Being involved in an auto accident is never pleasant. After you have controlled your jitters, make sure you get the insurance information from everyone involved and talk to the police. Once all of that is taken care of, you will have to contact your insurance company. They will send over an adjuster to look at your vehicle or have the vehicle towed to their facility. If the damage is bad enough, your car will be declared a total loss. This is called “totaling” a car. While it does not necessarily mean your car cannot be fixed, you need to understand the process of totaling a car so that you know how to proceed.
A car is declared totaled for several different reasons, and the reason may or may not be clear to you. Most often it is totaled when the cost to fix the car far exceeds how much the car is worth. This happens to older cars with only minor damage, as well as newer cars with severe damage. Sometimes a newer car with severe damage may not be totaled because the value of the car is so high.
If your car is totaled, the insurance company will write you a check for the market value of the car after subtracting any deductible you have. The car is no longer yours, as the insurance company has “paid” you for it, and it is sent to the junk yard. Often the car is auctioned to be used for parts. The insurance company receives any money made off of the car at this point.
You may think you cannot keep your totaled car. This is not true. If you want to keep your car and try to fix it or sell it for parts yourself, your insurance company will still give you a check for the car’s value. They will, however, deduct not only your deductible but also what the car would have earned them at the auction. You will then have to get the repairs done at your own expense. This is usually not the best option, especially with severe damage, because repairs cost so much. Also, some states require the owner of a totaled car to buy a special salvage title or go through an inspection after the car has been fixed. The car insurance company may even refuse to let you keep the car because it would bring them such a high price at auction, depending on its age and the amount of damage it has.
As soon as you think your car may be totaled, make the decision as to whether or not you are going to want to keep it. Once the insurance company has the car, you will have a hard time getting it back. If you do change your mind after turning it over to the insurance company, you will have to go to the auction to buy the car. This costs you extra money, and may not even be possible. See, many states require that you have a special license to attend these auctions. If you do want to keep your car, make sure you know what the laws are in your state. Also, make sure you can afford to fix it.
After having your totaled car fixed, you may find it difficult to get the car insured again. The insurance company may require you to have the Department of Motor Vehicles inspect the car and approve it for driving. At this point, if the car passes this inspection, you will be able to get liability insurance. However, since the car has already been totaled, other levels of insurance are likely not going to be given to you.
Most likely you will decide to take your money and let the insurance company deal with the wrecked car. However, when you get that check you might be surprised at its amount. Likely it will not be enough to buy you another car like the one you had. That is because the settlement check is determined based on the value of the car. The insurance company will base this value on the car’s mileage, any features you added to the car, and the value it would have in your local market.
You may feel that the settlement is not a fair appraisal of the value of the car. If so, you will need to hire an appraiser who is independent from the insurance company. This will cost you money out of your own pocket. This appraiser will assess the value of the car, and you need to have a written copy of the appraisal. You can show this to the insurance company, and they may increase the amount they are paying your for the car. If they refuse to do so, your only options are to go to court or hire an arbitrator to work through the disagreement. This may end up getting you more money from the insurance company, but keep in mind that every step from the appraiser to the court case will cost you, and you may end up with less money than you started with in the first place.