No one ever plans to be in a car accident. Even if no one is injured, it can still be a traumatic experience.
If there is serious damage to your car, the insurance company may consider it “totaled.” But what does that mean, how do they determine a totaled car, and what should you do if you find yourself in this situation?
Knowing what to expect when you total your car will help put your mind at ease during a difficult time. And understanding the claims process can assist you in deciding how to best proceed in finding a replacement vehicle.
What Happens When You Total Your Car
The immediate thing to do after an accident is to contact the police. They can make determinations about whether to contact emergency personnel. Also, the attending officer will take down all details about the accident and file a report. This is important for establishing a record of what happened, even if the accident was your fault.
Some states require drivers to report certain vehicle accidents to their office of motor vehicles. You can become familiar with regulations in your state, but a police report will have you covered.
The next thing you will want to do is contact your insurance company and initiate an insurance claim. This should be a simple process. They will ask you to provide police report information, especially if it involved another vehicle. They also will let you know if they need additional information about the incident.
If your car is not driveable, the insurance company also can let you know what options you have for alternative transportation. This could include compensation for the cost of a rental car. The amount of coverage you have will determine these benefits.
The insurance company then will assign you a claims specialist, also known as a claims adjuster. They will investigate the circumstances surrounding the incident, then make a determination about your claim. They also will represent you in any interactions with other parties involved.
The claims adjuster will determine the value of your car by looking at every aspect of the vehicle. They will consider the value of comparable vehicles in your area. Based on this information, they will calculate the “actual cash value” (ACV) of your car before the accident happened.
What Will Determine If Your Car Is Totaled
The insurance company will consider your car a “total loss” if one of two situations arise. The first is when there may not be extensive damage to the vehicle, but the claims specialist decides that it is not safe to repair the vehicle. This is uncommon and is often the result of the inability to reinstall safety equipment, such as airbags.
The second, most frequent reason a claims adjuster considers a vehicle “totaled” is when the cost to repair the car is more than the value of it. Depending on where you live, this amount may not be 100 percent of the car value. These thresholds vary by state, but a common one is 75 percent. So, if 75 percent of the car’s value cannot be regained by fixing it, the claims specialist will consider it a total loss.
How the insurance company compensates you for a totaled car depends on several factors. If the accident is your fault, and you only have liability coverage, your insurance company will not pay for the damage to the vehicle. If you have collision or comprehensive coverage, they will, minus your deductible.
The same goes for a car totaled in a weather event, fire, vandalism, or a natural accident, like a limb falling from a tree. Comprehensive coverage should pay the full amount. Liability alone probably will not.
If the accident was another driver’s fault, then their insurance will cover the cost of your repairs. In this case, your insurance claim most likely will proceed as normal. Your insurance company will seek compensation from the other driver’s insurance.
This process is not something with which you need to concern yourself. One important thing to remember is to get the other driver’s car insurance information at the scene of the accident. Again, the attending police officer should make sure that you have all the information that you need.
All states require drivers to carry a minimum amount of liability insurance. This covers damage to property, bodily injury, and total damage per indecent. The other driver’s liability insurance will cover the cost of the damage to your car up to their policy limit. But these levels vary by state.
What happens if you are in an accident with an uninsured driver or one whose liability insurance does not cover the full cost of your totaled vehicle? Do not worry. Almost all insurance plans have “uninsured” or “underinsured motorist” coverage. This will supplement whatever amount the other driver’s insurance does not cover.
After the claims adjuster makes all conclusions about the accident and the pre-accident value of your totaled vehicle, your insurance company will issue you a payment.
Final Things to Remember
Totaled cars are usually auctioned at salvage yards, with the insurance company keeping the proceeds. If for whatever reason you wish to keep your totaled car, you can request to do so.
You may have a personal connection to the car and wish to rebuild it. Remember that it may be difficult to get comprehensive insurance coverage for a restored car though, since its value is difficult to calculate.
Selling car scrap is another way to go. Just remember to remove all personal items from the vehicle. You also may consider keeping any parts that you can sell separately for profit.
It is important to remember that, during the claims process, you still need to continue making any payments you owe on your car. Even if the claims assessment drags on, it is your responsibility to meet any loan or lease requirements.
Due to depreciation, you could owe more on your car than it is worth. To avoid running into this problem, consider loan or lease guaranteed asset protection (GAP) coverage. If you total your car, it will cover the difference between the actual value of your car and what you owe on it.
Following an accident that was your fault, you can probably expect an increase in insurance rates. The severity of the accident and the circumstances surrounding it will dictate how much of an increase you see. This may be a good time to shop around for alternative insurance plans. Sometimes you can find appealing introductory rates.
Most states will allow you to collect the cost of sales tax, title, and registration fees associated with your totaled vehicle. You can file to have whatever pro-rated fees you already paid reimbursed to you.
Be Proactive
If you total your car, the best things you can do are be informed and be proactive. Do not be afraid to ask questions of your insurance company or present concerns that you have. Use online resources to make decisions about the next steps to take. Be as informed as possible. A car accident is precisely the reason you have insurance: for them to assist in these situations. If you take the right steps detailed above, you will be back on the road in no time.
