Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health in...

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Reviewed by Jeffrey Johnson
Insurance Lawyer

UPDATED: Jul 14, 2021

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Here's what you need to know...

  • If your vehicle has been totaled, that means the insurance company has determined one of two things
  • The insurance provider may determine that your car is not repairable, or it will cost more to repair than your car is worth
  • In this scenario, one of three things may happen between the insurance provider and you
  • You may either agree or disagree on your vehicle’s value, which will lead you on different paths to settlement
  • You may also reach an agreement with the provider to keep your totaled vehicle, which may result in a reduced settlement amount

Finding out that your car has been declared a total loss, often referred to as being totaled, can be an upsetting experience. However, there are a few things that happen once a car has been declared a total loss.

Depending on the extent of the damages and the age of your vehicle, you may have different options available to you.

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You And the Provider May Agree On a Settlement

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Agreeing with the settlement amount the provider determines is often the simplest, most straightforward way to resolve a totaled car claim.

The insurance provider often reaches this conclusion by determining your vehicle’s current value compared to the repair costs.

If the insurance provider determines that it will cost more to repair your car than your car is worth, then they may declare it a total loss.

In these situations, the insurance provider is obligated to pay you the amount your vehicle was worth in the moment before the accident.

When the insurance provider is determining this value, you may also complete independent research of your own. This may help you in understanding how the provider reached their settlement amount.

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You And the Provider May Not Agree On a Settlement

While the insurance provider may declare your vehicle a total loss, you may not be willing to accept that determination. In situations like this, there are a couple options you may be able to pursue.

One of your options is to hire an independent appraiser, which the insurance provider may also do.

This allows a third-party, one that does not have a stake in your claim settlement, to determine your vehicle’s value. Through this process, the insurance provider may be able to reach a settlement amount that meets your expectations.

Another option is to pursue resolution through your own insurance provider. This resolution path will only apply if your car is totaled by another driver and you carry collision coverage on your auto insurance policy.

In this situation, your insurance provider may pay you for the loss of your vehicle.

Your insurance provider may then work to recover that amount from the at-fault driver’s insurance company.

If you cannot reach an agreement through an appraisal or do not carry collision coverage, then you may want to seek legal guidance.

Speaking with an attorney, especially one that deals with auto insurance and auto accidents, may help you gain perspective on what your options are and what you can expect from a settlement.

The Provider May Allow You To Keep Your Totaled Vehicle

Your third option in the event of a total loss is to work with the insurance provider to keep your car. Every state has different regulations on how this process works, just as each insurance provider has a different claim settlement process.

If you end up keeping your totaled vehicle, then your insurance provider is often required to report it to a state specific department that keeps track of totaled vehicles still in operation.

In situations where you end up keeping your totaled car, you may end up reaching a reduced settlement amount with the insurance provider.

In many instances, the provider will deduct different fees from your settlement, such as the salvage value, before paying out any remaining settlement amount.

Your Options

When your car has been totaled or been declared a total loss, there are a few different options you have.

You can agree with the insurance provider on your vehicle’s value, or you can disagree with the provider; both of which normally lead to a settlement at some point in the future.

Additionally, you can attempt to keep your totaled vehicle; this normally results in a reduced settlement from the insurance provider.

If you have concerns about how the process works for a totaled vehicle, it’s important to speak to your provider. They may be able to talk to you about how the process works, to prepare you in the event an accident occurs in the future.

You may also contact your state’s Department of Insurance if you have questions or concerns about the totaled car process in your area.

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