes You

Each state has its own specific regulations that determine what the insurers are required to do, however, this article will focus on the universal things that you may expect.

If your car is totaled, the insurance company (yours, or the other person’s if they are at fault) is required to pay you the actual cash value of your vehicle at the time of loss. This is typically where there’s a disagreement between you and the insurer. You see, they will most likely value the vehicle much less than you would.  If there’s a disagreement, you have options.

Some states will allow the insurance company to replace your totaled car with an available car of similar value. If such a vehicle is not able to be found nearby, they may extend the search, or just pay you the actual cash value.

If you and the insurer cannot agree on the actual cash value when your car is totaled, you may have an appraisal clause in your policy, enabling you and the insurer to hire independent appraisers to resolve the disagreement.  NOTE: Whatever these two independent appraisers agree to is binding and must be accepted.

Can You Keep Your Totaled Car?

If your car is totaled, you may still want to keep it. In that case, the insurance company will deduct the salvage value of your car from their settlement offer, and they will report your vehicle as “salvaged” to your state authorities.  You will be issued a salvage title, and that will alert anyone seeking to purchase it in the future that your car is totaled.

It’s also important to note that a salvage titled vehicle falls into a different type of insurance coverage, and some insurers simply won’t cover such cars.

While we are never the ones to actually declare that your car is totaled, we see enough of them to know with a high degree of accuracy when the insurance company will make that assessment.  If you’d like us to take a look and offer our professional opinion, please don’t hesitate to contact us. It’s always our pleasure to serve and inform you.