My Car Was Totaled and I'm Not at Fault: Now What?

A total loss is an insurance determination that a vehicle’s repair cost exceeds its actual cash value (ACV), often based on a state-mandated threshold. When you’re not at fault, the process involves filing claims with multiple insurers to get compensated for your vehicle and deal with the aftermath, such as outstanding loans and finding a new car.

An accident can leave you feeling overwhelmed and uncertain about what comes next. A local car accident attorney can guide you through the claims process and help secure fair compensation for your totaled vehicle.

The Total Loss Process

Even if you’re a cautious driver, you may still be in an accident because of another motorist’s negligence. Here’s what to do when their actions result in your car being totaled.

Step 1: File Insurance Claims

After exchanging phone numbers and other contact information, the first step following an accident is to file an auto insurance claim​ with the at-fault driver‘s insurance company. You should also file a claim under your own insurance policy and ascertain whether you have collision coverage, subject to any deductible.

Step 2: The Claims Adjuster‘s Assessment

The insurance adjuster​ will use information from your claim and a police report (if available) to determine the vehicle’s value before your accident. The documentation included in your insurance claim should be carefully assembled to ensure that you are fully compensated. This will ideally include:

• Your out-of-pocket expenses
• An appraiser’s report
• Any medical bills

Your insurance company will assist you throughout the claims process, communicating with the at-fault party or their adjuster to determine the dollar amount of the claim.

Step 3: Calculating “Total Loss“

The insurance adjuster‘s number is then compared to the cost of repair. Insurance companies use a Total Loss Formula (TLF) to determine whether it’s more cost-effective to repair a vehicle​ or declare it a total loss. The TLF is calculated as the cost of repairs plus the salvage value. If that number equals or exceeds the car’s ACV, the car is considered a total loss.

A total loss is declared by the car insurance company when the cost of repairs exceeds a percentage of the total value set by the insurer. This percentage is constrained and varies by state law, which frequently requires a declaration of complete loss when damages are about 70% or more of the vehicle’s total value.

Step 4: Receiving the Settlement Offer

When a car has been totaled, the insurer must compensate you for the vehicle’s value prior to the accident. This value is based on the car’s Fair Market Value and its Actual Cash Value (ACV).

• Fair Market Value is the price that a willing buyer would pay to a willing seller, assuming both have reasonable knowledge of the facts.
• Actual Cash Value (ACV) is the fair market value of the car minus depreciation. Insurance companies use the ACV​ to determine payout amounts.

They won’t replace your car or guarantee that the vehicle’s pre-accident value will be enough to purchase a replacement.

Step 5: Handling DMV Issues

After your car has been declared a total loss, there are several DMV-related steps you’ll need to take. This is a general guide, so always verify with your local DMV​ or an auto accident attorney for specific guidance.

• Transferring the car’s title: Once you’ve accepted a total loss payout, you’ll need to sign the title and transfer it to the insurance company​.
• Canceling your registration: You should cancel the registration​ of a totaled vehicle to avoid liability for any future tickets​.
• Turning in your license plates: After canceling registration, most states require you to turn in your license plates​.

Common Challenges and What To Do

Several potential issues can arise when a car is totaled. We cover a few of the most common ones below.

Getting a Rental Car

One key concern following a total loss accident is transportation. Many auto insurance policies include rental car coverage, which pays for a rental car​ while your claim is being processed. Check your policy or talk to your insurance agent to understand the specifics.

The Insurer’s Offer Is Too Low

An insurer’s value estimate of the wrecked vehicle may seem too low. For example, the Kelley Blue Book value may not account for vehicle modifications​ or recently replaced tires. By providing comprehensive information to support your claim, you can increase your chances of a better payout.

Following an offer, you may send a reply that includes arguments and evidence for a higher estimate. If the insurer is unwilling to value the vehicle properly, you may need to sue them in civil court​.

My Loan Balance Is Higher Than the Payout

A problem may arise if the amount outstanding on your car loan is greater than the insurer’s estimated value. If this happens, you may find yourself still paying for a car you can no longer drive unless you have gap coverage. The car’s destruction doesn’t alter the loan agreement​.

Learn more about your options for a financed car that’s been totaled in our guide: My Car Was Totaled, But I Still Owe Money On It: What Happens Now?

Your Options for the Totaled Vehicle

You have a choice to make after the settlement payment​ is determined: You can either let your insurance company take possession of the totaled car, or you can keep it. We outline the details of each option below.

Letting the Insurer Take the Car

If you accept a full settlement from your insurance company, you agree that the insurer will take possession of the totaled car. They will then sell it to a scrap yard or repair it and put it back on the market. You cannot, in most situations, keep the wreck to sell or use for parts if you accept the full settlement.

Keeping the Car (and Understanding Salvage Title/Value)

It may be possible to negotiate with the adjuster to keep your totaled vehicle. If you do, your insurance payout will be reduced by the salvage value—the estimated worth of the totaled vehicle as is.

When an insurance company declares a car a total loss, the vehicle’s title is typically replaced with a salvage title​. This indicates that the car has been severely damaged.

Buying a New Car

After your insurance company has paid out the ACV of your totaled car, you might be in the market for a new vehicle. If you had an auto loan on your totaled vehicle, the insurance payment would first go to your lender. If your car’s ACV exceeds what you owed, you can use the surplus towards a down payment on a new car.

If Your Car Was Totaled, Get Help From a Car Accident Lawyer

When your car is totaled and you’re not at fault, it may feel like you shouldn’t have to do much to get compensated. However, insurers employ expert legal professionals to help them protect their rights and avoid payouts wherever possible. You’ll want experienced legal help on your side, too.

Because state law is relevant, your lawyer should be licensed in the state where your accident occurred. FindLaw’s directory of car accident attorneys​ can get you started. Select your state or city to review contact and ratings information for local experts. Many law offices offer free consultations.