What Happens If Your Car Is Totaled?

If your car has been damaged and the potential repair costs exceed 75% of the value of the car, it is considered a total loss. Here are answers to common questions that spring up when your vehicle has been declared totaled.

Why was my vehicle totaled?

After a loss (for example, a collision, vehicle fire or flood damage), there are a few reasons your vehicle may be declared a total loss. Often, the repairs are estimated to cost more than what the vehicle is worth — vehicle worth being the actual cash value determined by its year, make, model and major options, as well as mileage and overall condition. (Though the damage may not look bad, the repair can cost much more than you’d think.)

Other reasons for totaling a vehicle include when the damage makes the car irreparably unsafe or if your state’s regulations require it for your vehicle’s damage severity.

How much will I get?

You’ll receive the determined actual cash value of the vehicle, minus the deductible you chose when insuring it, as well as any applicable state taxes and/or fees.

What if I’m still paying off the vehicle?

You’ll be responsible for satisfying your loan agreement whether or not the money you receive covers it all. This is why you might consider gap insurance, so called because it covers the gap between what you owe on the vehicle and its current market value.

What if I want to keep my vehicle?

Talk to your auto insurance company or speak with your agent or claim representative to see whether state regulations allow you to keep your vehicle and, if so, what your reduced payment amount would be.

What do I need to do if I decide to surrender it?

First, clear out the car and remove personal items and paperwork. If possible, clear your information from the navigation and mobile phone systems, and take off the license plates. Round up all copies of the key and the title. Then, contact your agent for further instructions.