18, May 2022

When Is A Vehicle Considered A Total Loss After A Crash?

If you’ve been involved in a motor vehicle accident with your car, you may be wondering whether it’s going to be considered a total loss by your insurance company. That can depend on any number of factors. 

Generally, a car is considered a total loss when the car’s value is exceeded by the repair costs. You may be surprised to hear that specific thresholds define what’s considered a totaled vehicle in some states. For example, a car may be totaled when, in Alabama, greater than 75% of the vehicle’s value is exceeded by repair costs. So, if your repair estimate is $4000 and your vehicle is worth $5000, in this case, it’s totaled.

In some instances, whether or not the vehicle will be considered totaled is a determination made by the insurer.

when-is-a-vehicle-considered-a-total-loss-after-a-crash

Insurance Coverage and a Totaled Vehicle

To help pay for totaled vehicle replacement, having collision coverage and comprehensive coverage is extremely useful. If you’re financing or leasing a vehicle, these coverages are likely required. They’re probably optional if your car is paid off. If you don’t have either of these coverages, however, and your vehicle is totaled, to buy a replacement vehicle, you will probably have to pay out-of-pocket. 

My Car Is Totaled – Now What?

Before having to worry about what happens next, an insurance claim must be initiated with your agent. Following that, however, based on repair costs and your vehicle’s value, whether or not it is a total loss will be determined by your insurer. 

Finally, for your totaled vehicle’s actual cash value, payment will be issued by your insurer. It’s entirely possible, however, this will be minus your collision coverage or comprehensive deductible.

The Value of Your Car

To figure your car’s actual value, a number of factors are typically used by insurers. These include the following:

  • In your area, what similar vehicles have sold for
  • Resale value
  • Mileage
  • Condition
  • Age

All of these will be taken into consideration as they apply to your vehicle at the time of the crash.

Totaled Car and a Loan

What if your car is totaled but you’re still paying it off? In a case like this, more times than not, to both your lender and to you, the check from the insurance company will be made payable. This means that the release of the money will have to be agreed to through an agreement with the establishment that loaned you the money for the car. More times than not, you only get paid with any money remaining after the lender has been paid.

If the entire check doesn’t cover what you still owe the lender, that’s going to have to come out of your pocket. They want their money.

Make Sure Your Car Is Insured Against a Total Loss Situation – K&N Insurance Brokerage

To get the best insurance possible, at the best rates, work with K&N Insurance Brokerage

Would you like a quote? Feel free to use our convenient online form to get started.

You can also visit K&N Insurance Brokerage at our various locations in St. Fresh Meadows, New York; the Bronx, New York; Westbury, New York; or Jamaica, New York. Our email is [email protected].

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