WHAT TO DO IF YOUR CAR IS TOTALED AFTER AN ACCIDENT?
If a vehicle is seriously damaged in an accident, it may not be worth fixing. The insurance company may call it a total loss or “totaled.” When this happens, it’s important that the insurance company pays you fairly. Knowing what to do when your car is totaled can ensure you get the compensation you deserve.
Our Colorado car accident attorneys share how to know if your car is a total loss and what steps you should take next.
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Table of contents
- WHEN IS A CAR CONSIDERED TOTALED?
- WHAT HAPPENS IF I TOTAL MY CAR?
- HOW MUCH WILL INSURANCE PAY FOR MY TOTALED CAR?
- DO YOU PAY A DEDUCTIBLE IF A CAR IS TOTALED?
- HOW TO GET THE MOST MONEY FROM INSURANCE FOR TOTALED CARS?
- IF MY CAR IS DECLARED A TOTAL LOSS, CAN I STILL KEEP IT?
- WHAT HAPPENS TO TOTALED CARS?
When Is a Car Considered Totaled?
A total loss vehicle is damaged so badly that it would cost more to fix than it would be worth. The estimate of repair exceeds the value of the car. When a car is a total loss after an accident, there is no repair process. With an auto total loss accident, the owner receives compensation based on the car’s value and the insurance policy.
For example, before an accident, a car is worth $10,000. Then, it’s involved in a collision with another vehicle, and it would cost $15,000 to repair. The car is totaled because it would cost more to fix it than it would be worth.
What Happens If I Total My Car?
If you total your car in an accident, it doesn’t get fixed. You file a claim with the insurance company and get paid the value of the vehicle minus any deductible with an insurance total loss payout. You will need to arrange for new transportation.
How Much Will Insurance Pay for My Totaled Car?
Insurance should pay you the current market value of the vehicle. There may also be a deductible that is taken out of the payment. See the Kelley Blue Book value of your car for an idea of what the current market value is for your vehicle.
The current market value of the car is different than what you paid for the car. It’s also not necessarily what’s left on your vehicle loan or lease. Unfortunately, you may be left with less than what you were expecting. You can evaluate the insurance company’s determination of the current market value of the vehicle.
Do You Pay a Deductible if a Car Is Totaled?
You may pay a deductible if the payment comes from your own insurance policy. If the other driver is at fault for the accident, their insurance pays for the value of the totaled vehicle. In that case, there should be no deductible.
When the payment comes from your own collision coverage and comprehensive auto insurance, there is probably going to be a deductible. Typical amounts are $500 or $1,000. The amount is deducted from the value of the car, and then you receive payment from the insurance company for the remaining value of the vehicle.
How To Get the Most Money From Insurance for Totaled Cars?
Remember that you can respond to the offer from the insurance company for your totaled vehicle. To get the most money from comprehensive coverage insurance for a totaled car, your counter-offer should consider the following:
- The specific features of the vehicle
- Retail value (not trade-in value)
- Improvements and upgrades made to the vehicle recently, like new tires (However, some policies don’t cover aftermarket modifications)
- Comparable vehicles in the area, with similar mileage and features
With research and documentation, you can make a counteroffer to get more money for your totaled car. You can also speak with an experienced Colorado car accident lawyer to help you get the compensation you deserve.
If My Car Is Declared a Total Loss, Can I Still Keep It?
If your car is declared a total loss, you must make it roadworthy again before you drive it. Colorado law creates rules for title of salvage vehicles1. Under these rules, all the major parts and systems of the vehicle must be in working condition, including:
What Happens to Totaled Cars?
Most totaled cars, even if its a leased or rental car, are scrapped. Usable parts are taken, and the rest of the car is crushed. Some vehicles are repaired and can be driven again after an inspection by a state-certified mechanic. However, coverage for a rebuilt salvage vehicle is more limited than for other vehicles.
Who Keeps the Money From Scrapping a Totaled Vehicle?
Usually, the insurance company keeps the money they make scrapping your vehicle. They pay you for its value, minus any deductible, but they keep what they get from parts and scrapping the totaled vehicle.
Can a Total Loss Vehicle Be Insured?
A total loss vehicle cannot be driven legally, so you cannot purchase car insurance for it. The vehicle must be repaired and inspected to be declared safe to drive. Once it has been declared rebuilt from salvaged title, you can look for car insurance.
Many insurance companies sell only property damage liability coverage for salvaged vehicles, which can put you at financial risk if you’re involved in another crash.
What Happens if You Total a Leased Car?
Like other situations where a car is totaled, you get the current market value of the leased vehicle as payment, minus any deductible that applies. However, the terms of the lease continue. Usually, the value of the car is less than what you owe on the lease, but you may have to cover the difference.
Check if your lease agreement has guaranteed auto protection (GAP) insurance2. GAP coverage may pay the difference. If you have it, you may not have to pay out of pocket if the value of the vehicle is less than what’s remaining on the lease. GAP insurance is optional when leasing a vehicle, but it’s a way to protect a driver from a significant, unexpected loss.
What Is the Threshold in Colorado for Determining When a Vehicle Is Totaled?
Colorado uses 100% as the total loss threshold. The car is considered a salvage vehicle when the cost of returning it to a roadworthy condition is more than the cash value of your car. An insurance company may use a lower value to determine whether to total the car. Many insurance companies use a 70-75% threshold.
Lawyers for Totaled Vehicle Accidents
If your vehicle is totaled, you’ve been in a serious accident. Our Colorado car accident lawyerEnglewoods can help you understand your rights and whether you deserve compensation for physical injuries, pain and suffering. In addition, if another party is at fault for the accident, their insurance should pay you for your totaled vehicle.
For those involved in an accident where you were hit from behind, contact our Colorado rear-end accident attorney team to specialized representation. Our lawyers work to help victims receive fair payment for their insurance claims. We are conveniently located at 5 Colorado locations near you in Denver, Fort Collins, Colorado Springs, Aurora, and Englewood. Our attorneys are ready to serve you and fight for the compensation you deserve.
1Colorado Department of Revenue. Division of Motor Vehicles (DMV). Salvage Vehicles. Retrieved 25 March 2022.
2Insurance Information Institute (III). What is gap insurance? Retrieved 25 March 2022.
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Written and Legally Reviewed By: Kyle Bachus
4.6 ★★★★★ 1,461 Google Reviews
Kyle is a member of the Colorado and Florida Bar associations and has served on the Board of Directors of the Colorado Trial Lawyers Association for more than twenty years in total. Over the years, Kyle has achieved justice for many clients. He has served on numerous committees and repeatedly won recognition from his peers at both the state and national level. He is proud of the role he has played in the passage of state and national legislation to protect consumers and is a frequent speaker and guest lecturer.