What happens when your car is totaled?

If the accident is your fault and your car costs more to repair than what it's worth or can't be repaired, your insurance company pays you the value of the vehicle (minus any deductible) if you have the right coverages. If you were deemed not at fault, you can choose to file a claim with the other driver's insurance company.

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Man holding head while staring at totaled car

How do you determine if your car is totaled?

In car insurance terms, the formal definition of a totaled car is one that costs more to repair than it's worth. An insurance company will typically complete an inspection of the damaged vehicle before officially declaring it a total loss.

When assessing your vehicle, most insurers factor in the condition and structure of your car in addition to any state laws. In some states, a vehicle is automatically deemed to be a total loss if the cost to repair it exceeds a certain percentage of the vehicle's worth.

How is your totaled vehicle covered on your policy?

If another driver is at fault in the accident, their insurance pays you the value of your totaled vehicle with the at-fault driver's property damage liability coverage. If your vehicle is damaged in any way or you were hit by a driver without insurance, the coverages below on your insurance policy can protect against a totaled vehicle:

  1. Comprehensive

    Protects your vehicle against things out of your control. If your car is totaled after a fire, weather-related event, or collision with an animal, comprehensive car insurance coverage will pay you the value of your vehicle, minus any deductible. Comprehensive can also pay you the vehicle's value, minus your car insurance deductible, if your car is stolen and then recovered but too badly damaged to repair.

  2. Collision

    If your car is totaled after colliding with a vehicle, tree, guardrail, or any other object, auto collision coverage pays for the value of the damaged vehicle, regardless of fault and minus any deductible.

  3. Uninsured motorist property damage (UMPD)

    Uninsured motorist insurance applies when a driver with no insurance or not enough coverage is at-fault in an accident that totaled your vehicle. UMPD/UIMPD may be beneficial if you don't have collision coverage and can cover your vehicle up to a specified dollar amount on your policy, instead of the vehicle's value. The availability of UMPD/UIMPD varies by state and a deductible may apply.

    Please note that in certain situations, UMPD/UIMPD may not offer enough coverage to pay the value of your vehicle. For example, if the UMPD limit on your policy is $25,000 and your car is valued at $35,000, you'll be $10,000 short. To avoid this situation, it's a good idea to carry collision coverage if your vehicle's value exceeds the limit of your UMPD/UIMPD coverage.

What happens next if you total a financed car?

Assuming you're covered, your insurer will send a payment to your lender for the actual cash value of the car, minus any deductible. Make sure you give your lender's contact information and the account number to your agent or insurance company.

What happens when your car is totaled, and you still owe money?

If your car is totaled and you still owe on it, but the accident was not your fault, contact the at-fault driver's insurance company with your lender information.

To maintain your good credit, you should continue to make your loan or lease payments until the insurance company issues payment to your lender. If you don't have insurance or don't have enough coverage, you're on the hook for the balance left on your vehicle even though the car is no longer drivable.

What happens if the insurance payment isn't enough to pay off your loan?

Gap insurance can cover the difference between what you owe on the vehicle and the vehicle's actual worth, so you aren't responsible for the total outstanding balance on your loan or lease.

For example: Your insurer determines the actual cash value of your totaled car was $35,000. However, you owe $37,500 on your car loan. Your gap coverage takes care of the extra $2,500 (minus your deductible). Without gap insurance, you're responsible for the $2,500 balance left on your loan.

Keep in mind, new car owners may be most susceptible to the situation above. Newer vehicles typically depreciate as soon as you drive the vehicle home from the dealership.

Pro tip:

In most states, Progressive offers loan/lease payoff coverage, which is similar to gap coverage but with a few key differences. One of the main differences is that the payout for loan/lease payoff coverage is limited to no more than 25% of your vehicle's value, though the exact limit varies by state. Loan/lease payoff also doesn't cover any additional charges related to a loan or lease, such as finance and excess mileage charges.

How can I get a new car after a total loss?

Before financing a new car after a total loss, check if you owe a balance on your totaled vehicle. While your insurance company may have issued payment to your lender, the amount may not have been enough to cover the full balance, especially if you don't have gap insurance. In those instances, your lender might be able to consolidate what you owe into a new car loan.

Once you've purchased a new car, remember to contact your insurance company with the vehicle information so you're properly covered. Progressive offers a car shopping service by TrueCar to help with your new vehicle purchase. At Progressive, if you have rental car reimbursement coverage on your policy, you're covered for the cost of a rental vehicle for up to 30 days. If the at-fault driver's insurance company is handling your claim, ask the claims representative if you're eligible for a rental car.

How to file an insurance claim if your car is totaled

If you're involved in an auto accident, regardless of fault, and your car is damaged, immediately notify your agent or insurance company. At Progressive, we're available 24/7 to report a claim over the phone or online. Remember, it's up to the insurance adjuster to determine whether your car is totaled or if it can be repaired.

Filing a claim at Progressive

Call us at 1-800-776-4737 and a claims representative will walk you through the claim process. You can also file a claim by logging into your policy or using the Progressive app.

If you're not a Progressive customer, you can track an existing claim online.

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