Depending on your coverage, your insurance may cover your vehicle if its totaled in a car accident. Read on to understand your insurance options and how to start the claims process. 

When Is a Car Considered Totaled?

The term totaled generally refers to a damaged car whose cost of repair approaches or exceeds its value, or a car that is deemed non-repairable based on the extent of the damage. Your insurer will estimate the vehicle’s damage and the extent of repairs necessary to bring it back to its pre-accident condition. They consider the fair market value of the vehicle to determine if it’s an appropriate candidate for repair or if it should be considered totaled.

If you’re seeking coverage for a total loss under your own policy, your policy provisions and your zip code will determine what you can recover. The legal threshold to determine whether the extent of the damage justifies a total loss varies among states—each state, and sometimes each locality has unique total loss laws that guide the claims process.

Starting the Total Loss Car Claims Process

A totaled car has usually sustained a lot of damage. If the totaled vehicle is considered undrivable or unsafe, it may need to be towed from the scene to a storage or repair location. It’s important to notify your insurance company of any loss as soon as possible to expedite the claims process, handle the vehicle’s damage, avoid unnecessary charges, and comply with policy conditions.  

After the claims process is initiated, your claims adjuster will coordinate a vehicle inspection with your car’s repair facility or storage location. They’ll evaluate the anticipated repair costs and the extent of the damage following the inspection process. Your carrier will present you with a settlement amount if the vehicle is deemed a total loss based on this assessment. 

Determining Fair Market Value of a Totaled CarLine art - two cars in an accident - what happens when your car is totaled?

Your insurer will perform a complete assessment of your vehicle to determine its fair market value. In addition to your car’s year, make, and model, your insurer will consider your car’s overall condition, any pre-loss damage it may have suffered, and the price of equivalent cars on the market. Your insurance carrier will establish the pre-loss value of your vehicle using industry-trusted resources and come to a figure accordingly.

If your car is totaled in an accident and you make a claim under your own policy, previous changes to your vehicle (aftermarket accessories or modifications) may not be eligible for coverage or may have limited coverage available under the terms of the policy. In other cases, these items may detract or add to your vehicle’s value.

Deciding Whether to Retain a Total Loss Vehicle

Even if your vehicle is totaled, you may still be interested in keeping it. While your insurer is subject to state regulations and obligations to any lienholders, this option may be available. However, there are some factors to consider before deciding to keep a totaled car:  

  • State laws. Some states have specific laws related to your ability to retain a totaled vehicle. If you‘re allowed to keep your vehicle after it’s deemed a total loss, most states will require a vehicle titling change. Your adjuster will learn if this option is available once your vehicle is totaled and how to move forward with the owner-retention process. 
  • Insurance. Some insurers may not permit owner-retention after a total loss. In addition, it might be hard to find a carrier that’s willing to insure your repaired car.  
  • Resale value. If you decide to keep your car, your insurer will typically pay the car’s pre-loss cash value, minus your deductible and the car’s salvage value—the anticipated value of the car in its damaged condition, which is typically recovered by your insurer after paying your claim. This can reduce the resale value of your vehicle by 20-40%, making it harder to find a buyer other than your insurer.  

If you don’t want to retain your totaled vehicle, your adjuster will coordinate the necessary paperwork to ensure a smooth exchange of the title to the insurer. This can include obtaining forms and documentation from you or your lender to facilitate a proper transfer of title to the insurance company. Your insurer will issue your payment once they receive the title and the completed paperwork.

Total Loss and Car Loans/Lienholders

Understanding the relationship to a lender or lienholder on your vehicle’s title is important, as it may have an impact on the amount you receive from your claim. During the total loss claims process, your insurer will obtain documentation from any lienholders on the totaled vehicle along with proof of the amounts they are owed. Your carrier is obligated to pay the lienholder their share of the total loss settlement. You will receive the rest of the settlement once your lienholder is compensated.

In the event of an accident, you don’t want to be caught without insurance. If you’re looking for affordable coverage, The General has a range of different policies for every driver, including drivers in the high-risk category and drivers with prior violations on their record. Get an insurance quote from us in under two minutes to see how much you can save.  


This material is intended for general information only and is only intended to help you understand the different aspects of the total loss claim handling process in general.  This information is not an insurance policy and does not refer or modify any policy provisions, limitations, or exclusions expressly stated in any insurance policy.  This information is expressly not intended, in any way, to provide legal advice or guidance on how to proceed with your total loss claim.  Please refer to your assigned adjuster and/or your policy contract for any specific information or questions on the applicability of coverage.

Coverages and other features vary between insurers, vary by state and locality, and are not available in all states. Whether an accident or other loss is covered is subject to the terms and conditions of the actual insurance policy or policies involved in the claim. References to average or typical premiums, amounts of losses, deductibles, costs of coverages/repair, etc., are illustrative and may not apply to your situation.