When is My Car Considered “A Total Loss”?


In the unfortunate event that your [insured] car is involved in a major accident, your auto insurance company will have to consider the following factors for it to declare your totaled vehicle as a “total loss”: The car’s actual value, and cost estimates with regards to repairing damages covered by your insurance.  If repair costs exceed the car’s market price, it will be totaled by the insurance company, thus entitling you to cash settlement instead of payment for your wrecked car. Note that this convention is greatly affected by the maker of your vehicle. While a comparatively minor accident could be sufficient for the company to declare an inexpensive car as “totaled” (the same goes for older/poorly maintained vehicles) a serious accident may not be enough to cause more expensive models to be considered as a total loss (regardless of how mangled it is) because having it repaired is actually cheaper than the car’s initial value.

What happens when my car is declared a total loss?

As defined in your insurance policy, your insurance company is obliged as “making you whole”. Basically, this means that you have to be left in more or less the same state or your financial position holding prior to the accident. The insurance company shall issue a check on the car’s actual value, less any deductibles stated on the policy. Having settled the damages, your totaled car is sent to the salvage yard, which usually auctions off your car to bidders for salvageable parts. Any proceeds of the auction will be kept by your insurance company.

Can I get a declared “total loss” repaired?

Should you wish to keep the car, some companies will simply forgot the process of auction and return the car to the owner. This happens when the car is like 10 years of age. In these cases, a forecast value of what your car could have been sold for at auction will be deducted from the financial obligations that your company owes you. It is then left to you, the owner, to pay for necessary repairs. Note that the insurer must be informed once you want to retrieve your car back. At the time the car reaches the salvage car yard, getting the car is of little chance since auto salvagers attend to these auctions only if they are licensed.

Remember, Even if you are required by the insurance company to have your damaged car kept, you still have to consider the expenses you have to bring it into running condition. It also depends on your state’s special requirements like that of buying salvage car titles and the procedures of car checking by the inspector of the state right after repair.