A totaled car isn’t just a devastating experience. It can also be a complicated process. It’s perfectly normal—and expected—to have lots of questions about how the process works, how to deal with your auto insurance provider, and beyond.
First, it’s important to make sure you understand exactly what a totaled car is. To put it simply, it’s when it’s determined to be a “total loss,” or it would cost more to repair the car than the car is worth. Read this for more information on what a totaled car is.
Then check out these common questions (and answers!) on totaled cars. We hope you never have to undergo this experience—but it’s always best to be prepared.
1) How common is “total loss”?
A totaled car, or a car determined to be a “total loss,” is more common than you might think. According to CCC Information Services lead analyst Susanna Gotsch, 14.24% of all vehicle appraisals in 2013 were determined to be a total loss.
2) Who decides if my car is totaled?
Both your insurance provider and your state’s laws determine whether your car is totaled or not. Be sure to be aware of both your insurance coverage and how your state defines total loss.
3) What is the worth of my totaled car?
Your insurance provider bases this off of the market value of your car right before the accident. It’s determined by type of car, mileage, condition, standard features, extra features, and where you live.
If you want to figure out what your car’s market value was before the accident on your own, you have a couple of options. You can use websites like Kelly Blue Book to look up a typical market value of a car like yours or you can get another estimate from an appraiser.
4) What is gap insurance and how does it work? Do I need gap insurance?
Gap insurance is important to be aware of. If necessary, gap insurance can cover the difference between what your car is worth and the balance you owe on it. If you’re financing or leasing a car, gap insurance could be helpful for you—especially if you are less than halfway through an auto loan. If you own your car or if you owe less on the loan than the car is worth, gap insurance isn’t necessary.
If you have a totaled car and you are in the first half of financing or leasing a car, you could still owe money on a loan—for the same wrecked car. That’s where gap insurance can come in handy.