Is a car totaled if it has frame damage?

An insurance company determines the value of a totaled car by considering factors such as the vehicle’s make and model, year, and mileage. A vehicle is considered totaled when the cost of repairs approaches or exceeds the car’s actual cash value (ACV), which is what the insurer says the car was worth prior to being damaged. If the insurer declares the vehicle a total loss, they will pay out any insurance claims based on the ACV.... read full answer

Factors That Affect a Car’s Actual Cash Value (ACV)

• Make and model
• Year
• Mileage
• Depreciation
• Accident history
• Mechanical problems
• Wear and tear
• Cosmetic problems
• Local demand for similar vehicles
• Sale prices of comparable vehicles in the area

It’s important to keep in mind that the ACV is not the same as the cost of purchasing a replacement vehicle of the same year, make and model. Vehicles begin to depreciate quickly after they’re driven off the lot, so even if your car is relatively new, the ACV will probably be significantly lower than what you paid for the vehicle in the first place.

If you think your insurer’s ACV calculation is too low, then you should send a counteroffer that includes your justification for why the car was worth more prior to being totaled. This may include an independent appraisal, receipts for any features you added, and prices of comparable vehicles. There are several resources online that you can use to research your car’s value, including NADA Guides and Kelley Blue Book.

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.

If your car is totaled and you still owe money on the loan, the insurance company will pay your lender for the car’s value, and you will be responsible for any remaining balance if the check is less than the loan amount. If you have gap insurance, it will cover the difference between the car’s value and the loan balance. Otherwise, you will need to continue making payments for as long as it takes to bring your loan balance to zero.... read full answer

If your car is totaled and another driver is at-fault, their liability insurance will pay for the car’s value up to their policy limits. If you were at fault, you can file a collision claim. After you receive a settlement from the insurance company, you can determine if you still have a balance left on your loan.

After your lender has gotten the insurance check, you can file a gap insurance claim immediately, assuming you previously purchased coverage and still owe money to your lender. Be sure to follow any instructions in your policy. For instance, some gap insurance policies instruct you to continue making payments to your lender until the claim can be processed.

Unfortunately, your options are limited if you don’t have gap insurance and your total loss check does not cover your loan balance. You can try to negotiate with the insurance company to have them increase their estimate of your car’s value. However, you will need evidence that your car was worth more than the insurer calculated, and there is no guarantee that you will get more money. Otherwise, you are stuck continuing to make payments, though you could try asking your lender for a payment plan.