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When Is a Car Considered Totaled?

Updated: June 2017

A car is considered totaled when the cost to fix the car exceeds the value of the car. Some states have laws that define a totaled vehicle by specific thresholds. In Alabama, for instance, a car may be totaled when the damage is greater than 75 percent of its value. In that case, if a vehicle is worth $5,000 and the repair estimate is $4,000, the vehicle would likely be considered totaled.

In other cases, the insurer determines whether a vehicle is considered a total loss.

Comprehensive coverage and collision coverage help pay to replace a totaled vehicle. These two separate coverages are typically required on your car insurance policy if you're leasing or financing your vehicle. If your car is paid off, they're optional. But, if your vehicle is totaled and you don't have comprehensive or collision coverage, you may have to pay out of pocket to buy a replacement vehicle.

Totaled vehicle after an accident.

What Happens If My Car Is Totaled In An Accident?

If you're involved in a car accident, there are a few basic steps to follow before and after your vehicle is considered totaled:

  • Contact your agent and initiate an insurance claim.
  • Get the damaged vehicle inspected at an auto body shop.
  • The shop will provide a repair estimate, including both parts and labor.
  • Your insurer will determine whether the vehicle is a total loss, based on repair costs.
  • Your insurer will cut you a check for the actual cash value of the totaled vehicle, minus your deductible on your comprehensive or collision coverage.

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How Is My Car's Value Decided?

To determine your car's worth (the "actual cash value" in insurance terms) at the time of the accident, insurers typically use a number of factors to figure your car's actual cash value, including its age, condition, mileage and resale value, in addition to the selling price of similar vehicles in your area.

Do I Still Have to Pay a Loan on a Totaled Car?

If you're financing a car that's been totaled, your insurance company will likely make the claim check payable to both you and your lender, which means you'll have to come to an agreement with your lender on how to release that money, the Insurance Information Institute (III) says. Typically, the lender will be reimbursed first, with any remaining money then being paid to you.

It's possible that you may still owe your lender more for the car than the insurance payment you receive. In that case, you are responsible for paying the remaining balance on the car lease or loan.

Adding loan or lease gap coverage to your car insurance policy is one way to help protect against paying a lender out of pocket for a totaled vehicle. Depending on your insurer, this optional coverage may be available as part of a package or as a standalone coverage. It may also be available only for brand-new cars.

Have more questions about car insurance coverages or a totaled vehicle? Talk to a local agent.


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This content is for informational purposes only and may not be applicable to all situations.

Coverage subject to terms, conditions, and availability. Policy issuance is subject to qualifications. Allstate Insurance Company, Allstate Indemnity Company, Allstate Fire and Casualty Insurance Company, Allstate Property and Casualty Insurance Company, Northbrook, IL. © 2017 Allstate Insurance Company, Northbrook, IL.
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