What if My Car Is Totaled in the Accident?

It is relieving that you’ve made it through a car accident, but now you’re facing a situation where the car insurance company deems your car a “total loss.” What exactly does that mean, and what comes next?

If you suspect your car is a total loss, contacting your insurance company is important. Next, remove all personal belongings from your car and erase any personal data from your navigation and phone systems. Hand over your car title and keys to the insurance company, and be prepared to sign a document acknowledging their right to take the vehicle.

Dealing with the complete loss of your car can be a stressful situation. Understanding what lies ahead and getting responses to your inquiries can make navigating this claim process easier.

What Is Meant by a “Totaled Car” or a “Total Loss”?

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What does it mean if the insurance adjuster declares your car “totaled” or a “total loss”? Well, insurance companies use this term when:

  • The expected repair costs are higher than the car’s actual value.
  • Your insurance adjuster can’t fix the car to meet safety standards.

Every state has different rules to determine if a car is a total loss. They typically consider:

  • The car’s market value before the accident.
  • Comparison of the repair cost to the pre-accident value (often following a specific formula).

For instance, New York has a 75% or higher threshold for market value, while Nevada uses a 65% threshold.

What Steps Should I Take If My Car Is Totaled in an Accident?

When dealing with a total loss accident, it’s crucial to prioritize your physical health and well-being first. Once you’ve addressed your immediate medical needs and the initial shock of the accident has passed, here are the steps to follow:

Step 1: File an Insurance Claim

Contact your insurance company and the insurer of any other party involved in the accident as soon as possible. Total loss claims can be time-consuming, so quick reporting is essential. If another driver was involved, report the accident to your insurer and the other driver’s insurer.

Step 2: Choose an Approved Auto Repair Shop

You can tow your car to an auto shop, but selecting one approved by the insurance adjuster handling your claim is advisable. The approved shop will assess the repair costs, and the adjuster will determine whether the car is a total loss.

Step 3: Gather Necessary Documents

Prepare the required paperwork, including your car’s title. If you don’t have the title, you can get a copy from your state’s Department of Motor Vehicles (DMV). In case your car is declared totaled, prepare yourself to sign over the title to the insurance company.

Step 4: Research Your Car’s Actual Cash Value (ACV)

Before accepting any insurance payment for your totaled car, do your own research on its ACV. Explore auto websites, check local newspapers, and visit nearby car dealerships to understand the current market value for vehicles similar to yours.

Step 5: Review Your Car Loan

Determine the outstanding balance on your car loan if you have financed your car. The insurer will settle the loan with your lender, and you will receive any remaining funds.

How Much Will My Insurance Cover for a Totaled Car?

Each type of insurance coverage, whether liability, collision, comprehensive, or underinsured motorist coverage, comes with its policy limits. These limits represent the maximum payout your insurance company will pay for a single claim or accident.

For instance, in a collision, your car is declared a total loss with an actual cash value (ACV) of $35,000. However, the at-fault driver’s car insurance policy only covers $20,000 in property liability. In this case, their insurer will cover just $20,000 of your total loss settlement. You must rely on your collision or underinsured motorist coverage to recover the remaining $15,000 of your car’s ACV.

Who is Responsible for Covering the Costs of a Totaled Car?

A clear understanding is important for evaluating the responsibility of the cost of a totaled car. Let’s break down the responsibilities and situations determining who pays for a vehicle classified as a total loss:

  • The other driver’s or car owner’s insurer pays for your totaled car if they were at fault for the accident.
  • If valid insurance was lacking during the accident, compensation may be limited, even if it wasn’t your fault.
  • If the negligent party is uninsured or underinsured, you must rely on your collision coverage or Underinsured Motorist (UIM).
  • Without collision insurance, your insurer won’t reimburse you for your car’s Actual Cash Value (ACV).
  • If you are at fault, your liability coverage pays for others’ injuries and property damage, but you’ll need collision coverage for your totaled car.

What Type of Insurance Coverage Can I Use for a Totaled Vehicle?

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There are several types of insurance coverage for a totaled car, depending on the cause of that loss, including:

  • Collision Coverage: This coverage applies when an accident involves another car or object, such as a post, guardrail, or tree, totals your car.
  • Comprehensive Coverage: You can use comprehensive coverage if factors like severe weather, vandalism, or animal collision result in a total loss of your car.
  • Property Liability Coverage: If another driver is responsible for the accident that leads to the total loss of your car, and their insurance covers the damages, it falls under this category.
  • Underinsured/Uninsured Motorist Insurance: This coverage comes into play in cases where your car is totaled in an accident by a negligent driver having no insurance.

Are You Allowed to Keep a Totaled Vehicle?

You can usually keep your totaled car, but there’s a catch. The insurance company will assess the car’s “salvage” or “junk” value: how much they could get by selling it for parts. They’ll then subtract this salvage value from your car’s Actual Cash Value (ACV). This means your settlement check will be smaller, but you’ll retain ownership of your car.

However, before deciding to keep a totaled car, it’s essential to consider the financial aspects. For instance, you’ll have to arrange for repairs, inspections, and reinsurance to get the car back on the road. 

Furthermore, some individuals opt to donate their totaled vehicles to charitable organizations in exchange for a potential tax deduction. To explore this option, ask your preferred charity about partnering with a car donation service or auction house. Certain state recycling programs may also list organizations that accept unwanted cars as charitable donations.

Secure Your Claim with Uptown Injury Car Accident Lawyer

When you’ve been involved in a car accident, securing your claim for maximum compensation can be challenging on your own. At Uptown Injury, our team has over 15 years of experience in handling car accident injury cases with a proven track record of success. 

We understand the complexities of these cases, from gathering evidence to negotiating with insurance companies, and we’re committed to ensuring you receive the compensation you deserve.

What sets us apart? We work on a contingency fee basis, meaning you pay us nothing upfront. Our motivation is aligned with yours – we only get paid when you win your case. Let our experienced team fight for your rights and secure the compensation you need to recover from your car accident injuries. 

Call us at 917-540-8728 to book a FREE consultation today!



Kyle Newman Founder and Senior Trial Lawyer at Uptown Injury Law New York's Best Personal Injury Medical Malpractice and Accident Law firm New York's Top Trial Lawyers
Kyle Newman Founder and Senior Trial Lawyer at Uptown Injury Law New York's Best Personal Injury Medical Malpractice and Accident Law firm New York's Top Trial Lawyers

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