What Happens If My Car Is Totaled?

Hearing that your car is “totaled” after an accident can feel like a gut punch. But what does it really mean — and what happens next? Whether it’s a fender-bender gone wrong or a major collision, knowing how insurers handle totaled cars can help you prepare.

1. What “Totaled” Really Means

A car is considered “totaled” when the cost of repairs is more than the car is worth.

• Some states set a percentage (like 70% or 80%) of the car’s value as the threshold.

• Insurers may decide to total it even if repairs are possible, simply because it’s not financially reasonable.

2. How the Insurance Company Calculates It

The insurer looks at:

• Actual Cash Value (ACV): What your car was worth before the accident, factoring in age, mileage, and condition.

• Repair Estimate: Cost of parts, labor, and related expenses.

• If repairs exceed the ACV (or the state’s threshold), the car is declared a total loss.

3. What Happens After Your Car Is Totaled

• The insurance company pays you the ACV (minus your deductible).

• You hand over the damaged vehicle and its title.

• The car is typically sold for salvage at auction.

If you still owe money on the car loan, the payout goes to the lender first — you may still owe a balance.

4. Can You Keep a Totaled Car?

Yes, but there are trade-offs:

• You’ll receive a reduced payout (the salvage value is deducted).

• You’ll likely need a “salvage title,” which lowers resale value.

• Repairs may not restore the car to safe condition.

5. How to Protect Yourself

• Review your insurance policy to understand how ACV is determined.

• Keep good records of your car’s maintenance and condition — these can support higher valuations.

• Consider gap insurance if you’re financing a car, so you’re not left owing after a total loss.

The Bottom Line

When your car is totaled, it’s not just about repairs — it’s about value, insurance rules, and financial protection. Knowing how the process works puts you back in the driver’s seat.

👉 If you’ve been in a car accident and need help navigating the insurance process after a total loss, fill out our quick questionnaire. FindLawFast will connect you with the guidance you need.

Disclaimer: This article is for general informational purposes only and should not be taken as legal or financial advice. Total loss rules vary by state and insurer. Always consult with a qualified professional for advice on your situation.