How do insurance companies determine if my car is totaled?

Accidents happen. Whether it’s a fender bender or a Car-B-Q, the most important thing is that no one is hurt. But once the dust has settled, you’ll need to figure out how your car is holding up— whether it is worthy of repairs, or what insurers call a “total loss”.

If your car is totalled, it means the cost to fix your car is more than the actual value of it. If that happens the insurer will write you a check for the car (and it’s up to you whether to spend it on the repairs, or put towards a new one).

But how exactly do insurance companies figure out if your car has been totaled? Let’s take a look at the methodology

the car valuation claim process

After you inform them of the crash, your insurers will send an adjuster to assess the damage and determine the pre-crash cash value.

This takes into account depreciation, mileage and wear and tear—so don’t expect it to be valued as new. Usually the value is determined as a fair cash offer for the car when it is still rolling, and this should be confirmed by a third party.

But insurers will be looking to give you the lowest value they can justify. If the accident was partly your fault, this could reduce the cash value calculation even more. Generally you should expect the cash value to be less than the replacement value—if this is a worry then you can take out “gap insurance” to cover any difference in offer in the event of an accident.

deciding if it is totalled

Once the adjuster has calculated the cash value of the car, that will be weighed up against the estimated cost of repairs. Even if the cost of repairs is cheaper, the car could still be considered a total loss—it may even still be drivable.

That’s because insurers have a threshold for how much they are willing to spend on repairs, which is usually calculated at around 75% of value. In some states there is a fixed cutoff for repairs in which case a car legally has to be sent to the salvage yard.

As you’d expect, because of depreciation, older cars are more likely to be declared as totaled than newer ones.

If you’ve found yourself stuck behind the wheel of a total loss, then you may be thinking about selling your car to scrap yourself. Going on a tour of the local junkyards, however, can be a real headache. It’s time consuming, plus you might have to drive (or tow) your broken-down car to them. After all that you might be disappointed with the price you get for it.

There is an easier way…Peddle works with tons of junkyards, auction houses, and private parties to get you the simplest, easiest, and best price for your damaged car. Just tell us the deets and we’ll make you an offer. We’ll even come and pick it up for you. It’s a…total…win.