Understanding Total Loss: Steps To Take When Your Car Is Declared Totaled

If you've been involved in a motor vehicle accident, you may have just been informed by your insurance company that your car has been declared a total loss. If you're struggling to understand what this means, how it will impact you, and what to do after speaking with your insurance company, check out the answers to the two questions below.  

What Does It Mean When Your Car is Declared a Total Loss?

When your insurance company has deemed your car to be a total loss, this means that the cost of repairing your car would be more than the actual cash value of your car.

Insurance companies follow a number of guidelines and use a variety of resources when it comes to declaring a total loss. First, the insurance company will determine the actual cash value (ACV) of your vehicle. This is done with information such as the make, model, and year of the car, as well as how much mileage is on it. Next, the insurance company will obtain repair estimates. Then the insurance company will determine whether the car can be repaired for less than the car's ACV, and whether the car can be considered safe enough to drive after all repairs are completed.

What Happens After Your Car Has Been Declared a Total Loss?

If you've never dealt with a total loss before, the process may seem daunting. To make it easier for you, here's a quick breakdown of the steps that will follow your car insurer's decision.

  1. Your insurance deductible is paid, either by you or the at-fault party's insurance company.
  2. You will sign over your car's ownership to your insurance company, and they'll handle the proper disposal of the vehicle.
  3. You'll receive a check for the ACV of your car, minus any accident-related fees (such as the deductible). If you didn't own the car outright, the check will be sent to the company through which you were leasing or financing it.
  4. Once the transfer of your vehicle is official, you will need to contact your insurance agent to have the car officially removed from your insurance policy.

Keep in mind that the above steps may vary slightly, depending on the state you're in and the insurance company you're working with, but that your insurance agent can walk you through each step along the way.

If you have any more questions about what it means when your vehicle has been declared a total loss, contact your insurance agent directly. A company like Ahlquist Insurance can answer questions about your specific situation and provide you with the quick and reliable help that you need.