28 Sep, 2023
A car accident can leave you with more questions than answers—both personally and financially. If your car results in a total loss, you will work with your car insurance company on next steps. The next steps include deciding whether or not you’ll keep the vehicle.
It’s good to know how the car insurance process plays out for wrecks or “what if” scenarios. That’s why we’ve asked our insurance and claims teams to share with you information about totaled vehicles.
When you think of a totaled car, you might be thinking of a vehicle that looks unrecognizable after an accident.
Unfortunately, there’s no universal definition of a “total loss”—it all comes down to where you live. Every state sets its own definition and criteria of what constitutes a total loss. When a damaged vehicle is more expensive to repair than it is to replace, it is a total loss.
A totaled car is one scenario where you can be grateful you had the right car insurance coverages. It is important to have all the coverage you can afford before an accident occurs.
Which coverages can help in scenarios of a totaled car? Here are three that come to mind:
Collision coverage on an insurance policy is there to help for losses that are caused by hitting or being hit.
Comprehensive is a coverage that helps protect you from damage during an incident that does not involve a collision. Some incidents could be an accident with an animal, a flooded car or fire.
Rental coverage is also another helpful add-on to your car insurance policy that can provide some assistance to you. This coverage can put you back in a vehicle for a period of time while your totalled car is being handled. Every car insurer will have different requirements and uses for this coverage, so it’s a good idea to double check with them to see which situations would apply for Rental coverage.
With these (and other) car insurance coverages, you could feel a little more prepared to handle the process of a totaled car.
In more cases than not, your car is likely going to be in a less than ideal condition after a car accident. Whether that car damage is visible or not, your car insurance company will help play a key role in determining a total loss and what steps you can take afterwards.
In most cases you’ll file a claim with your insurer, which will begin the process of evaluating damages. If your vehicle is deemed a total loss, here is an example of the process:
Step 1: Determine who has the car title
Do you have the title of the car? If you own the car but don’t have the title, you may need to request a duplicate title from the DMV. Or, does your lender have the title? If your car is financed or leased, you’ll provide your insurance company with loan information (lender name, account information, etc).
It’s also important to know that all owners who are on the title are required to sign the paperwork with your insurance company, once the title is received.
Step 2: Chat with your car insurance company
As you go through the claims process, you’ll already be chatting closely with your car insurance company’s claims team. You will be given a complete list of repairs to restore your vehicle before your vehicle is deemed a total loss. Your car insurance company will review the pre-damage value of your vehicle and compare it to the damage estimate to determine if the vehicle is a total loss.
Step 3: To keep, or not to keep…that is the question
With the value in hand, you’ll make the personal decision as to whether or not you’ll keep the car that has been deemed a total loss. It’s a personal decision because you may decide you want to cut your losses and start fresh with a new car or you might want to keep it, fix it yourself or sell it for parts on your own.
Our claims team let us know that it’s not a common for someone to be able to keep their totaled car. If you have the option and decide to keep your car, there are a few things you’ll want to know.
First, your car insurance may require you to remove physical damage coverages for this car (Collision and Comprehensive) from your car insurance policy. This is because most insurers won’t pay out for a car that has been deemed a total loss, should it experience damage again. In fact, there are some insurance companies that won’t insure a total loss vehicle—even if it’s drivable.
Second, your insurance company could deduct your deductible and the salvage value from the value of the car before it was damaged.
Lastly—if you do decide to keep the car, your state will also require you to go through the necessary paperwork.
If you opt out of keeping the totaled car, the process is fairly straightforward. Your insurance company will ask you to remove all personal belongings and give permission to pick up the vehicle.
Afterwards, you’ll discuss the settlement with your car insurer. This amount is typically the value of the car prior to the damage, minus your deductible. It’s important to remember that before you see any payment or settlement, you will be asked to sign all required paperwork.
Step 4: Rental cars and coverages
When it comes to rental car options, it’s important to speak with your insurance company. It’s also important to contact your insurer’s customer care to discuss your insurance policy to cancel your policy or make changes to your coverages. When you replace the vehicle with your settlement, you’ll need to implement a new policy on the new car.
The news of a total loss is never what you want to hear after an accident. You can make an informed decision that allows you to get back on the road and behind the wheel safely.
If you have questions that come up during the claims process or accident, reach out to your adjustor. If you have questions about your policy, reach out to your car insurance customer care team. They’re there to help you during times when you need them the most—so don’t hesitate. Every question is a good question in our opinion and at La Familia Insurance, we’re here to answer them all.