What Happens When Your Car is Totaled?

If you are ever involved in an auto accident in Ohio, and the damages are serious enough, chances are good your car might be totaled as a result. But what does the word “totaled” actually mean? And what does that mean for your car insurance and claim settlement?

Luckily, those questions will be answered here. But first- the car accident. We’ve outlined the typical sequence of events below. *Please note that not all accidents may have these steps occur in this exact order and some accidents may have them all occurring at once. 

First, the car accident

The totaled car is the end result. Here’s how we get there…

  • Accident happens.
  • Police are called to clear the scene and take a report, which includes interviewing the drivers, passengers and any witnesses.
  • Police cite the at-fault party.
  • Contact information and insurance information is exchanged between the drivers.
  • Each party contacts his or her insurance company/agent to either report the claim (at fault party) or just to put on notice.
  • The adjuster is assigned and will be in charge of collecting all information regarding the accident, including obtaining the police report, taking statements from drivers, passengers and  witnesses and making a final determination of fault.
  • Regardless of the carrier, all damaged vehicles will be asked to get an estimate for repair. This could be as simple as visiting a body shop for an estimate, the carrier sending a property damage appraiser to your vehicle to do an estimate, you taking the car to a claims center or even taking photos and sending to the carrier so they can prepare an estimate (crazy I know, but I’ve seen this).

The LAST step is where the concept of “totaled” or “total loss” comes into play.

Again, keep in mind I’m discussing Ohio here. What if you live in a no-fault state? You can get a feel for the basics of a no-fault state by reading our short article.

YES, I know there are about 500 ways these steps can go sideways (private property accident, nobody cited, etc.) BUT this is a nice overview of the typical process.

Next, the car is declared a total loss

ALL insurance companies have a formula they use to determine a total loss. It varies from company to company so I can’t offer up a concrete example. But I can offer this explanation- when an insurance company totals a vehicle, they are saying the cost to repair the vehicle exceeds (or is within a certain percentage) of the actual cash value of the vehicle. So it doesn’t make any sense to repair the vehicle.

Although the definition of “Actual Cash Value” is replacement cost minus depreciation, in this case the market value and actual cash value are pretty close to the same thing. Kelley Blue Book is a popular resource to determine a car’s value, but the carriers also have data sources at their disposal to search what a similar car in your area would sell for.

The insurance company will in essence “buy” the car from you by paying the actual cash value. You’ll sign over the title and they take possession of the car. Most of the time they sell it to a scrapyard for salvage, as a way to recoup some of their cost.

Can I Keep the Totaled Vehicle?

Usually, the answer is Yes. But keeping a totaled car brings with it several problems, including getting insurance. Read our article about getting insurance on a vehicle that’s been totaled for more details.

Let’s face it- car accidents are scary. And you need a solid insurance agent to help you during the process. Call us at (937) 592-4871 or fill out the form below to review your policies!

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Are you ready to save time, aggravation, and money? The team at Alan Galvez Insurance is here and ready to make the process as painless as possible. We look forward to meeting you!

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