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Totaled Car: What to Do When Your Car Is a Total Loss

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When Is Your Car Considered Totaled?

If your car was damaged in an accident and it would cost more to fix than it’s worth, your insurance company may consider it a total loss (also referred to as “totaled”).

Whether a Car Is Totaled Depends on Where You Live

Whether your insurance company declares your car a total loss depends on where you live. New York state considers a car to be a total loss if the repairs total more than 75% of the vehicle’s current value. If you live in Texas, the same car would only be a total loss if the cost to fix it is at least 100% of its value. Some states, such as Georgia and Illinois, leave the “total loss” declaration standards up to the insurance company.

Get an estimate of the value of your car based on its history

How Is a Car Declared Totaled?

When your car has been damaged in an accident and you file a claim with your insurance company, they’ll send a claims adjuster to examine your car and determine how much it will cost to fix.

Adjusters consider how many miles the car has been driven and the current condition of the car. By looking at comparable cars, the adjuster will estimate the actual cash value of your car before the crash. If the repair costs are more than that estimate, your car will most likely be considered totaled.

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What Do You Do After Your Car Is Declared Totaled?

As long as you carry the right coverage, the insurance company will issue a check for the cash value of your car minus any deductible that you owe.

If you have a newer car or are financing your car, you should carry collision and comprehensive insurance. Collision coverage protects you if you’ve been in a car accident. Comprehensive coverage applies if your vehicle was damaged by an act of nature, such as damage from a hail storm or a falling tree.

If you are leasing or financing the car, your insurance company might send a check made out to you or to the lienholder.

What If Your Totaled Car Value Is Less Than You Owe on It?

If the check isn’t enough to pay the entire balance due on your loan, you will still owe your lender the difference.

Gap insurance can protect you in this case – it’s meant to cover the difference between what an owner owes on a car and the market value. Otherwise, you may have to make payments on a car you no longer have.

In some cases, the insurance company may issue the check to both you and the lienholder. When that happens, call your lienholder to find out how the funds will be disbursed.

What Happens to a Totaled Car?

If your car is declared a total loss, you should prepare it for pickup by your insurance company:

  • Remove all of your personal items and paperwork from the car.
  • Clear any personal information from your navigation and phone systems.
  • Remove the license plates.
  • Give your car title and keys to the insurance company. If you are unable to find the title to your car, contact your local DMV office.
  • When the insurance company comes to pick up your car, you may need to sign a document that acknowledges their right to take your car.

Some states may allow you to keep your car after it’s been totaled, usually with a salvage title. This may be an option if you are looking for spare parts or you are experienced in making repairs yourself. Keep in mind that if you make the repairs on your own, your car will likely be given a rebuilt title, and it may be hard for the car to pass inspection or for you to get another insurance policy.

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Get a Carfax Vehicle History Report

If you’re thinking a buying a used car and are worried about getting stuck with a vehicle that has been declared totaled, get a Carfax Vehicle History Report. These reports give buyers valuable information about a vehicle’s past, including total loss, accidents, flood damage, and service history. These reports will show a car’s title history and highlight problems with red alerts and symbols.

A Carfax Report can help you to identify if title washing has occurred, which can happen when a vehicle is brought to another state to erase any records of damage or other issues, such as a salvage title or rebuilt title.

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If you have questions about this story, please contact us at Editors@carfax.com