What Happens If Your Car Is Totaled
It’s the worst-case scenario. You’re driving on the freeway and get rear-ended by another vehicle. You manage the situation as best as you can and call your insurance company to handle all the nuances that come with a collision. You’re fine, you’re safe, and that’s what matters most.
But your car isn’t. Your insurance company has informed you that it is totaled.
What does that mean? What do you do now?
Don’t fret! We’ve got your back. Let’s start with the basics first:
What does it mean to have a totaled vehicle?
When the cost to fix the car exceeds the value of the vehicle itself, either due to a collision, flood or any other natural disaster, your vehicle is totaled. A car could also be totaled if the adjuster considers that the vehicle is no longer safe to drive after being repaired.
Each state has different regulations when it comes to determining a totaled vehicle, but to give you an example, in Alabama, a car is considered a total loss if the damage is greater than 75 percent of its value.
How does an insurance company estimate the value of your vehicle?
Several factors come into play when calculating a car’s value. Some include the vehicle’s age, model, condition, miles driven as well as resale value.
Will my insurance company buy a new car?
It depends. If your car is new – less than three months old– your insurance will most likely replace your totaled car with a new one.
If your car is older, the insurance company will pay the actual cash value of your car right before the damage minus the deductible for the collision.
Your auto insurance company does not have an obligation to pay off the loan, should you have one. It is because of this that many drivers choose to add gap insurance coverage to their policy. With gap insurance, your company will cover the remainder of the loan if the car is totaled.
If, however, you don’t have gap insurance, you will need to speak with your lender to reach an agreement regarding your loan.
What if you want to keep your totaled vehicle?
If you’ve had your vehicle for some time and have grown attached to it, you may want to keep it. Whatever the reason for you not wanting to surrender it even when it’s totaled, your insurance company may pay the total cash value of your vehicle before the collision or damage. Some states don’t allow owners to keep a totaled car, so before deciding to keep yours, you'll need to check the regulations in your particular state. Speak to your adjuster to learn more information regarding how to proceed with your totaled vehicle.
Those were some of the factors you'll need to take into consideration should your vehicle be declared a total loss. The most important thing to keep in mind, as stated before, is that you’re safe. With time, patience, and good insurance coverage, everything will be fine.
At Infinity Insurance we recommend at least getting comprehensive and collision coverage insurance to be on the safe side. If you can also add gap insurance, all the better.
Let us take care of you at Infinity. If you’re unsure about your current coverage, one of our friendly agents will help you through the process of obtaining the best auto policy for you. Call us today at 1-800-INFINITY or visit our website to get a free quote in minutes.
The materials available in the Knowledge Center are for informational purposes only and not for the purpose of providing legal advice. You should contact legal counsel to obtain advice with respect to any particular issue or problem. Use of this website or any of the links contained within the website do not create representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the website for any purpose. Any reliance you place on such information is therefore strictly at your own risk.