How do I get rid of a totaled car?

When your car is totaled, the insurance company will pay your vehicle’s actual cash value – how much it was worth right before the accident. The insurance company will pay your lender or lessor directly if your car is financed, and they will pay you directly for vehicles that are paid off.… read full answer

You may have the option to keep your totaled car if you’d like to try to repair it or sell it yourself, instead, but your payout will be lower. Your insurer will still pay you the actual cash value, but they’ll subtract any deductible and however much they would have made if they had sold the car for scrap or salvage.

What Happens Before Your Car Is Totaled?

After your car is damaged, you will first have to file a claim with the appropriate type of insurance depending on the situation. For example, you’d use collision insurance if you were at fault for the accident. You’ll then need to wait for the insurance company to investigate the claim.

Depending on state law, your insurer will declare your car a total loss if the cost to repair the damage is more than a certain percentage of the vehicle’s worth (75%, for example) or if the cost of repairs would be more than the vehicle’s value.

What To Do If Your Car Is Totaled: 5 Steps

Step 1: File a claim with the appropriate type of insurance coverage.

• If your vehicle is totaled after an accident you caused, you’ll need to file a claim with your own collision insurance.

• If your car is totaled after an accident caused by someone else, the at-fault driver’s liability insurance will be responsible for your damage.

• In situations where your car is totaled by something other than an accident, such as vandalism, theft or a natural disaster, you should file the claim with your comprehensive insurance.

Unfortunately, not everyone has collision and comprehensive insurance. They are optional types of coverage.

Step 2: Wait for the insurance company to investigate the claim.

After a claim, insurance adjusters will determine the cause of the incident. They will also investigate the claim to make sure that it isn’t fraudulent. Depending on how long the investigation takes, your insurer should determine whether your totaled-car claim is approved within a month.

Step 3: Decide what to do with your totaled vehicle.

If you allow your insurance company to keep the totaled car, it may be sent to a scrap yard and stripped of any parts that are salvageable. The car could also be purchased at an auction by someone who repairs previously totaled vehicles.

Additionally, you have the option to keep the car in most situations, if you want to try to repair it or sell it yourself. However, if you choose to keep the car, your insurer will likely only pay out the value of the car minus what they would have made selling it for scrap.

Step 4: Accept the insurance settlement.

After a vehicle is totaled, insurance will only cover the actual cash value of the vehicle, minus any applicable deductible. If you weren’t at fault for the accident, you won’t need to worry about a deductible, but comprehensive insurance and collision coverage often come with deductibles ranging from $100 to $2,000.

If you disagree with how much your insurer is willing to pay, you can dispute the settlement by gathering evidence to support your valuation, such as independent appraisals, pricing for comparable vehicles, and receipts for any alterations.

Step 5: Use gap insurance to pay off your remaining loan or lease balance, if necessary.

For financed vehicles, gap insurance can cover any remaining balance if the totaled car was worth less than the amount still owed. Many lenders require gap coverage for financed vehicles, and it is a useful thing to have even if it is not required.

To learn more, check out WalletHub’s guide to totaled cars.

You can fight an insurance company over a totaled car’s value by sending the insurer a counteroffer along with evidence justifying your car’s value. If the insurance company does not raise its offer, you can contact your state’s insurance regulator, seek arbitration or file a lawsuit.

How to Fight an Insurance Company Over a Totaled Car’s Value… read full answer

1. Receive a settlement offer from the insurance company.
2. Gather evidence, including an independent appraisal, the car’s sticker details, prices for comparable vehicles, photos of the car before the accident, and receipts for any features you added.
3. Send this evidence and a counteroffer to the insurance company.
4. If the insurance company does not agree to your counteroffer, contact your state’s insurance regulator to request help.
5. Ask your insurance company for third-party arbitration if necessary.
6. File a lawsuit as a last resort.

It’s important to remember that insurance companies are only required to pay a car’s actual cash value (ACV), not the cost of a replacement car or the original price you paid for the vehicle.

Fighting an Insurance Company’s Decision to Total a Car

Car insurance companies and state laws determine when a car is declared a total loss, so it is unlikely that you will be able to fight your insurer if they decide your car is totaled. Unfortunately, you can typically only fight your insurer about your vehicle’s value.

However, if your insurance company declares your car a total loss in violation of your state’s laws, it is important to contact your state’s insurance regulator for help. They can investigate the situation and see if the insurer is acting in bad faith.

To learn more, check out WalletHub’s guide to totaled cars.