Personal Insurance Blog

What to do if your car is totaled

Having an accident resulting in a total loss can be a big disruption.  But for most people, a total is way better than major repairs which can take weeks.  In this blog we will give you some guidance on getting you into a new car or truck with as little disruption to the rest of your life as possible.

Replacement vehicle:

The first thing to consider is what you will drive until you replace your old car, and who will pay for it. The answer hinges on two things: first do you buy substitute transportation coverage? And, who was at fault?

If you buy substitute transportation coverage, that will be available for a replacement vehicle until the total loss is paid, plus a few days. It’s important to note that they don’t pay forever while you negotiate a new car; starting that process right away will work to your advantage. 

If you do not buy substitute transportation, and we don't*, then the next question is, who is at fault? 

If you were not at fault in the accident, the insurance company for the at-fault driver will pay for a replacement until the total loss is paid, plus a few days. Contact the other driver’s company directly (and we at Gordon Insurance will help you get started, but can’t represent you legally). The other company’s inside adjustors will help you coordinate a rental company such as Enterprise or Alamo, and often pay them directly. 

If you were at fault in the accident, or if fault is disputed, and you do not buy substitute transportation, you’ll have to decide whether you wish to pay for a rental or work things out with other resources.   

(*Our family doesn’t buy this coverage since there are still kids and an extra vehicle at home. In the case of this accident, the other party was responsible, so we got paid by their company. )

Start looking for a replacement car right away

As soon as you think your car might be declared a total loss, start the car buying process.   I was surprised at how long it took to buy our new car.  Our totaled vehicle was a 2009 Toyota Tacoma. There are plenty of Tacoma's on local dealers’ lots, but we prefer a manual transmission: this single selection made the process finding a new vehicle take several days longer than we expected. Because the rental vehicle mentioned above is only paid for until the total is paid (plus a few days), make every effort to decide on the new vehicle before the rental runs out.

Settlement process on your old car

Different insurance companies have different processes for determining the value of your old totaled vehicle, but each are remarkably close with today's information based marketplace.   Most companies use a combination of on-line quotes and contacting dealers for actual cars on the lot to ensure quick agreement and completing the claim. The amount they offer also includes the sales tax of 6.25%, something not expected, but which does represent the real cost of getting a new car.

Because we were not at fault, we asked both our company, Plymouth Rock, and the company of the at fault driver to provide us with a total loss estimate. Plymouth Rock offered more than the other company, so naturally we took the higher value and settled with them. 

Releasing your beat up car:

After your total car has been towed from the accident scene, it sits on a garage lot until it can be towed to the salvage yard. The garage lot collects storage fees every day your broken car sits on the lot. Naturally the insurance company is eager to get the vehicle moved to the salvage yard as soon as possible to minimize storage costs. They do need the car or truck’s title to complete the transaction, so coordinate getting the title from your bank, or if you own the car free and clear, locate the title. 

Tip: as soon as you know your vehicle has been totaled, make your way to the garage lot and get your personal stuff out of and your plates off that vehicle. You’ll need the plates and registration for your new car. 

Total losses and salvage value:

Salvage vehicles have increased in prices over the past few years for two solid economic reasons. The first is that new car parts cost more, making use replacement parts rise in value as well. The second arises from the fact that today's better made vehicles stay on the road longer. Repairs to these older vehicles are made with used parts…which come from salvage yards. The salvage value for a 2009 Tacoma in 2014 was remarkably high: aside from the broken axle, our 2009 Toyota Tacoma had excellent bodywork all the way around, seats, electronics, and a great engine; we expect that truck to become parts to many of its brethren.  Because the insurance company uses this residual salvage value to lower their overall cost on a total, the amount of damage triggering a total loss has become an easier bar to reach.

In our case, the high residual book value of our wrecked Tacoma allowed us to get into a new Tacoma for relatively short money.  Because we begin replacement vehicle purchase process early, we had our new Tacoma just before the rental ran out.   The disruption to life with a total loss cannot be totally avoided, but aside from retrieving the title, retrieving our stuff, and the somewhat tedious process of buying a new car, we’re in a new truck for short money, and nobody got hurt.