How to Determine If a Car Is Totaled

The aftermath of a bad accident can be very taxing--physically, emotionally, and financially. One of the many things you will have to deal with following the accident is the repair or replacement of your vehicle. In most serious accidents, vehicles sustain significant damage, in which case there a strong possibility that your car insurer may deem your car “totaled.” Find out when and how insurers make this determination and what your options are when they say you totaled a car.

Defining a Total Loss

For auto insurance purposes, a vehicle is considered a total loss when repairing it would cost more than replacing it. In other words, the repair expenses would exceed the vehicle’s [actual cash value]. An insurance company might also declare a vehicle totaled if repairing it would be unsafe or if state law requires the vehicle to be totaled out because of the extent of the damage.

The Numbers behind a Totaled Car

Before an insurer can deem a vehicle a total loss, they will need to compare the actual cash value of the vehicle (ACV) with the estimated cost of repairs. To determine these figures, an insurance adjuster will need to come and inspect your vehicle. The adjuster will calculate the vehicle’s actual cash value as well as the approximate repair expenses based on the observed damage. Insurance adjusters might also factor in the repair estimates you’ve obtained from approved body shops at the request of your carrier. If the repair estimate is larger than the ACV determined by your car insurer, your car is considered totaled by definition.

What Happens Next

A totaled vehicle will need to be replaced, so if you carry collision or comprehensive car insurance coverage (which coverage applies will depend on the nature of the accident), your insurer will write you a check to offset the totaled car value. The check will be for the actual car value of the vehicle minus the amount of your deductible. At this point, your insurer will usually take possession of the car totaled in an accident in order to sell it for scraps. This helps the auto insurance company recoup some of the losses associated with totaled cars. There is also the chance that once your car is totaled, car insurance rates may become more expensive for the short term.

Unfair Settlement

If you feel your total loss settlement is unfair, you have the option of hiring an independent appraiser on your own dime to inspect your totaled vehicle. You can find such an appraiser by contacting a local body shop. Ask that the appraiser put the details of the inspection in writing. You can then present the appraisal to your insurance company to see if they will reconsider their settlement.