Is My Car a Total Loss?

Many people are confused about what makes a car a “totaled” car. Some may think that if the airbags deploy or if the car is not drivable, it is totaled. The truth is, a car is considered to be totaled, or a total loss, when the cost to repair the vehicle is more than the actual cash value (ACV) of the auto. The ACV is the price of the vehicle’s total worth. Different insurance companies use a variety of different services to determine the exact ACV of a vehicle. If repairing the car so that it is in the same condition as it was before the accident costs more than the ACV that the insurance company has on file, then the car is considered a total loss.


What do I do when my car is totaled?


When you will file a claim on a badly damaged vehicle. your insurance will usually help you find a safe place to store it. They will then determine the ACV of your car. You’ll want to check your policy to see if you have rental reimbursement coverage. If you do, your insurance will likely provide you with a rental car at the price point allowed in your policy for the number of days allotted in your policy while the rest of claims work is finalized. 


How much will my insurance pay me?


Unless there’s a special circumstance, the actual cash value (ACV) of the car, as it is determined by the insurance company, will be paid out to you. In a full settlement scenario, you will simply allow your insurance company to keep your vehicle. In a partial settlement scenario, you will typically decide what happens to your car. You may choose, for instance, to sell your totaled car to a salvage yard. Or perhaps you wish to donate the car to charity. 


If you have a loan out on the car, the ACV will actually be paid out to your lienholder. This lienholder is the person or organization who provided you with the loan to purchase your vehicle. If the ACV is not enough to pay off the loan, then you will typically have to pay the difference out of pocket.


What if I still want to repair the vehicle?


Repairing the vehicle on your own time and using your own money is still an option. A car that was deemed a total loss but was fixed anyway is often referred to as a salvage vehicle. In order to get registration to legally drive the auto, you will need to get a special salvage title. This title can be a viable option if you have a special attachment to the vehicle, but keep in mind that not all insurance companies will insure a salvage vehicle. Also, many dealerships will not sell or accept a car as a trade in with a salvage title.


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