What to Do After Car Is Totaled

An accident is never an enjoyable experience. It is upsetting and can be very inconvenient, especially if your car is totaled.

Typically if your car is totaled, the insurance company will write you check for the Actual Cash Value (ACV) minus your deductible. At that point, the car belongs to the insurance company, which means that it will be stripped for usable parts and sold for scrap. The insurance company will keep any money it makes from it.

If you want to keep the car, perhaps to try to fix it, you will need to let your insurance company know. Trying to fix a totaled car presents its own set of unique issues and assuming you can afford it, may not even be insurable. Some car insurance companies will only insure a totaled car that has been repaired until the Department of Motor Vehicles (DMV) inspects it and gives it the all-clear. Even then, you won’t be able to purchase every level of coverage they offer, in fact, you will likely only be able to purchase liability coverage.

You will likely decide to accept the insurance company’s settlement but you may be surprised just how low it is when you get it. In fact, it may not even be enough to serve as a down payment towards a new car. If you feel your settlement is not fair, you have the right to hire an independent appraiser but it will have to come out of your pocket. The appraiser will provide you a written copy of their opinion. You can present this to your insurance company and they may raise their settlement but it isn’t a sure thing. If you’re still not pleased with this result you can initiate a lawsuit, which could end up getting you more money but keep in mind that a lawsuit will cost you money as well.