About Totaled Car Insurance

With totaled car insurance, your car insurance company will pay the actual cash value for your totaled car. Compare totaled car insurance rates using our quote comparison tool to find the best deal.

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Zaneta Wood, Ed.S. has over 15 years of experience in research and technical writing bringing a keen understanding of data analysis and information synthesis to reach a wide variety of audiences. She studied adult education and instructional technology at Appalachian State University as well as technical and professional communication at East Carolina University. Zaneta has prepared technical p...

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP®

UPDATED: Jan 20, 2021

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Here's what you need to know...

  • Having a totaled car is a serious issue which often involves bodily injury, loss of job wages, and high medical expenses
  • Having a totaled car can come about because of any number of reasons
  • Find out what insurance you need in case your car ever is totaled in an accident

Totaled car insurance is not something consumers should think about after an accident occurs.

Consumers have the responsibility to not only know the laws in their state but also to be prepared and covered in the event they need an insurance claim of this type.

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Is totaled car insurance blanket coverage?

When an accident occurs and a car is totaled in the process, the insurance company is obligated to make the consumer “whole” again, but what is the definition of whole to the totaled car insurance carrier?

First, the insurance company determines the actual cash value of the vehicle that is totaled. The actual cash value of the consumer’s vehicle is the replacement value of the vehicle minus the value of depreciation.

When all of the facts and figures are boiled down, the insurance company must leave the consumer at the same financial state they were at before the accident or collision occurred.

However, if the actual value of the vehicle is less than leases on the vehicle, the consumer will have to pay these expenses themselves.

In the case where a consumer owes more on the vehicle than the determined amount of actual cash value, then they are considered to be in an upside down state.

In a typical upside down state, a consumer needs to be prepared to pay for any liens or leases with GAP insurance.

When a consumer is covered by totaled car insurance, the provider usually cuts the consumer a check for the cash value of the vehicle.

Of course, if the consumer owes a deductible to the insurance company, this amount is usually deducted from the actual cash value amount of the car before the consumer receives the check.

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The Basics of Totaled Car Insurance


Since most car insurance types are necessary, including totaled car insurance, it’s best for the consumer to do some exhaustive research to assist them in comparing the finest providers.

What types of issues do clients need to be aware of to help them get the most out of comparing car insurance?

One thing consumers should know is that insurance companies don’t typically use the standard National Association of Automobile Dealers or the Kelly Blue Book to determine the actual worth of their car.

Here are some important questions that consumers should ask car insurance providers before they finalize their decision.

  1. Is the mileage on the vehicle taken into consideration when determining the actual cash value of the car?
  2. How does the pre-accident condition of the car affect the actual cash value of the vehicle if it is totaled?
  3. How are premiums paid on special car parts or upgrades that affect the determination of actual cash value of the vehicle after it is totaled?
  4. What effect will records of routine maintenance and oil changes have on the determination of a totaled car’s actual cash value?

These detailed questions and how well the prospective totaled car insurance provider answers them as well as help consumers narrow down the best choice.

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Totaled Car Insurance in Action

Having the best car insurance for totaled incidents is great, but knowing what to discuss and bring to the insurance company is a powerful asset that consumers need.

When consumers are faced with a totaled car, they should be prepared in the following ways to handle the insurance company they have chosen:

  • Present excellent records of vehicle maintenance and repair to the insurance company at the time of the totaled accident. Include any payment information for premiums and upgrades.
  • Go to three dealers and obtain specific price quotes for the same model, year, and mileage of the vehicle. Get these values in writing and present them to the totaled car insurance company.
  • Ask the totaled car insurance company for a local list of dealers where the consumers can purchase a similar car of the same value.
  • If the consumer lives in one of 28 states that require payment from the totaled car insurance provider, then the consumer must ask the auto insurer if they will pay for any required sales tax on a replacement vehicle.

Totaled Car Insurance and Uninsured Motorists

Another concern which consumers must be aware of is uninsured motorist claims.

Consumers must know beforehand how their insurance claim will be affected if they are hit by an uninsured motorist.

Some consumers try to address this issue by using stacking or making a claim from more than one insurance carrier which they have purchased.

Consumers should read their any totaled car insurance policy carefully to understand how their carrier handles uninsured motorist claims.

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