What to Do After Your Car Is Totaled in an Accident

June 20, 2025

car accident with a red and blue car

*Updated November 14th, 2025

If your vehicle is severely damaged in an accident, your insurance company may determine that repairing it would cost more than its actual cash value. In this case, the insurer will declare the car a total loss and consider the damaged vehicle a totaled car. When your insurance company decides to total your car, it means the vehicle is deemed a total loss, and the insurer offers a payout based on its pre-accident fair market value and what the car is worth at the date of the accident.

This decision has financial and practical consequences. It affects how much money you’ll receive, whether you still owe money on a car loan or lease, and how quickly you’ll need to secure a new car or another vehicle. It also raises questions about how insurance companies calculate the value of your totaled vehicle, what your rights are in the insurance claim process, and what happens next once your car has been totaled in an accident.

Understanding how total loss claims work—step by step—puts you in a stronger position to negotiate, minimize out-of-pocket expenses, and make informed choices about the next steps to take. This guide walks you through what to expect, how to respond, and what to do if the insurance company’s payout doesn’t meet your needs.

How Insurance Companies Determine If a Car Is Totaled

It’s important to understand how insurance companies determine whether a vehicle is a total loss. This decision isn’t arbitrary—it’s based on comparing your car’s actual cash value (ACV) to the cost to repair the damaged vehicle.

Insurance companies declare a totaled vehicle when the cost of repairs exceeds a set percentage of its actual cash value or meets the total loss formula under state rules. While the threshold varies by insurance provider and state, most follow well-established guidelines.

Total Loss Calculation Methods

States generally use one of two methods to decide whether to declare it a total loss.

Percentage Threshold States

Most states use a simple percentage of the vehicle’s ACV. Common examples include:

  • 75% – Alabama, Iowa, Kansas, New York

  • 80% – Florida, Mississippi, Oregon

  • 70% – Arkansas, Indiana, Michigan, Wisconsin

  • 100% – Colorado, Texas

If the cost to fix the vehicle exceeds the applicable threshold, insurance companies will likely consider it totaled.

Total Loss Formula (TLF) States

Some states use a more detailed total loss formula:

Repair Costs + Salvage Value > Actual Cash Value = Total Loss

This method, used in states like California, Connecticut, Delaware, Georgia, and Washington, means insurance companies must total your car if repair costs plus salvage value are higher than its ACV.

Factors Considered by the Insurance Adjuster

Even with thresholds, adjusters weigh additional factors:

  • Structural or frame damage

  • Airbag deployment

  • Hidden or future damage risk

  • Market value and fair market value

  • Value of the vehicle before the accident

  • Salvage value of the damaged vehicle

  • Relevant state regulations and insurance policy rules

Typical Timeline

Most insurers inspect the vehicle and determine whether the car is deemed a total loss within 5–10 business days, though delays happen with disputed valuations or complex claims.

What to Do Immediately After the Accident

Your actions immediately after being involved in an accident affect both safety and your total loss insurance claim. Following these steps protects your financial interests and strengthens your position.

Ensure Safety and Emergency Response

Safety is the priority:

  • Check for injuries

  • Move to a safe location if possible

  • Turn on hazard lights

  • Call 911 for medical needs

When to Call the Police

A report is required for:

  • Injuries

  • Significant property damage

  • Fault disputes

  • Suspected impaired driving

A police report supports your auto insurance claim, especially if another driver is at-fault.

Document the Accident Scene

Thorough documentation helps determine whether the car is a total loss.

Take photos of:

  • All damage

  • Road conditions

  • License plates

  • Traffic signals and markings

Collect:

  • Driver and insurance information

  • Witness details

  • Officer badge numbers

Avoid discussing fault—especially in an accident where the at-fault driver caused damage.

Notify Your Insurance Company

You must contact your insurance company within 24–48 hours. Delays can complicate your insurance claim.

Your insurer will:

  • Assign an adjuster

  • Provide next steps

  • Explain your car insurance coverage

  • Review whether collision coverage or property damage liability applies

Filing Your Insurance Claim

The total loss claim process has several steps before settlement.

Required Documentation

Gather:

  • Police report

  • Photos

  • Repair estimates

  • Medical reports (if applicable)

  • Registration and proof of ownership

  • Maintenance records

  • Receipts for upgrades

The Investigation Process

Your insurance provider will:

  • Assign an adjuster

  • Inspect damage

  • Review repair estimates

  • Calculate ACV

  • Determine whether the vehicle is a total loss

Typical timeline:

  • Adjuster contact: 1–3 days

  • Inspection: 3–7 days

  • Total loss determination: 5–15 days

  • Settlement offer: 10–30 days

Understanding Your Settlement Offer

When your insurer totals your car, the settlement is based on ACV minus any deductible.

