I Think My Car Is Totaled — Now What?

When you’re in an accident, it isn’t always immediately clear how extensive the vehicle damage is. According to the LexisNexis® U.S. Auto Insurance Trends Report, more than 25% of collision claims were deemed total losses in 2023, and total loss claims have jumped 29% since 2020.

You can’t judge for yourself whether your car is a total loss, and many people don’t know who makes that decision or what it means for insurance claims.

So what is the process for you, as a driver?

After any accident, once you’re physically safe, you should call your insurance company. They’ll guide you through reporting the accident and handling claims. Review your policy with them to clarify coverage, deductibles, and any other details. You should also review your purchase agreement to assess any additional warranty or GAP coverage you might have purchased.

Most insurance companies will send an adjuster to look at the damage to your vehicle. They’ll give you an estimate of what they’ll cover in repair costs. You can work with a repair center to compare their estimate and decide if the offer is fair.

Insurance companies generally consider a car totaled if repair costs are 70% to 80% of the pre-accident value, but that varies by state and insurance carrier. If the repair costs exceed the established limit, the vehicle is declared a total loss. The insurer will offer a settlement based on the car’s market value, minus your deductible and any other fees.

Once the insurance company determines the total loss value, you’ll be given a settlement offer. Before accepting, research the market value of your car, accounting for things like mileage, condition, and any upgrades that might increase its worth. If you disagree with the offer, provide evidence, like receipts for repairs or maintenance and comparable car values. Sometimes you can get a higher offer if you can make a strong case. You can also hire a private appraiser and/or an accident attorney if you think it’s worth the additional cost.

In some cases, you might have the option to keep your totaled car, depending on state laws. The insurer will deduct the salvage value from your settlement, and you will have to deal with disposing of or repairing the car yourself. Be aware that totaled cars must be inspected before they can be issued a rebuilt title and might be harder to insure later. If you take the full settlement and turn the car over to the insurance company, they’ll usually handle removal.

If you financed your car and the settlement doesn’t cover the full loan amount, you still have to pay the balance. If you have GAP coverage, it can help fill the “gap” between the amount you owe and the amount insurance paid.

Conclusion

No one wants to deal with a car accident and the aftermath, but the anxiety is lessened if you know what to do ahead of time. Being prepared with proper vehicle coverage and the knowledge to use it can help make a bad situation a bit easier.