If your car is involved in a crash and your insurer declares it a total loss, what comes next? We look at what defines a "total loss," what you'll need to do, and what to expect from your insurance company.
What does "total loss" mean?
An auto insurer will declare your vehicle a total loss if they determine the cost of repairing it exceeds the vehicle's current market value. In other words, a total loss is cheaper to replace with a similar car than to fix. Similar terms include "totaled," "non-repairable," or "written off." Bear in mind that the less a car is worth, the less damage it takes to be deemed a total loss.
What do I need to do?
Once your car is declared a total loss, your first steps will be to:
- Remove any personal items.
- Leave the keys (and charging cable, if it's an electric car) with the car.
- Consider deleting or removing any personal data stored in your car's navigation, phone, and infotainment systems.
- Remove your license plates. If they are personalized, hold on to them. If they are non-personalized, guidelines may require they be returned to your state's department of motor vehicles (DMV). Check whether your insurer can take care of this for you.
Your next steps will be to:
- Find somewhere to store the car. Your insurer may arrange for storage with a shop or storage lot. If so, make sure to release the car to your insurer.
- If you have rental car coverage, your insurer should help you activate it.
What happens next?
Your insurer will determine your car's Actual Cash Value (ACV) at the time of the total loss by looking at recent sales in your area of the same make, model year, mileage, condition, options, and so on. Most insurers will provide you with a detailed report when this is complete.
The insurance company will typically help you with any required paperwork and, once that's done, pay out your insurance claim to you and any other owners of the car, including any lienholders. Then they'll buy the vehicle from you, including taking possession of the original title, which brings your part in the process to an end.
Policies differ from one insurer to another, so check your policy to see exactly what it covers.
What AAA does
If you're insured by AAA, you can count on:
- Free storage of your vehicle
- Courtesy disposal of non-personalized license plates
- Help completing all required DMV documents
- A detailed report on your vehicle's Actual Cash Value