What If My Car Is Deemed a Total Loss After a Crash?

Introduction

Say you've been in an accident, and your car has been deemed "totaled" on the insurance company's books. This can be a stressful situation, but there are several things you can do to protect yourself and ensure that you get paid what the car is really worth when your insurer says you have a “total loss car.”

What does it mean if my vehicle is declared totaled?

If your vehicle is declared totaled after it was damaged in a crash, it means that the insurance company has determined that it's not worth repairing. You will be paid the actual cash value of your vehicle minus any deductible and other fees that you may be responsible for paying.

Will I be paid the full market value of my totaled car?

If your car is deemed totaled after a crash, you want the insurance company to pay you the full market value of your vehicle. However, insurance companies often lowball appraisal offers because they want to pay as little as possible on your claim – even if that means purposefully offering an appraisal amount that they know is less than your car is actually worth. They’re gambling that you may take the offer without pushing for an offer that more accurately reflects your vehicle’s fair market value.

How do I know whether my car will be deemed totaled by the insurance company?

It's important to know that the insurance company will decide if your car is totaled. The decision will be based on the damage to your vehicle, including body panels and mechanical parts such as an engine or transmission.

If you have collision coverage, it's possible that the cost of repairing your car may exceed its value. In this case, even if there isn't much damage but it costs too much to fix and recondition, the insurance company could still deem it totaled because they want to minimize their payout amount on your claim.

How do insurance companies determine whether or not their insured's vehicle is totaled after an accident?

Insurance companies use a formula to determine whether or not their insured's vehicle is considered totaled after an accident. The formula considers the cost of repairing the car, the value of the car before the accident, and the value of similar cars in the market. Ultimately, your insurer is going to balance the cost of repairs against their appraisal of the vehicle’s value before the accident.

How can I make sure that I get the full, fair market value for my totaled car?

To make sure the insurance company’s appraisal offer reflects what your totaled car is actually worth, get an appraisal from an independent third party that has experience in appraising damaged vehicles and negotiating fair payouts on total loss claims.

Conclusion

The best way to ensure you're getting a fair deal on your totaled car is to know the insurance company’s criteria for declaring a vehicle totaled and for assessing the vehicle’s value – and then have the insurance company’s offer evaluated by an independent third party.