How Insurers Calculate ACV

Insurers determine the value of your totaled vehicle using:

  • Comparable vehicle sales

  • Mileage

  • Condition

  • Optional equipment

  • Market value and regional trends

  • Depreciation

Databases like Kelley Blue Book, CCC, or Mitchell are commonly used.

Common Deductions

  • Deductible

  • Outstanding car loan balance

  • Unpaid premiums

  • Salvage value (if you keep the car)

Reviewing and Evaluating the Offer

Request:

  • A detailed valuation report

  • Comparable vehicle listings

  • Condition adjustments

  • Deduction breakdown

Watch for red flags like out-of-area comps or unjustified condition adjustments.

Disputing a Low Settlement Offer

If the insurance company undervalues your car, you can challenge the offer.

Gather Evidence

Use:

  • Kelley Blue Book values

  • Local comps

  • Dealer quotes

  • Photos and maintenance records

  • Proof of upgrades

Negotiation

  • Submit your counteroffer in writing

  • Provide documentation

  • Stay professional

  • Discuss discrepancies with the insurance adjuster

Appraisal Clause

If negotiation fails, your policy’s appraisal clause allows:

  • Independent appraisers for both sides

  • A neutral umpire if they disagree

  • A binding result

Use this if valuations differ by $3,000 or more or if dealing with a rare vehicle.

What Happens to Your Totaled Vehicle

Once the insurance company declares your car a total loss, you must decide how to handle the vehicle.

Standard Settlement Process

When accepting the insurer’s payout:

  • You sign the title to the insurer

  • Insurer sells the vehicle to a salvage yard

  • You receive payment, minus deductible and loan balance

Payment usually arrives within 5–10 days.

Option to Keep Your Car

You may keep your car after it’s declared a total loss by paying the salvage value.

Things to consider:

  • Repair costs

  • Salvage or rebuilt title implications

  • Future insurability

  • State inspection requirements

  • Ability to drive the vehicle legally

Some people keep the car for parts or sell it to a salvage yard or rebuilder.

Special Situations

Leased or Financed Vehicles

Outstanding Loan Balances

If you owe more than ACV:

  • Settlement goes to the lender

  • You pay the remaining balance

This is common without gap insurance and when the value of your vehicle has depreciated quickly.

Gap Insurance

Gap insurance covers the difference between ACV and the loan balance. It’s crucial for:

  • New vehicles

  • Small down payments

  • Long-term loans

When You’re Not at Fault

If another driver is at-fault:

  • File with their insurer

  • Their property damage liability covers your loss

  • You may recover your deductible

Uninsured/underinsured coverage applies if the at-fault driver lacks sufficient coverage.

Your Transportation Options After Your Car Is Totaled

Rental Car Coverage

Rental car coverage pays for temporary transportation. It typically includes:

  • Daily limits

  • Total payout limits

  • Coverage until settlement

Choose a rental vehicle that fits your needs and budget.

Using Your Settlement

Use your payout to:

  • Make a down payment

  • Get a new vehicle or certified pre-owned car

  • Plan ahead to avoid negative equity

  • Budget for taxes, registration, and insurance rates

Start car shopping while your claim is in progress to shorten rental vehicle costs.

FAQs

Can I keep my totaled car?
Yes. You can keep the car by paying the salvage value, though a salvage title affects resale value and insurance coverage.

Do I still owe money on a totaled car loan?
Yes. You still owe the loan balance if the insurance payout is less than what you owe, unless you have gap insurance.

What if I disagree with the valuation?
You can negotiate, provide evidence, or request appraisal.

Will a totaled car affect my insurance rates?
If you were at-fault, your insurance rates may rise. Comprehensive claims usually have less impact.

How long does the total loss process take?
Typically 30–45 days, depending on complexity.

Conclusion

When your car is totaled, taking prompt, informed action is the best way to protect yourself. Document the accident, file a claim quickly, and familiarize yourself with how insurance companies determine whether a car is a total loss. Research the value of your car thoroughly before accepting any settlement offer.

Remember that insurance companies focus on controlling costs, but you have the right to negotiate if the offer doesn’t reflect the true value of your vehicle. If your claim involves an accident where the at-fault driver disputes liability or if you suspect bad faith, consider consulting an attorney.