How Does Insurance Value Totaled Cars?

Insurance companies value totaled cars based on their fair market value at the car’s current age and condition. Using data from multiple sources, insurance adjusters will determine the actual value of your car.

Insurance Company Declares Your Car a Total Loss

You’ve been involved in an accident and contacted your insurance provider to file a claim. The insurance adjuster tells you that your car is a “total loss”. What does total loss mean and, more importantly, how does the insurance company determine the value of totaled cars?

A total loss means that…

  • The damage to the car was so serious that safe repairs would not be possible.
  • Repairing the car would be more expensive than the actual value of the car.
  • Due to excessive damages, state regulations legally declare your car a total loss.

What’s the Outcome of a Total Loss?

In the event of a total loss, depending on the type of insurance you have, the company will pay you the actual cash value of the car minus your deductible. If, however, you only have liability coverage, you will be required to pay for the repairs yourself.

Information Used to Determine the Value of a Totaled Car

How does an insurance company assess totaled cars? By using information about your vehicle and researching the current auto market. Here is the information they’ll collect:

  • Your car’s history report – this is a list that shows your car’s history. It details how many owners the vehicle has had and whether it has been previously labeled a total loss. It’ll also list any accident reports or salvage records.
  • The condition of your car – this one is self-explanatory. They will simply assess the condition of the vehicle.
  • Kelley Blue Book market values and sales data – insurers use this to determine the actual value of your car compared to similar cars for sale in your area.

Insurance companies then calculate this information to determine your car’s actual value or the value of a totaled car.

What If I Don’t Like How They Value Totaled Cars?

If you’re not satisfied with how they valued your totaled car, in some cases, you can keep the car and try and make the repairs or sell it on your own for more money. There are some states, however, that will not allow you to keep a car after being tagged a total loss. Other states may require you to obtain a salvage certificate.

Should you opt to keep the totaled car, your insurance adjuster will discuss your options with you. This generally means that the insurance company will pay you a lower amount than the actual car value. They will give you a payout subtracting the deductible and the amount they would have received if they had sold your totaled car to a salvage company.

What Now?

Should you decide that you don’t like how your insurance company values totaled cars, you can pay the deductible, get what you can from the accident, and keep your car. By keeping the car, you can take the money from your insurance company and make the necessary repairs. Or you can keep the insurance payout and sell your totaled car to a junk car buyer near you. This way you get closer to the actual car value and you can use the cash to purchase another car.

Is your car or truck a “total loss” but you believe you can still profit from it? Give Sell My Car Online a call at (855) 929-0828. Find out how we can help turn your loss into a big win.