An average of six million car accidents happens in the U.S. every year. Three million people are injured in those accidents. 6% of those car accidents are fatal. 72% result in property damage. If you and your passengers walk away from a car accident unscathed, you're lucky. If you were injured, seek out medical attention immediately. Once you're feeling well, it's time to focus on your car. If the accident was serious enough, your insurance might declare your car totaled.
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But it's not always apparent if an insurance company will consider your car totaled. And most people have no idea what the appropriate steps are.
We want to help guide you through the process. Keep reading to learn what to do with a totaled car.
When an Insurance Company Considers Your Car Totaled
Whether or not an insurance company considers your car totaled depends on a few factors such as:
- The condition of the car
- State laws
- Your insurance policy
Insurance policies vary. However, if the car is worth less than the repairs and sometimes even if the repairs are at least 50% of the total value, they'll consider your car totaled.
How to Tell if Your Car Is Totaled
You may be able to determine if your car is totaled just by looking at it. Some factors that will easily tell you the car is a total loss are:
- The car isn't driveable
- Fluids are leaking
- Extensive damage to the frame
Do your own research to find out the value of your car by checking out Kelley Blue Book (KKB). While the KKB value is a guideline it will help you understand what your insurance company may value your car at.
Report the Accident to Your Insurance Company
If you've been injured in a car accident, seek immediate medical attention. After you've been treated, contact your insurance company to report the accident and file a claim.
You'll want to file a claim as soon as possible since it can take up for a month for them to do a proper investigation and then make an offer.
Use their App to File a Claim
Most insurance companies now have an app to help you accurately report the claim. You can also use the app to take photos of the damage and even schedule an appointment for an auto damage adjuster to inspect your vehicle.
If your policy allows for rental coverage, you can reserve a rental car to get around until your claim has been processed and settled.
Have the Car Towed
If you think the car is most likely totaled, find out which auto body shop is preferred by your insurance company. This will help speed up the claims process.
And preferred shops tend to hold your vehicle for no charge.
Locate Your Title
As soon as you're able, locate the title of your car. Especially if you believe the car is a total loss.
If you can't find your title, file for a lost title at your DMV right away. If the insurance company finds your car to be a total loss and you agree to their offer, you'll need to sign over the title to them.
The Insurance Company Will Make an Offer
Once your insurance company has assessed the damage you have options. If they consider it to be a total loss vehicle, the insurance company will offer to pay you the fair market value of your car before it was wrecked.
This can be a good deal if your car was paid off in full.
If You Agree to their Terms
If you agree to the terms of the insurance company's offer, you'll need to fill out a bit of paperwork. If you have a loan but still agree to the terms, you'll need to sign a power of attorney document that transfers ownership of the vehicle over to the insurance company after the loan has been paid in full.
Make sure you sign your signature on all documents exactly as you did on your title. Ask to fax or email your paperwork rather than going by snail mail to speed up the process and ensure nothing gets lost in the mail.
Don't Forget there's a Deductible
You'll probably have to pay a deductible. That means if your car is worth $10,000 but you have a $1,000 deductible, the insurance company will only give you a check for $9,000.
And it gets more complicated if you agree to their terms and you're still paying off your car. For instance, if your deductible is $1,000 and you still owe $5,000 for your car but it's worth only $2,000, the insurance company will only pay you $1,000.
That means, you still owe $4,000 for a totaled car. And you'll still have to buy a new car.
You Have Other Options
You may be able to get around that problem if you have gap insurance. You can also opt to keep your car and pay the difference to get your car repaired using your own money.
However, not all insurance companies will allow you to reclaim your car if you filed a claim with them, even if it's to make up the difference in repairs.
Partial Settlements
Thankfully, some insurance companies will let you work out an agreement where you can keep your vehicle as a salvage car while you receive a partial settlement.
You'll need to ask since most insurance companies won't readily advertise this as an option.
Options for Partial Settlements
If your insurance company allows you to take a partial settlement, you have two options:
- Salvage the car yourself
- Sell the car as-is
- Sell the car for parts
- Donate the vehicle to a charity
If you do donate your vehicle, you can write it off on your taxes.
Options for Selling Your Car As-Is
If your insurance company considers your car totaled but you don't want to take the full settlement offer, you can sell your car as-is. But doing so may take a while if you're trying to sell it privately.
There's not a huge market for private individuals wanting to buy a totaled car. But you can sell it to a cash car buyer company like ours.
We make the process easy. Click here to find out how it works.