What Happens If Your Car Is Totaled?

Are you prepared to deal with a total loss of your vehicle?

Hopefully, if you ever end up in an accident, no one gets hurt and your vehicle can be easily repaired. However, sometimes the cost to repair your car is more than its market value. In this case, your vehicle is a total loss. 

What does a "total loss" even mean?

Your vehicle is considered a total loss if it isn't repairable or the repairs cost more than what the vehicle is worth. There are a variety of factors that go into the total loss decision. For example, the older your car is and the more miles it has, the less its market value will be. And digital technology in newer cars can also make repairs more difficult and expensive. 

What types of insurance coverage covers a totaled car?

Comprehensive Coverage: Covers damage or total loss caused by something other than a collision with another vehicle such as fire, fallen trees, etc.

Collision Coverage: Covers damage or total loss caused by an accident with another car.

What if you have a lien on the vehicle?

If you are still paying off a loan on your car, the insurance company will pay that lien first and then send any remaining money to you. If you owe more for your vehicle than its ACV, you'll have to pay the difference unless you have GAP insurance. GAP coverage pays the difference between your vehicle's ACV and its lien when the car is totaled.

What should you do if you think your car has been totaled? 

File a claim, and an adjuster will assess the damage or review your repair shop estimate. Once market value is determined, you will either be offered a payout to repair the car or notified that your vehicle is a total loss. When you accept the total loss settlement, you have to sign your vehicle over to the insurance company.