f you ever get into a car accident, hopefully, the damages to your vehicle are not too severe. And, hopefully, no one suffers any injuries. If you are ever involved in an accident where your car suffers considerable damage, your insurance company may deem it what is called a total loss. This means that the cost to fully repair your car back to its original state before the accident would cost more than the car’s market value.

What does it mean when your car is deemed a “total loss”?

If your car is deemed a total loss, that means that it is not repairable or that the costs to repair it are more than what it is worth. There are a number of factors that go into considering whether or not a car is a “total loss”. If your car is older and has more miles on it, its market value will be less.

What type of insurance coverage covers a totaled car?

There are two types of insurance coverage that will pay out your car’s Actual Cash Value (ACV if it is totaled.

Comprehensive Coverage: This type of car insurance coverage covers damage or a total loss caused by something other than a collision with another vehicle i.e. fire, fallen trees, etc.

Collision Coverage: Covers damage or total loss caused by an accident with another vehicle.

What if you have a lien on your car?

If your car is totaled before you finish paying off the lien, the insurance company will pay the lien first and then send you what is left over (if there is anything). If you owe more for your vehicle than its actual cash value, it will be your responsibility to pay the difference unless you have gap insurance.

What should you do if you think your car has been totaled?

Once you file a claim, an insurance adjuster will assess the amount of damage or review your repair shop estimate. Once the market value of your car is determined, one of two things may happen. You will either be offered a payout to repair the car or be notified that your car is indeed a total loss. Once you accept that your car is a total loss, you must sign your vehicle over to the insurance company.

If you have any questions related to your insurance, please do not hesitate to call us at (301) 948-2010. We’re here for you!