Totaled your car? Here’s how to get the car insurance check

When a car is totaled in a collision, your car insurance company pays out its actual cash value — what the car was worth before the accident — minus your deductible. It’s unlikely that your settlement will cover the full cost of a brand-new car, so you may have to pay the difference out of pocket. However, depending on your state, your insurer may be required to cover additional costs, such as sales tax, title fees, and vehicle registration.

The total loss process can feel overwhelming, but understanding each step can help. Being informed can make a big difference from filing a claim and negotiating your payout to knowing how full coverage applies and what to expect from your settlement. 

Once your claim is settled, you’ll also need to decide whether to replace the vehicle and adjust your insurance accordingly. Whether you’re keeping the payout, buying a new car, or dealing with a lender, knowing your options helps you take control of what happens next.

What is a total loss?

Insurance companies declare a car is totaled when it’s no longer cost-effective to repair. This can happen if the repair cost is greater than or close to the car’s actual cash value (ACV) or the car is damaged beyond reasonable repair, such as with severe structural or flood damage.

Actual cash value is the market value of your car just before the accident, factoring in depreciation, age, mileage, and overall condition.

Insurance companies don’t all follow the same rules when deciding if a car is totaled. Most use a total loss threshold (TLT) or a total loss formula (TLF).

• Total Loss Threshold (TLT): Some states require insurers to declare a car a total loss if repair costs exceed a certain percentage of its ACV, commonly 70% to 80%.
  
• Total Loss Formula (TLF): In other states, insurers add the repair costs to the car’s salvage value, or what it’s worth as-is. If that total is more than the ACV, the car is totaled.
  

The exact threshold or formula depends on your state and insurer’s internal guidelines. It’s always a good idea to ask your adjuster how the decision was made if you’re unsure.

How to file a total loss car insurance claim

If your car is declared a total loss, here’s what the claims process typically looks like:

• Report the accident to your insurance company as soon as possible.
• Work with a claims adjuster, who will inspect the damage and determine if the car is totaled.
• Provide documents like your title or loan info, maintenance records, and photos if needed.
• Review the payout offer, which will be based on your car’s actual cash value, minus your deductible.
• Transfer ownership of the vehicle to your insurer, usually by signing over the title.
• Receive your settlement via check or direct deposit—if you have a loan, the lender gets paid first.

How to negotiate a total loss car insurance settlement

If your car is declared a total loss and you think the insurance company’s offer is too low, you don’t have to accept it immediately. You have the right to negotiate, and it can be worth the effort. Here’s how to do it.

• Request the valuation report: Ask your insurer for a copy of the report showing how they calculated your car’s value.
• Research comparable vehicles: Look up local listings for similar cars (same year, make, model, mileage, and condition) to see if the insurer’s offer is comparable.
• Check for missing features: Make sure upgrades like a sunroof, new tires, or premium trim are factored in.
• Provide maintenance records: Recent repairs or consistent upkeep can support a higher valuation. Share receipts if you have them.
• Communicate professionally: Call or email your adjuster with your findings. Keep your request calm, clear, and factual.
• Ask about the next steps: If your insurer doesn’t revise the offer, ask about their appeals or dispute process.
• Escalate if needed: If negotiations stall, you can contact your state’s insurance department or hire an independent appraiser.

How full coverage protects you if your car is totaled

If your car is totaled, meaning it’s too damaged to repair, having full coverage car insurance can make all the difference in getting back on the road without a huge financial hit.

Full coverage combines liability with collision and comprehensive coverage. Together, they protect you in a wide range of situations where your car could be totaled, whether from a crash, theft, or something unexpected like a fallen tree.

“[Full coverage] car insurance is an assurance that you are equipped with the right amount of insurance coverage to buy a new car in case your vehicle gets completely wrecked,” says Nick Schrader, chief executive officer at Second Western Insurance Services.

Here’s how it works:

• Collision coverage helps if your car is totaled in a crash, whether you hit another vehicle or a stationary object like a pole or a guardrail.
• Comprehensive coverage applies when the damage isn’t from a crash, such as a falling tree, flood damage, or even a hit-and-run.
  

In both cases, your insurer will typically pay you the actual cash value of your car at the time of the accident, minus your deductible. This payout can help you replace your vehicle with something similar.

Keep in mind, liability insurance alone won’t help if your car is totaled. Liability only covers damage you cause to others, not your own vehicle. Even if another driver is at fault, there’s no guarantee they’ll have enough insurance to cover your loss. That’s why having full coverage is a smart way to protect yourself, no matter who’s to blame.

How much does insurance pay for a totaled car?

The amount your insurance will pay for your totaled car depends on several factors. During the total loss settlement process, your insurance company will likely consider these factors when determining what kind of payout you will receive:

• Type of car you have 
• Fair market value of the vehicle
• Salvage value
• Wear and tear
• Age of vehicle

Your insurer will also consider total loss value, which is calculated by adding repair and other costs to the overall value lost and rental reimbursement costs.

How you’re paid after your car is totaled

Once your insurance company finalizes your total loss claim, they’ll issue a payment based on your car’s actual cash value, minus your deductible. How the money is paid out depends on who owns the vehicle:

• If you own the car outright, the check is sent directly to you.
• If you’re financing or leasing the car, the insurer will pay the lender or leasing company first. If there’s any money left over after the loan is paid off, you’ll receive the remaining balance.
  

Your state may have rules about how and when insurers must issue payment, so the process and timing can vary slightly. To avoid delays, make sure your insurer has all the documents they need, like your car title, loan details, and any required forms.