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Totaled Car? Follow These 7 Steps!

Your Car’s Been Declared a Total Loss?

So, your car has been declared a total loss?

That’s a tough spot, but don’t worry.

In this guide, we’ll walk you through every step you need to take to navigate this tricky situation.

From understanding the insurance jargon to negotiating the best payout, we’ve got you covered.

Ready to dive in?

 

Two cars collide in a busy city intersection, highlighting the immediate aftermath of a car accident and the potential for a vehicle being declared a total loss.
Two cars collide in a busy city intersection, highlighting the immediate aftermath of a car accident and the potential for a vehicle being declared a total loss.

 

7 Steps to Take After a Total Loss

Here’s the quick step-by-step guide, starting in the “file claim”, and get through all this intricate path until the sale.

 

STEP 1: File a Claim

To start the process, you must contact your insurance company right away.

 

STEP 2: Get an Independent Appraisal

Be sure to get a trustworthy second opinion on your car’s value. This is a core hint to claim the fair amount that you deserve.

 

STEP 3: Review Offer

Carefully check the insurance company’s settlement offer. Compare it to the appraiser’s estimate.

 

STEP 4: Negotiate

Use your evidence to negotiate a fair payout. Now it is time to claim your car’s diminished value.

 

STEP 5: Check Loans

Know what you owe if you have a loan on your car.

 

STEP 6: Take Your Items

Take everything out of your car before it’s towed away. Remember to check under the seat.

 

STEP 7: Transfer

Give the car’s title to the insurance company once you agree on a settlement.

 


 

The Long Path to Take If Your Car Is Declared a Total Loss

This path uncovers all the traps and loopholes that the previous one may have left hidden.
In it, we help you understand EVERYTHING you need to know if you got in this troubled situation.

 

STEP 1: Understand What “Total Loss” Means

First things first, let’s get clear on what “total loss” means.

When a car is declared a total loss, it means the cost to repair the vehicle exceeds a certain percentage of its actual cash value (ACV).

This percentage varies by insurer and state, but is typically around 70-75%.

Essentially, repairing the vehicle is not economically feasible, so the insurer pays the ACV minus any deductible instead.

 

STEP 2: File a Claim Immediately

Imagine that you just got out of the accident.

Now it is time to contact your insurance company, and start the claim process.

Time is of the essence here.

You’ll need to provide some details about the incident and any supporting documents, like a police report if there is one.

 

STEP 3: Rent a Vehicle

While the claim is being processed, you can rent a vehicle.

Most insurance policies have rental coverage, and if this is not the case, keeping the receipts during the processing time can lead to a future reimbursement.

 

STEP 4: Get an Independent Appraisal

While the insurance company’s adjuster will assess your car, it’s a good idea to get an independent appraisal.

This gives you a trustworthy second opinion and can be crucial if you need to negotiate the payout.

 

STEP 5: Review the Settlement Offer

Once your insurance company makes an offer, review it carefully. Compare it with your independent appraisal.

If the offer seems too low, (and usually is) don’t hesitate to challenge it.

The insurer probably will use the outdated 17c formula, which will undervalue your vehicle.

Provide evidence, such as your independent appraisal and market value data for similar vehicles.

 

STEP 6: Negotiate if Necessary

Negotiation might feel daunting, but it’s often necessary to get a fair settlement.

Be polite but firm, and use all the evidence you’ve gathered.

You can even mention industry experts like Tony Rached, Loretta Worters, or Michael Barry, who advocate for fair insurance practices.

 

STEP 7: Understand Your Loan Payoff Amount

If you have a loan on your car, you’ll need to know the payoff amount.

Sometimes, the insurance payout may not cover the full amount you owe.

In such cases, gap insurance can be a lifesaver, covering the difference between what you owe and what the insurance company pays.

 

STEP 8: Remove Belongings

Before the car is towed away, make sure you remove all personal items.

It might seem obvious, but in the stress of the moment, it’s easy to forget.

Remember to double-check under the seats, the glove compartment, and the trunk.

 

STEP 9: Transfer the Title

Once a settlement is reached, you’ll need to transfer the car’s title to the insurance company.

This step is crucial as it officially releases you from the vehicle’s ownership.

 

STEP 10: Plan Your Next Steps

With the total loss behind you, it’s time to think about your next vehicle.

Use the settlement money wisely, and consider buying a car within your means to avoid future financial strain.

 

 

What’s on the Media!?

Experts like Salvador Gonzalez of The Claims Guide suggest always keeping detailed records of all communications with your insurance company.

This documentation can be invaluable if you need to escalate the claim.

 

What we Found on The Pages

  • In 2020, actor Tracy Morgan’s $2 million Bugatti was declared a total loss after a minor crash in New York City. – The New York Times
    The settlement process highlighted the challenges of getting fair compensation for high-value vehicles.

 

  • Hurricane Harvey in August 2017, where thousands of cars were declared total losses due to flooding. – USA Today
    The article emphasized the importance of quick action and proper documentation for insurance claims.

 

  • A scam where severely damaged cars were resold. – NBC News
    In 2018, a report revealed that vehicles declared total losses were being refurbished and sold without proper disclosure, underlining the necessity of a proper total loss process to protect consumers.

 

  • Reported on a multi-car accident in Los Angeles in 2021, where several vehicles were declared total losses. – Fox News
    The article detailed how different owners navigated their total loss claims and the varying outcomes.

 

  • An investigation of unfair practices in the insurance industry in 2022. – The Guardian
    It revealed how some drivers had to fight for their rightful compensation after their cars were declared total losses.

 

Wrapping It Up

Dealing with a total loss can be a rollercoaster, but knowing the right steps can make the ride smoother.

From filing your claim to negotiating a fair payout, each step is crucial.

By staying informed and proactive, you can navigate this challenging situation with confidence.

Bookmark this page to know what to do in an emergency!

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