What Happens When Your Car Is Totaled?

Accidents happen to the best of us. You can take every precaution imaginable to keep your car in pristine condition, but no amount of preparation can prevent the occasional run in with a falling tree branch, flash flood, hailstorm, runaway shopping cart, or your classic fender bender. Should you find yourself in such an unfortunate predicament, you’ll want to consult with your insurance agent and, depending on the severity of the damage, you may find yourself with a totaled automobile.

So what happens when your car is totaled? In most cases, it means you’re going car shopping. Basically, your insurance company will buy your totaled vehicle from you with the assumption that you’ll put that money toward a new set of wheels. If your vehicle isn’t totaled, your insurance will help cover the cost of repairs.

But How Do Insurance Companies Decide If My Car Is Totaled?

When an insurance company decides whether or not a vehicle is “totaled”, they take into consideration two figures: the value of the vehicle (pre-wreck) and the cost of repairs. When determining the value of your car, insurance agencies consider its make/model, age, pre-wreck condition, and other factors. Each insurance company has its own metric for determining when a vehicle is a total loss, but an average would be when the cost of repairs meets or exceeds around 75 percent of the vehicle’s value. For instance, if your vehicle is worth $5,000 and repairs are estimated at $4,000, an insurer will consider the vehicle totaled and, barring complications, your insurance company will give you $5,000 to put towards a new car. However, the insurer wouldn’t make the same call should you receive a $4,000 repair bill on a higher value vehicle. In this case, the insurer would work with you and a repairer to cover the cost to repair the claim damage. For these reasons, it’s much more common for older vehicles to be totaled out compared to a newer vehicles.

My Car Looks Fine, How Is It Totaled?

This may be the case, but remember, declaring a car totaled does not necessarily mean it is a wrangled heap of twisted metal and broken glass. Depending on a vehicle’s value and the part(s) that have sustained damage, even a minor fender bender can technically be enough to total out a vehicle. For instance, if repairs would require obtaining replacement parts that are no longer available, an insurer would have no choice but to total it out. Or if a vehicle’s structural integrity is compromised, and there isn’t an OEM-approved process to repair it, the vehicle would be considered totaled as no amount of restoration would make it safe to drive.

What Happens to My Car Now?

If your vehicle is deemed a “total loss” by the insurer (another term for “totaled”), they’ll take ownership of your vehicle and commonly sell it to a dealer, broker, wrecker, or on the open market at a deeply discounted rate. Even in its totaled state, your vehicle will most likely be of at least some value to another person. There are plenty of buyers out there who make their living repairing, parting out, or scrapping totaled vehicles. Very rarely will a totaled vehicle carry zero value whatsoever.

But What If I Want To Keep My Car?

In most cases when a car has sustained enough damage to be considered totaled, a driver will follow the suggestion of their insurance company, take the payout, and buy a new car. But if you just can’t bear the thought of losing your precious ride, you have the option of keeping the vehicle and putting the insurance payout (slightly less in this case, mind you) toward repairs. Keep in mind that repairing a vehicle already deemed “totaled” is challenging and it can be difficult and expensive to get a vehicle with a salvage title to pass state inspections. Without the state’s stamp of approval, you won’t get far. Remember, even if your vehicle looks great from the outside, it still has to be in a safe, operable condition to be licensed. For your safety and the safety of other drivers, repairs to your vehicle must be done the right way. Still, if you know your way around auto repairs and have the time and energy required for the task, then by all means, have at it.

So What Should I Do?

Bottom line, it’s in your best interest to consult with your insurance agent following any automobile accident to get their input. An experienced and trustworthy agent will be able to provide you the best insight to help you get back on the road as quickly and as safely as possible.