What happens if your car is totaled?

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 type of insurance coverage covers a totaled car?

These two types of insurance policies will pay out your car’s Actual Cash Value (ACV) if it’s totaled.

• 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.

Have questions about your insurance coverage? Just reach out. We’re happy to help.