Steps to Take When Your Car is Declared a Total Loss by Your Insurance Company

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If you have been in a car accident, you know how stressful it can be. Not only do you have to take care of any injuries sustained, but you also have to deal with the aftermath of the accident, including car repairs and insurance claims. In some cases, your car may be deemed “totaled” by the insurance company, leaving you wondering what to do next.

Assess the Damage

After an accident, the first thing you should do is assess the damage to your vehicle. Depending on the extent of the damage, your car may be repairable or deemed a total loss. If your car has been severely damaged, the insurance company may determine it is not worth repairing and declare it a total loss.

To assess the damage to your car, take it to a mechanic or body shop for an inspection. They will be able to give you an estimate of the cost of repairs and advise you on whether your car is repairable or not. If the cost of repairs exceeds a certain percentage of the car’s value, the insurance company will likely declare it a total loss.

It’s important to note that the insurance company’s definition of “totaled” may differ from yours. Just because your car can be repaired doesn’t mean the insurance company won’t declare it a total loss. Always consult with your insurance adjuster to determine the status of your vehicle.

Understand Your Insurance Coverage

Understanding your insurance coverage is crucial when dealing with a totaled car. The type of coverage you have will determine what the insurance company will pay out for your vehicle. There are two main types of coverage that may apply to a totaled car: liability and collision.

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Liability coverage only covers damage you cause to another person’s vehicle or property. It does not cover damage to your vehicle. If you only have liability coverage and your car is totaled, you will not receive any compensation from your insurance company.

Collision coverage, on the other hand, covers damage to your vehicle in the event of an accident, regardless of who is at fault. If you have collision coverage and your car is totaled, your insurance company will pay out the actual cash value of your vehicle at the time of the accident.

Understand Your Insurance Coverage

In addition to liability and collision coverage, there are other types of coverage that may apply to a totaled car, such as gap insurance and comprehensive coverage. Gap insurance covers the difference between what you owe on your car and its actual cash value at the time of the accident. Comprehensive coverage covers damage to your vehicle caused by things other than a collision, such as theft, vandalism, or natural disasters.

After a total loss, your insurance company will pay out the actual cash value of your vehicle at the time of the accident. This is the amount your car was worth immediately prior to the accident, taking into account factors such as age, mileage, and condition. If you owe more on your car than its actual cash value, you may be left with a gap in your finances. This is where gap insurance can be beneficial.

It’s important to review your insurance policy and understand what types of coverage you have before an accident occurs. This will help you make informed decisions when dealing with a totaled car.

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Negotiate with the Insurance Company

If your car is deemed a total loss, the insurance company will make an offer to settle the claim. It’s important to understand the insurance company’s offer and negotiate if you feel the offer is unfair.

To negotiate a settlement with the insurance company, gather as much information about your car as possible, including its make, model, and condition. You can use resources such as Kelley Blue Book or NADA Guides to determine the value of your car.

If you feel the insurance company’s offer is too low, provide evidence to support your case. This may include receipts for recent repairs or maintenance, pictures of the vehicle before the accident, or quotes from dealerships for a similar vehicle.

It’s important to remain polite and professional when negotiating with the insurance company. Be clear about your expectations and what you believe your car is worth. With patience and persistence, you may be able to reach a fair settlement.

Decide What to Do with the Car

If your car has been declared a total loss, you have a few options for what to do with it. One option is to keep the car and have it repaired. However, this may not be the best option if the car is severely damaged, as repairs may be costly and time-consuming.

Another option is to sell the car as is. You can sell it to a salvage yard or to a private buyer who is interested in fixing it up. Keep in mind that the value of a totaled car is significantly lower than that of a functioning vehicle. Be prepared to negotiate with potential buyers and don’t expect to get top dollar for your car.

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If you choose to sell the car, be sure to get a salvage title from the DMV. This title indicates that the car has been declared a total loss and is no longer roadworthy. It’s important to be honest with potential buyers about the car’s condition to avoid any legal issues down the road.

Lastly, you can choose to donate the car to a charity. Some charities accept non-functioning vehicles and will arrange to have them picked up for free. Not only will you be doing a good deed by donating your car, but you may also be eligible for a tax deduction.


Dealing with a totaled car can be a stressful and overwhelming experience. It’s important to understand the process after a total loss and to be aware of your insurance coverage. By assessing the damage, negotiating with the insurance company, and understanding your options for the car, you can make informed decisions that will help you move forward.

Remember, when dealing with insurance companies, it’s important to be patient and persistent. Don’t be afraid to ask questions and seek advice from professionals. By doing so, you can ensure that you receive fair compensation for your vehicle and can move on from the accident with peace of mind.

For more helpful resources and tips on banking, finance, and investment, visit the Grunia website today.

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