Getting into a car accident can be extremely stressful. If your car gets severely damaged, it may even be declared a total loss, or “totaled” by the insurance company. But what happens after your car is declared totaled?
If the cost of a car’s repairs after an accident exceeds the value of the car, it will be considered as totaled. This means that if it costs more to fix the car than it’s worth, your insurance company may declare it a total loss. There are a few reasons why a car may be totaled, including:
- A serious accident that causes significant damage
- Severe weather, such as a flood or hailstorm
- Theft or vandalism
If your car gets totaled, there are actually a couple options about what you can do next about your car.
Determining the Extent of Damage
The first step in dealing with a wrecked car is to determine the extent of the damage. The insurance company will usually send an adjuster to assess the damage and determine if the car is a total loss. This process may also involve taking the car to a mechanic for a more thorough evaluation.
During the evaluation process, the adjuster will look at things like the cost of repairs, the age and condition of the car, and the current market value. After that, then they will calculate the actual cash value (ACV) of the car, which is the amount the car was worth before the accident. If the cost of repairs goes past the value, the car will likely be declared a total loss.
The Insurance Claim Process
If your car is totaled, you’ll need to file an insurance claim, even if you were the victim of the car accident. This involves contacting your insurance company and providing them with information about the accident and the extent of the damage. As long as you have the right coverage in place, such as collision coverage, your insurance company can help cover the cost of repairs or a replacement car.
After you file a claim, the insurance company will usually send an adjuster to evaluate the damage and determine if the car is a total loss. Then they will make an offer to pay you the ACV of the car, minus your deductible. You can negotiate with the insurance company for a higher payout if you believe the offer is too low. Keep in mind that the insurance company is only required to pay you the fair market value of the car.
Options for a Totaled Car
If your car is totaled, you have a few options to pick what to do with your car. Some of these options include:
- Repairing the car
- Selling the car
- Donating the car
Repairing the car:
If the cost of repairs is less than the ACV, you may be able to have the car repaired. However, keep in mind that the insurance company will only pay up to the ACV of the car, so you will need to cover any additional costs out of pocket.
Selling the car to a salvage yard:
If the car is not repairable, you can sell it to a salvage yard. They will pay you for the value of the scrap metal, which may not be much. However, this can be a good option if you don’t want to deal with repairing or disposing of the car yourself.
Donating the car:
Another option is to donate the car to a charity. They will typically tow the car away for free and use the proceeds from selling it to fund their programs. This can be a good option if you want to do something positive with your totaled car.
Salvage Title and Rebuilt Title
If you decide to keep the car after it’s been declared a total loss, it will have a salvage title. This means that the car has been significantly damaged and the insurance company has paid out a claim on it. It can be difficult to get insurance on a salvage title car, and it may also be more difficult to sell in the future.
If you decide to repair the car and make it roadworthy again, it may be eligible for a rebuilt title. This means that it has been repaired and has passed a safety inspection. However, keep in mind that a rebuilt title can also make it more difficult to sell the car in the future.
Dealing with a totaled car can be a difficult and stressful experience. However, by understanding your options and working with your insurance company, you can make the best of a difficult situation. Remember to consider factors like the cost of repairs, the value of the car, and the potential resale value when deciding what to do with your totaled car.