When your car is a total loss, it means the car cannot be repaired safely or that repairs would be too expensive compared to the vehicle’s value. If your car is declared a total loss due to a covered scenario, the insurance company will pay you the car’s actual cash value and will usually sell the vehicle as scrap.
Once you file a claim, the insurance company will determine whether the car is a total loss. Depending on your state’s laws, your car may be totaled if the cost of repairs exceeds a certain percentage of the car’s value, such as 75%. If your state does not have a specific total loss threshold, your vehicle will be considered a total loss if the cost of repairs plus the salvage value is greater than the car’s actual cash value (ACV).
Insurance Payout for a Total Loss Claim
For a car that was totaled by an accident, you will be reimbursed by the other driver’s property damage liability insurance if they were at-fault or your own collision insurance if you caused the wreck.
If the damage was caused by something other than an accident, like vandalism or a natural disaster, you can receive a total loss payout from your own comprehensive coverage.
What to Do If Your Car Is a Total Loss
- If you think the insurer undervalued your car, you can present evidence and negotiate.
- You will likely need to send your insurance company your keys, remove your license plates and personal items from the car, and sign over the title.
- If your car was leased or financed and you have gap insurance or loan/lease payoff coverage, file a claim.
For more information, check out WalletHub’s complete guide to totaled cars.
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