How Much Will Insurance Pay For My Totaled Car?

Shawn Plummer

CEO, The Annuity Expert

A car accident can be a traumatic experience, mainly when it results in a totaled car. In addition to the emotional toll, there’s also the financial impact to consider. If you have insurance, you may wonder, “How much will insurance pay for my totaled car?” Unfortunately, the answer is not always straightforward, depending on various factors. This guide will discuss everything you need about how much insurance will pay for your totaled car.

Understanding Total Loss

Before anything else, comprehending what a “total loss” is is paramount. For example, a car will be regarded as a total loss when the cost of fixing it surpasses its worth. In other words, if restoring the vehicle costs more than the price of the car itself, then it’s considered a complete write-off. At this point, your insurance provider will establish its actual cash value (ACV).

Determining Actual Cash Value

The actual cash value of your car is the amount it would have sold before the accident. To determine the ACV, the insurance company will look at various factors, including the make and model of the car, its age, its condition, and its mileage. The insurance company may also consider the cost of similar cars in your area. Once the ACV is determined, the insurance company will use that amount to calculate your payout.

How Much Will Insurance Pay For My Totaled Car

Understanding Insurance Coverage

The amount you receive for your totaled car will depend on your insurance coverage. If you have liability coverage only, your insurance company will not pay for your car, as liability insurance only covers damage you cause to other people and their property. If you have collision coverage, your insurance company will pay for your car up to the ACV minus your deductible. If you have comprehensive coverage, your insurance company will pay for your car up to the ACV minus your deductible.


BeforeBefore your insurance coverage begins, you must pay out of pocket for the deductible. For example, let’s say that your deductible is $500 and your car’s Actual Cash Value (ACV) is $20,000; in this case, the insurance company will reimburse you with a payment of $19,500 for your totaled car. Don’t forget – if it was not at all due to negligence on your part, then there might be an opportunity available where you can get back what has been paid from their insurer.

Negotiating with Your Insurance Company

If you find that the ACV set by your insurance provider lacks accuracy, it is possible to negotiate. Nevertheless, supporting evidence for your argument is critical for a successful outcome. To this end, one way of doing so may be looking into the worth of your car or providing proof of any recent repairs or enhancements made. It’s essential to remember that negotiations are not obligatory and must thus always remain polite and professional when communicating with them.

Salvage Title

If you keep your totaled car, the insurance company will issue a salvage title. A salvage title means that the insurance company has deemed the car a total loss and may be unsafe to drive. In some cases, it may be possible to repair the car and get it back on the road, but you will need to have it inspected by a mechanic and apply for a rebuilt title.

Next Steps

Dealing with a totaled car can be a stressful experience, but understanding how much insurance will pay for your car can help you navigate the process more efficiently. Remember that the amount you receive will depend on your insurance coverage, car ACV, and deductible. If you’re unhappy with the ACV determined by your insurance company, you can try to negotiate, but be prepared with evidence to back up your claim. Finally, the insurance company will issue a salvage title if you keep your totaled car. With all this in mind, you should be able to make an informed decision about what to do with your totaled car.

How Much Will Insurance Pay For My Totaled Car?

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Frequently Asked Questions

Is it possible to negotiate the value of a total loss?

Negotiating the value of a totaled car with your insurance company is possible. However, you must research your car’s actual cash value (ACV) and understand your state’s total loss threshold. Once you have that information, you can negotiate a total loss claim with your insurance provider like you would for any other claim.

How is total loss calculated?

The Total Loss Formula (TLF) is calculated by subtracting the salvage value from the fair market value of a vehicle. If the total cost of repairs meets or exceeds the TLF, the insurance company may consider the vehicle a total loss.

Shawn Plummer

CEO, The Annuity Expert

I’m a licensed financial professional focusing on annuities and insurance for more than a decade. My former role was training financial advisors, including for a Fortune Global 500 insurance company. I’ve been featured in Time Magazine, Yahoo! Finance, MSN, SmartAsset, Entrepreneur, Bloomberg, The Simple Dollar, U.S. News and World Report, and Women’s Health Magazine.

The Annuity Expert is an online insurance agency servicing consumers across the United States. My goal is to help you take the guesswork out of retirement planning or find the best insurance coverage at the cheapest rates for you. 

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