In the car insurance industry, a totaled car is one that’s been damaged to the point that it either isn’t repairable or needed repairs would cost more than the car would be worth once fixed. “Totaled,” to an insurer, means “total loss.” It makes more sense for them to write you a check for the depreciated market value of the vehicle prior to becoming damaged (minus your deductible) than to spend more money than the car’s value after repairs.

Of course, in order to be eligible for any insurance payout on your car you have to have the proper coverage in force. This means that if your vehicle was damaged in a collision of some sort, that you elected to have collision coverage in your policy. If the damage was done by some event other than a collision such as a fire, flood or being hit by a huge tree, your policy would have to include comprehensive coverage.

Who Decides When Your Car Has Been Totaled?

In order for a car to qualify as being totaled, two numbers are needed by the insurer: the cost of needed repairs and the worth (actual cash value) of the car at the time of the accident. If the first number is equal to or greater than the second number, the insurance company will likely cut their losses and issue a check for the actual market value of the vehicle minus your deductible amount.

Figuring The Car’s Repair Costs

Vehicle repair costs are estimated by an insurance company claims adjuster and given to you so that you may have your own repair estimate done for comparison. Your insurer will probably expect you to obtain at least one repair estimate of your own for comparison to their estimate.

Figuring Your Car’s Actual Cash Value

Determining the actual cash value that the totaled car was in at the time of the accident can be accurately done using a variety of means. Your insurer will look in your local area for cars that are the same year, make and model as your car, with approximately the same options and the same number of miles. Car values can be obtained from local used car sellers or online sales.

If you want to keep your totaled car, let your insurance company know as soon as possible. The insurer will pay your claim in the planned amount, minus the vehicle’s salvage value.