You’ve Totaled Your Car: Now What?
Totaling your car can be a devastating experience. Twelve to 14 percent of all post-accident insurance appraisals result in a total loss. This means that if you are in a car accident, there’s a one in seven chance that your car will be considered totaled. Your first step is to call your insurance company. They will send a car damage adjuster to determine if you car is totaled.
Your car can be considered totaled if the damage to the vehicle is so severe that it can’t be repaired safely. It can also be considered totaled if the repairs will be more than the cost of the vehicle itself. Or if the amount of the damage is severe enough that state regulations require the vehicle to be declared a total loss.
In order to determine if your car is totaled, your insurance company will look at comparable sale prices and the pre-existing condition of your car including what vehicle upgrades you had your mileage, and if you had any previous damage.
But here’s the good news. After their car is totaled, car owners will often treat their insurance payment as a generous gift from their insurance provider. But they are going about it the wrong way. As a car owner, you are entitled to fair market value or “ACV” for your car. However, the insurers job is to offer you and to get you to accept the least amount of money for your car that they can. Remember, your payout is negotiable!
The best way to ensure you get a fair payout is to do your own research. Your insurance company will use their own programs, but also public resources such as Kelley Blue Book to determine fair market value for your car and you can too. This way, when your insurance provider tells you what they determined is the fair market value for you car, you can be confident that it is a fair amount, or you can use the facts you acquired to negotiate for more money.
Once it is determined that your car is a total loss, your insurance company will pay you the cash value of your car minus a deductible. They then take ownership of the vehicle and sell the car to a salvage buyer.
If you have a sentimental attachment to your car or want to keep it for another reason, if your state allows it, you may have the opportunity to keep the car. In this case, your insurance company may pay the cash value of your car less your deductible and less the fair salvage amount.