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Filing a Car Insurance Claim After Totaling Your Car

It’s one of the most dreaded accidents — totaling your car. When a car is no longer driveable due to a collision, there are a lot of questions that must be answered. Navigating this process can feel overwhelming and daunting, especially as you navigate your recovery. To help you get clarity on how the car insurance claim process works after totaling your car, here’s what you need to know. 

What Happens Next After Totaling Your Car?

Your car insurance determines if your car is totaled. If you’ve been involved in a collision, it’s important to contact your insurance agent and start filing an insurance claim.

Once you file a claim, your insurance company will determine whether a car can be repaired or whether the repairs the vehicle’s actual cash value. If it does, your car will be considered totaled, and your insurance company will issue you a check for the actual cash value of the totaled vehicle. You will still be responsible for your deductible.

Who Decides on Your Car’s Value?

There are many ways that insurance companies determine the actual cash value of your totaled vehicle. Factors often taken into consideration include:

  • Your vehicle’s age
  • The condition of your vehicle
  • Current mileage 
  • Resale value
  • Comparable values of similar vehicles in your area

What Happens to an Outstanding Loan on a Totaled Car?

If you were financing a vehicle when it was totaled, your insurance company would pay the remaining balance on the totaled vehicle first. That payment will often be sent directly to your lender. Anything outstanding will be sent to you.

Sometimes, the insurance company will send a lump sum for the actual cash value to your lender, even if that actual cash value exceeds the amount you owe. It’ll then be up to your lender to issue you a check for the amount above and beyond what you owed on the vehicle. 

If you still owe more on the vehicle than the actual cash value, you will be responsible for paying the remaining balance on your loan. For example, if your vehicle’s actual cash value was $10,000, but you owe $12,000 on your loan, you’ll be responsible for paying the $2,000 surplus out of pocket.

What if the Total Loss Isn’t Your Fault?

Two instances in which your car could be totaled without you being at fault — a natural disaster occurs, or another driver hits your car. 

Your comprehensive insurance kicks in to help pay for your replacement vehicle if your vehicle is totaled due to a natural disaster. Just as your insurance company would in the event of a collision, your insurance company will likely reimburse you for the actual cash value, minus your deductible.  

If another driver is determined to be at fault, your insurance company will often seek payment from the other driver’s insurance company. Sometimes, your collision insurance may kick in first, while the insurance companies work together to settle the payment. Some insurance companies will also help you recover the cost of your deductible in your insurance payout.

Having Good Car Insurance is Critical

Having good car insurance is critical, especially following an accident where your car is totaled. Knowing you are properly covered can ease a lot of stress and strain. If you’re unsure about the type of coverage you have, talking to one of our insurance agents can help you better understand what proper coverage looks like for you. We’ll walk through your current policies and help you identify where you can save money on your car insurance in Missouri while maximizing your coverage. Contact us to request a car insurance proposal or get started.