When your car is a total loss, it means the cost to repair the car exceeds the value of the car. If your car is declared a total loss your insurer may replace your totaled car with an equivalent one or issue payment for the actual cash value of the totaled vehicle.
Once you file a claim, the insurance company will determine whether the car is a total loss. Depending on your state's laws, your car may be totaled if the cost of repairs exceeds a certain percentage of the car's value, such as 75%. If your state does not have a specific total loss threshold, your vehicle will be considered a total loss if the cost of repairs plus the salvage value is greater than the car's actual cash value (ACV).
Insurance Payout for a Total Loss Claim
For a car that was totaled by an accident, you will be reimbursed by the other driver's property damage liability insurance if they were at-fault or your own collision insurance if you caused the wreck.
If the damage was caused by something other than an accident, like vandalism or a natural disaster, you can receive a total loss payout from your own comprehensive coverage.
What to Do If Your Car Is a Total Loss
If you think the insurer undervalued your car, you can present evidence and negotiate.
You will likely need to send your insurance company your keys, remove your license plates and personal items from the car, and sign over the title.
If your car was leased or financed and you have gap insurance or loan/lease payoff coverage, file a claim.
For more information, check out WalletHub's complete guide to totaled cars.